The slump in US construction activity was one of the seeds from which the global recession grew. Activity started to turn down as long ago as 2006 as the residential market started to decline in the face of rising interest rates. This went on to precipitate the sub-prime mortgage crisis, which turned many banks' debts toxic and led to the string of collapses and bail-outs seen in 2008 and 2009. The rest is history.
For the US construction sector, it has been an incredibly long and painful recession. There were five consecutive years of falling construction output from 2006 to 2010, with a particularly vicious drop in 2009 as the global economy plunged. This all saw the value of the US construction market fall from a peak just above US$ 1.2 trillion in 2005 to less than US$ 800 billion in 2010. The industry lost a third of its value in five years.
But the good news is that there was an improvement last year. Data from the US Census Bureau shows that construction output increased +4.3% on a seasonally adjusted basis last year to US$ 817 billion. It was a recovery led by the private sector, with strong growth in areas like manufacturing, power and commercial construction delivering a +8.3% rise in activity. In contrast, publicly funded construction fell -2.5%.
Even the beleaguered residential construction market improved last year, with a +3.8% rise in activity. However, this was not only well below the peak of 2005, but also a long way short of what many consider to be the natural level of activity for the US. Permits for some 610000 new housing units were issued in the US last year - up only about 1% on 2010 - and historical data from the US Census Bureau shows that a normal year before the boom and bust of the last decade would see at least 1 million homes built.
So the US construction market is a long way from being in good health, but it is at least moving in the right direction. And the small improvements in the industry are leading to a more optimistic outlook.
For example, speaking at January's World of Concrete exhibition in Las Vegas, US, the Portland Cement Association's (PCA's) chief economist, Ed Sullivan, talked about a "Tinge of optimism" in the industry. The PCA says cement consumption in the US grew +1.1% last year and expects just another +0.5% rise this year to some 71.3 million tonnes. However, things may work out better than this. "When we put together a forecast we always try to be conservative," said Mr Sullivan.
In these tough economic times, finding the funding for construction remains a major issue at both the state and federal level. Perhaps the most talked-about aspect of this is at the moment the funding of highway construction.
The issue here is not so much about finding the money, as federal highway construction and maintenance is funded by a ring-fenced tax on road fuel called the Highway Trust Fund. The problem has been finding legislation that pleases both sides of the political divide.
Under the US system, spending in the public sector is governed by bills which expire after a given period. In the case of highway bills, the legislation lasts for up to six years. Unfortunately the last highway bill expired in 2009 and investment since then has been approved using a series of temporary extensions. The current temporary extension expires at the end of March.
There is broad agreement between Republicans and Democrats on the need to pass a multi-year bill. However, the poisonous nature of US politics, as typified by the disgraceful display of pettiness over the raising of the debt ceiling last summer, means it has proved impossible so far to find a bill that pleases both sides.
At the moment there are two different bills being debated and amended in Congress - one form the House of Representatives and one from the Senate - while President Obama's budget for 2013 incorporates a third multi-year piece of legislation.
The industry is lobbying hard on this issue. In February, for example, president of the Association of Equipment Manufacturers (AEM) Dennis Slater, said, "There are significant differences in the House and Senate highway bills that must be resolved in conference. House and Senate leadership and conferees will need to put partisanship aside and work together to quickly achieve an agreement on a comprehensive, fully funded highway bill to send to President Obama before the stopgap extension expires next month."
One aspect of the highway bill that is being stressed by lobbyists is its ability to create jobs. This is particularly significant in American politics at the moment, with the unemployment rate still at a high (for the US) rate of 8.3%, meaning some 12.8 million members of the labour force are out of work. Research by the US Transportation Department has shown that every US$ 1 billion invested in transportation creates 27000 jobs.
Indeed, the US Bureau of Labour Statistics puts the unemployment rate in the construction sector at 17.7% - more than twice the national average. It is a fact not lost on the Associated General Contractors of America (AGC), who's CEO Stephen Sandherr said, "Thousands more construction workers would be employed today if Congress wasn't years late in passing measures like the highway and transit bill."
However, with the presidential election taking place at the end of this year, there is a real chance of deadlock throughout 2012 on this issue, with neither side wanting to be seen to back-down over any issue or hand a political victory to the opposition.
Nevertheless, cutting unemployment is seen as key to getting the economy back to growth. As Mr Sullivan said, "The faster job creation works, the faster the recovery cycle spins."
More jobs mean more individuals with money to spend - which could give residential construction a boost - and also more taxes at a state and national level.
This is a particularly important point for individual states, which are required to balance their books.
According to the PCA, there has been a direct impact on the construction industry throughout the downturn as a result of these lower tax levels. The Association said that in the ten years in the run-up to the downturn, discretionary spending on roads and highways accounted for 2.4% of all state spending.
That figure started to dip in 2008, and by 2010 it was as low as 1.8% - a fact the PCA attributes to state-level financial distress. However, it added that some work normally funded by discretionary spending might have been paid for as part of US stimulus spending measures in the American Recovery & Reinvestment Act (ARRA).
In addition to the general economic benefits that a highway bill would bring, the poor state of repair of large parts of the country's infrastructure is also a pertinent point. The collapse of the I-35W Mississippi River Bridge in Minneapolis-St Paul in August 2007 due to structural defects and maintenance issues has focussed minds on the safety implications of under-funded infrastructure. This tragedy saw 13 people killed and 145 injured.
This is another aspect that those campaigning for the passage of a highway bill are lobbying on - particularly the fact that a report published following the collapse said 1 in 9 similar bridges in the US were structurally deficient.
Despite the weak market conditions, contractors in the US are grappling with the problem of rising costs. According to the AGC, a weighted average of prices of materials used in construction, plus contractors' consumables like diesel fuel, tyres and equipment, has risen +4.5% in the last 12 months. Price rises for fuel, structural steel and other metallic components like copper pipes have been particularly steep.
In contrast, prices for various concrete products, bricks and tiles have been flat and in some cases have fallen over the last 12 months. The weak price growth in concrete products is no doubt linked to the fact that the PCA says cement production in the US last year ran at less than 60% of the installed capacity.
Another measure of construction costs, the Turner Building Cost Index, produced by Turner Construction Company, puts inflation in the industry at a more moderate level. It said the cost of constructing non-residential buildings rose +2.12% last year.
Ken Simonson, the AGC's chief economist said, "Cost increases have slowed in recent months but haven't disappeared. In fact today's producer price increase report [February 16] may be the low point, as manufacturers and commodities markets are signalling that bigger increases may be just around the bend."
The "Tinge of optimism" Mr Sullivan talked about sums up the US construction situation well. Markets are finally turning up after five years of declines, although the recovery remains weak at the moment. All things being well, 2013 should see much more robust growth for the industry, but other factors such as commodity price rises and political incompetence could still cause damage.