Construction was on the bleeding edge of job losses last year. The Bureau of Labor Statistics reported on Friday that construction accounted for nearly one-quarter of the 2.6 million jobs lost throughout the economy in 2008, even though the industry employs only one out of 20 nonfarm workers.The industry has shed jobs for 18 months in a row, with losses accelerating rapidly from 20,000 in September to 101,000 in December. Further losses seem all but certain.Last month, 236 AGC members answered a short survey that asked about market conditions. AGC released the results on Thursday, January 8, coincidentally a few hours after President-elect Barack Obama urged Congress to quickly pass a stimulus bill containing large doses of spending on transportation, public building, power and other infrastructure spending.The overwhelming majority of respondents said they had seen or expect a downturn in the following construction markets: highway, 93%; building, 92%; utility, 84%; water resources, 78%; other public work, 91%; and private construction, 96%. Three-quarters of respondents had laid off workers in the past 6-12 months as a result of the downturn; the median response was about 30% of the workforce had been laid off. Nearly two-thirds expect further layoffs in the next 6-12 months.Underscoring the value of federal stimulus funding, 86 of respondents said that if their state received extra federal funding and therefore was able to put additional projects out to bid, they would avert layoffs and/or hire additional workers. Five out of six said they would be able to begin work within a month or less after being awarded a project. Most also said winning new projects would affect their decision to purchase new equipment.Thanks go to the many members who took the time to fill out the survey, providing additional detail on many of the questions. To see a copy, go to www.agc.org/survey_results.For more information, contact Ken Simonson at (703)837-5313 or simonsonk@agc.org.
On January 8, AGC hosted a media conference call with approximately 60 reporters to announce its first-ever construction employment and business forecast. President-elect Doug Pruitt (Sundt Construction, Tucson, Ariz.), CEO Steve Sandherr, Chief Economist Ken Simonson and members Brian Burgett (Kokosing Construction, Fredericktown, Ohio), Tracy Hart (Tarlton Corporation, St. Louis, Mo.), Steve Kimball (Kimball Construction Co, Baltimore, Md.) and Don Weaver (Weaver Bailey Construction Company, El Paso, Ark.) outlined how under current market conditions almost two-thirds of commercial construction companies are planning to lay off workers this year. Several media outlets covered the event and survey data, including Fox Business News, Associated Press, Reuters and Wall Street Journal. For a sampling of media coverage of the event, click here.
Two charges against providing economic stimulus through infrastructure spending are that it leads to little employment, and that the money flows too slowly to help during a downturn. Recent estimates from the Federal Highway Administration (FHWA) and the U.S. Army Corps of Engineers show the job potential is large. The circumstances of the current recession suggest the jobs would be added quickly.
Voters on Election Day approved a huge schedule of state and local bond and tax issues in support of infrastructure spending for schools, colleges, other public buildings and highways. The Bond Buyer estimated that successful bond issues alone totaled $54 billion, the second-highest total after 2006 and about 82 percent of issues on the ballot.
The freezing of credit markets, combined with sharply reduced expectations for the economy, are drastically lowering the number of construction starts. At the same time, the slowing world economy, along with a rebound in the value of the dollar against some currencies, has driven down many materials prices.
The upheaval on Wall Street is delaying or stopping projects all over the country, even ones already under way.