Latest figures show double-digit drops in spending compared to 2008.
There’s no sign of an economic recovery yet for the nation’s construction
industry, the Associated General Contractors of America recently noted. New Census
Bureau figures show the construction industry continues to suffer from
significant declines in privately-funded construction investments, with private
construction investments declining by 20.6 percent between September 2008 and
“These figures show just how dire business
conditions are for the nation’s contractors and their six million plus
employees,” reported Stephen E. Sandherr, the association’s
chief executive officer. “The only green shoots contractors are seeing are the
weeds sprouting around their idle construction equipment.”
The federal figures show the annualized rate of private
construction spending declined from $774 billion a year in September 2008 to
$614 billion a year in September 2009, Sandherr noted. On the nonresidential
side alone, construction spending for lodging declined by 37.4 percent, 33.3
percent for offices, and 36 percent for commercial structures over the past 12
months. Manufacturing and power construction were the only parts of the private
construction market to see increased investments, with 11 percent and 4.8
percent gains respectively, Sandherr added.
Publicly funded investments in construction did increase
over the past year by 6.1 percent, from $308 billion to $326 billion, Sandherr said.
Public spending on commercial facilities and power structures grew the most,
with 28.8 percent and 27.2 percent increases, respectively, over the past year.
However, water supply and sewage investments actually declined by 1.9 and 1.8
“Increased public investments in
construction and infrastructure are welcome news, but this industry will
continue to suffer while demand for private construction continues to plummet,”
Sandherr said. He called for a quick extension of the first-time home buyers
tax credit and expansion of the carry back of net operating loss provision from
two to five years for all businesses for 2008, 2009 and 2010 as a way to
stimulate new private demand for construction.
He also urged Congress and the Administration to support
the 30 measures outlined in the association’s construction industry recovery
plan, Build Now for the Future, which were designed to revive the private
construction market while improving public investments in the nation’s aging
No Recovery Yet For Construction Industry
November 2, 2009