AGC Reports That Construction Not To See Recovery In 2010

According to a report recently released by the Associated General Contractors (AGC) of America, nine in ten contractors say there will be no recovery in 2010. many of the contractors I have talked with would agree with the AGC report. Most contractors are struggling to find work, and build a backlog. The survey of AGC members also found that fewer contractors plan to purchase construction equipment and doubt they will be able to hire new staff this year. To view the report, visit AGC.

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

One of the most telling elements of the report was that most construction firms believe that they will be unable to hire employees in 2010. In addition, the AGC report reveals that most firms will delay capital investments and purchasing new equipment. According to the report, 73 percent of firms said they laid off employees in 2009, averaging 39 layoffs per firm. For 2010, however, 60 percent of firms say they are unsure whether they will be able to add new staff, or be forced to make further cuts.

The report also details the impact the stimulus has had on the construction industry. Contractors reported that the stimulus drove up expectations for highway, sewer and public building work. Thirty-one percent of contractors say they were awarded stimulus funded projects. Of these, 46 percent say the stimulus helped them retain an average of 24 employees each. Another 15 percent say the stimulus helped them to add an average of 10 new employees per company while 12 percent cite the stimulus as driving new equipment purchases.

The stimulus is finally beginning to have a measurable, but limited, impact on the construction industry,"" Sandherr noted. "The full impact of those investments has sadly been tempered by the inability of Congress to put a host of multi-year infrastructure funding plans in place."

While 2010 looks like another difficult year, Sandherr noted that construction costs are at low levels which is positive for those seeking to build.