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.

ASCE Issues Guidelines For Stimulus Investment

Civil Engineers Present Guidelines for Economic Stimulus Infrastructure Investment
American Society of Civil Engineers’ principles will help ensure that investments aremade wisely and create long-standing benefits

Reston, Va.—The American Society of Civil Engineers (ASCE) has released their recommended ‘Principles for Infrastructure Stimulus Investment’ designed to help guide lawmakers and the Obama administration when allocating economic stimulus funding for infrastructure projects poised to aid in rebuilding the nation’s economy. ASCE is encouraged by last week’s introduction of the American Recovery and Reinvestment Bill of 2009, which highlights a shared focus on accountability and infrastructure investment. This investment is expected to create and sustain jobs, and begin to address the nation’s crumbling infrastructure if appropriately applied to areas that most require federal support.America’s infrastructure is in dire need of proper, sustained attention, as evident by the grade of “D” in ASCE’s 2005 Report Card for America’s Infrastructure. On January 28, ASCE will release its 2009 Report Card, and early indications are that little improvement has been made in the past four years. Infrastructure-related economic stimulus investments can reduce congestion and delays on America’s roadways; enhance public transit systems; reduce blackouts, brownouts and service interruptions; update the nation’s aviation system; and replace leaking water pipes. Careful consideration must be made in the selection of projects—both in stimulus and long-term legislative solutions—to ensure that appropriated funds for infrastructure investment produce desirable results.“The House bill is an encouraging indicator that Congress shares ASCE’s recognition of the need for both infrastructure investment and strict accountability for the use of federal money in this volatile economy,” said D. Wayne Klotz, P.E., F.ASCE, ASCE president.In order to guide the process of allocating funds to these important projects, ASCE has compiled guiding principles which will help steer investment in the right direction by keeping the focus on rehabilitating worn-out infrastructure to increase safety and building new infrastructure to keep the nation competitive in the global economy.

Among these principles, ASCE believes that all projects supported by an economic stimulus investment must meet the following fundamental criteria:
Projects must create and sustain employment increases;
Investments must provide long-term benefits to the public (such as congestion relief);
Long-term maintenance and upkeep needs of all infrastructure projects—existing and new—must be taken into account; and
To ensure accountability and transparency an auditing program must be established to review the program and measure desired outcomes.

As the investments are made, proper attention must be paid to the prioritization and selection of these projects to ensure that the criteria are met. The following principles should guide selection decisions:
The project should deliver measurable improvements in public health, safety and quality of life;
The project should provide substantial, broad-based economic benefit;
The project should be designed and built in a sustainable and cost-effective manner, and proper consideration must be given to life-cycle costs; and
The project should have a significant environmental benefit such as area restoration, improved air quality through reduced congestion or better watershed management through eliminating vulnerabilities in a system.

ASCE has long been an advocate for improving and maintaining the nation’s infrastructure. Following the release of the 2005 Report Card for America’s Infrastructure, ASCE recommended spending $1.6 trillion over five years to bring the condition up to an acceptable level. Since that time federal funding has fallen far below that recommended level.The 2009 ASCE Report Card grades will be released at a press event on January 28, 2009. The event will be held in the Murrow Room of the National Press Club, Washington, D.C., at 10 a.m. A live Webcast of the event will also be available at: http://www.visualwebcaster.com/asceinfrastructurereportcard/.
Founded in 1852, the American Society of Civil Engineers (ASCE) represents more than 146,000 civil engineers worldwide and is America’s oldest national engineering society. For more information, visit www.asce.org.

Where Will The Stimulus Money Go In Construction?

A recent article in ENR, identified over $159 million in projects included in the proposed economic stimulas package. Read Article ENR reported that over $43 million will be spent on transportation projects, and $36 billion in energy related projects.

A recent press release by the AASHTO, stress that the federal government should strongly consider states that have "Ready to go" projects. "State DOTs right now are moving to advance thousands of projects, so that contracts can be let in 120 days, as the House bill has proposed," said John Horsley, Executive Director of the American Association of State Highway and Transportation Officials (AASHTO). "Those projects will enable the transportation industry to keep people at work, and bring construction workers back on the job very quickly. As late as last Friday we asked the state DOTs if they are prepared to have 50 percent of the $30 billion under contract within 120 days, as the House bill stipulates. They responded, "Yes, we can!" Read Press Release or Watch Video.

A new article by the Associated Press reports that President Obama's $825 million economic stimulus package likely create 670,000 construction jobs by the end of 2010. AP conducted an interview with Moody's Chief Economist Mark Zandi. According to Zandi, proposed stimulus package would would direct $70 million to the nation's infrastructure. Read Article