AGC members see tough 2010

By Chris Sleight22 January 2010

A survey carried out by the Associated Contractors of America (AGC) among its members shows no expectation of a recovery this year.

AGC chief executive Stephen E. Sandherr said, "Unfortunately for the industry and four our economy this year's construction outlook is far from positive. As long as the construction industry remains mired in its own depression, broader economic and employment growth will continue to lag."

Based on the survey results, the most depressed parts of the US construction market in 2010 are expected to be private sector non-residential structures. Expectations were particularly low for buildings associated with manufacturing, warehousing, retail and lodging.

The best prospects were seen in the power sector, with 30% of respondents expecting the value of work to be up this year on 2009 levels. However, with 38% expecting spending to be lower and 32% seeing it comparable with last year, the outlook even for this sector is weak.

Despite the weak outlook more contractors said they would be adding workers than laying them off in 2010. This is in contrast to 2009, when 73% of respondents said they laid-off workers, although some of these companies also took on workers.

The weak outlook means only 46% of contractors in the US expect to buy new construction equipment in 2010, compared to the 61% who said they bought new machines last year. This drop is also reflected in the used equipment market, with 34% of contractors saying they will by used equipment in 2010, compared to 34% last year.

Stimulus help

The AGC's survey also shone some light on the impact of the US stimulus programme, announced last February. Of the 700 companies surveyed, 31% said they had been awarded at least one stimulus-funded contract. A greater proportion - 46% said the stimulus funds meant staff were retained that would otherwise have been laid off, while 15% of contractors said stimulus funds allowed them to hire new staff.

When asked when they thought the construction market would grow again, only 12% said 2010. The biggest proportion - 49% - it would be 2011, while 26% said 2012 and a further 13% said it would be even later.

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