October 1, 2009

Associated General Contractors unveils construction industry recovery plan

‘You can’t fix our economy until you fix the construction industry,’ CEO says

The Associated General Contractors of America on Wednesday (Sept. 30) unveiled a plan to revive the construction industry, the hardest hit sector of the U.S. economy.

Entitled: ‘Build Now for the Future: A Blueprint for Economic Growth,’ the plan aims to “reverse predictions that construction activity will continue to shrink through 2010, crippling broader economic growth,” AGC said.

“The problems facing the construction industry aren’t just devastating construction workers, they are crippling our broader economy,” said AGC CEO Stephen Sandherr. “Simply put, you can’t fix our economy until you fix the construction industry.”

The plan outlines a mix of new incentives, tax cuts, policy revisions and infrastructure investments the AGC says are needed to “stem the dramatic decline in construction activity” and employment nationwide.

An AGC analysis of federal employment data found construction employment declined in 324 of 337 metropolitan areas between August 2008 and 2009.

The hardest hit area of the country was Reno-Sparks, Nevada, which lost 35 per cent of its construction workforce.

Communities that have avoided declines in construction employment have little to celebrate, Sandherr said. Taken together, these 13 areas saw a total increase in construction employment of 2,800 people. During the same time, the industry lost 1 million jobs, he noted.

Only one community saw a double-digit increase, Columbus, Indiana, at 14 per cent.

The AGC recovery plan focuses on stimulating new private-sector construction activity, which accounts for 70 per cent of the market.

The plan calls for:

• Repealing the alternative minimum tax and increasing and extending a series of tax credits and cuts to boost investments in real estate development.
  
  
• New incentives on global investment in real estate “to make it easier for international investors to put Americans back to work.”
  
  
• Congress to restore the president’s “Fast Track” trade promotion authority and remove trade barriers to boost demand for new domestic manufacturing and shipping facilities.
  
  
• Doubling federal investments in transportation infrastructure, renovating dated and inefficient federal facilities and investing in clean water, flood control and navigation projects.
  
  
• Restoring the gas tax’s “lost purchasing power;” encouraging more public-private partnerships, expanding the Build America bonds program and exempting construction activity from the private activity bond cap.
  
  
• Regulatory revisions to accelerate many construction projects. These include streamlining environmental reviews, accelerating licensing of new nuclear power plants and establishing a federal multiyear capital budget for public works.
  
  
• The federal government to encourage more green construction while avoiding “counterproductive measures like government mandated labor agreements and new Buy American requirements.”

The plan’s provisions would have an impact on the federal budget, Sandherr acknowledged, noting that the AGC has “gone to great lengths to pair new costs with new sources of revenue.”

The various tax cuts and credits in the plan, for example, would be partly offset by increases in income, sales and corporate tax receipts that would come with increased business activity from the plan.

Many of the infrastructure investments would be funded by increases in existing user fees, new trust funds, private investments and new bonding authority.

“Putting this plan in place may not be easy, but doing so will unleash a wave of new construction activity, employ thousands, stimulate new investments and lay a foundation for long-term economic prosperity,” Sandherr said.

Additional construction employment information available in PDF:

• Summarized by state
  
  
• Ranked by city
  
  
• Summarized by largest employment areas

-RCD Digital Media

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