US construction industry still waiting for upturn
04 November 2009
The Associated General Contractors of America (AGC) has said new Census Bureau figures show there's no sign of an economic recovery yet for the nation's construction industry.
In a statement the AGC said new federal figures show private construction investments declined by - 20.6 % between September 2008 and September 2009.
"These figures show just how dire business conditions are for the nation's contractors and their six million plus employees," Stephen E. Sandherr, the association's chief executive officer said.
"The only green shoots contractors are seeing are the weeds sprouting around their idle construction equipment," he added.
The federal figures reveal that the annual rate of private construction spending declined from US$ 774 billion in September 2008 to US$ 614 billion in September 2009, Mr Sandherr explained.
During the past 12 months, on the non-residential side, construction spending for lodging - hotels, motels, etc, - declined by - 37.4%, for offices spending fell by - 33.3% and investment in commercial structures was down - 36%.
Manufacturing and power construction were the only parts of the private construction market to see increased investments, with + 11% and + 4.8% gains respectively, Mr Sandherr said.
Publicly funded investments in construction did increase over the past year by + 6.1%, from US$ 308 billion to US$ 326 billion.
The AGC said public spending on commercial facilities and power structures during the last 12 months grew the most, with increases of + 28.8% and + 27.2% respectively. However, water supply and sewage investments declined by - 1.9% and - 1.8% percent.
"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," Mr Sandherr added.
As a way to stimulate private demand for construction Mr Sandherr said there needs to be a quick extension of the first-time home buyers' tax credit and an expansion of the carry back of net operating loss provision from two to five years for all businesses for 2008, '09 and '10.
In the AGC statement 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 infrastructure.
