"Overall, construction is likely to decline from its recent peaks as the economy absorbs the shock from these attacks. But the industry will lead the recovery in the hardest-hit regions by providing the recovery and rebuilding that is needed. In addition, high-paying construction jobs will pump money into local economies wherever government and private employers invest in making facilities more secure or in building backup capacity for critical functions," said AGC Chief Economist Ken Simonson.
In general, the construction industry will be affected by the current slowdown in the economy, although a drop in interest rates could spur some additional construction spending in the near future. There is also an immediate need to provide office space for workers displaced from lower Manhattan and the Pentagon, which will provide a small lift for regional markets in addition to the demolition and reconstruction work at the sites themselves.
AGC expects there will be additional construction spending to strengthen security at governmental and some private facilities, while the Defense Department is likely to spend more on construction of all types.
Airport construction is likely to decline, except for security-related activity. Airlines will reduce their operations, cutting the demand for gates and other passenger facilities, and hotel and other travel-related sectors will suffer sharply at first and may be reallocated geographically (e.g., away from Hawaii and western mainland resorts that are reached mainly by air).
The Associated General Contractors of America is the largest and oldest national construction trade association, founded in 1918. AGC represents more than 35,000 firms, including 8,000 of America's leading general contractors, and more than 12,000 specialty-contracting firms. More than 14,000 service providers and suppliers are also associated with AGC, through a nationwide network of chapters.
Visit the AGC Web site at www.agc.org.