‘Tepid’ recovery will occur in 2010

03 August 2009

President Obama signs the US stimulus plan in Denver, Colorado.

President Obama signs the US stimulus plan in Denver, Colorado.

Speaking at the 37th annual Scaffold Industry Association's conference in July, Cliff Brewis, McGraw Hill Construction's senior director of educational operations, echoed many industry experts and economists by stating that the construction industry is very close, if not at, the bottom of the recession. Brewis said construction activity has bottomed out and that the recovery, at best, will be tepid in 2010.

"Eighteen months ago we had the biggest boom in construction," Brewis said. "The subprime mess leaped into other areas and construction plummeted... the problem today is the availability of money and a void for demand."

While many have been negatively affected by the recession and subsequent stall in construction - nearly 3,000 projects have been delayed in 2009 - there are bright spots across the country, Brewis said. California, Texas, Ohio and Illinois are all currently using US economic stimulus money for projects. Both highway and bridge construction are up 15 percent for 2009, using a total of $60 billion for projects, $10 billion of which is from the stimulus. For 2010, Brewis said bridge and highway construction will be up an addition 10 percent, with $65 billion going toward projects, $15 billion of which will come from the economic stimulus package.

And while some say the US economic stimulus hasn't had quite the affect on the economy most expected - for example, so far in 2009 construction starts have been down -11 percent, using only 30 percent of the stimulus - Brewis predicts that by 2010, starts will be up by 10 percent, and a majority of the stimulus will have been given out.

Currently, public works projects have held up strongly, and, again, the stimulus package will have a bigger affect on said projects in 2010 than in 2009. About 30 percent of stimulus monies will go toward public works projects, Brewis stated.

"The construction marketplace will start to show slight positivity at the end of 2009 with a 10 percent total increase," he said. "Employment [will] pick up next year."

For more on the 2010 construction outlook, see American Lift & Handlers' full report in the September/October 2009 issue.
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