Now that the great debt deal of 2011 has been consummated, what does it mean for the construction industry? Despite all of the press and attention the Debt Ceiling debate garnered, the impact on the construction industry will not be very positive. The leadership in Washington did not do enough of the right things to spur confidence and investment.
The country needed closure, but we got another extension. The deal formed a "Super Congress" that will meet later this year to determine what programs to cut. This alone creates more uncertainty as we must wait to see what programs are cut. The administration and Congress don't seem to understand that business leaders need certainty to invest and run their businesses.
Construction projects are likely to suffer. When the Super Congress meets, numerous programs are going to be cut in order to meet the deficit reduction mandates set. Infrastructure and other construction projects are likely to be reduced or cut. The Super Congress is expected to make recommendations by Thanksgiving, with the full Congress voting on the recommendations by the Christmas holiday.
Not enough was done. After weeks of build-up, debate, and controversy, little was done. In the end, the Debt Ceiling was raised, and minimal cuts were made. Hardly enough to boost confidence and get spending under control. In addition, the president and Congress failed to get to the $4 billion in cuts needed to maintain the country's AAA rating. In the coming weeks, don't be surprised if the U.S. is downgraded for the first time in our history.
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