California's Contractors are Predicting a Slow Economic Recovery in 2010
By: Pam Gray
2010-01-21
AGC of America released its 2010 Construction Hiring and Business Forecast. The forecast was based from survey results AGC of America received by nearly 700 contractors from around the country in late December and early January. The forecast provided estimated percentages of construction companies planning to hire or lay people off during the year, as well as growth projections for all construction, including stimulus-funded construction projects for 2010.
Tom Holsman, chief executive officer of Associated General Contractors of California (AGC) stressed “The need for infrastructure investment is greater now than ever, as shown by the lagging employment figures. I have urged California lawmakers to refrain from making large budget cuts to transportation and construction spending as they will serve to stimulate California’s economy.” Holsman noted that California was among the hardest hit states in terms of construction employment over the past 12 months.
In California alone, survey statistics indicated that 73% of contractors had to lay off workers in 2009 and over 50% were unsure whether this would continue in 2010. Nationally, construction workers carried 20% of 2009 layoffs and employment growth will continue to lag. On the positive side, construction materials costs remain at multi-year lows, providing good deals for anyone willing to begin construction projects. Contractors in California are also optimistic that stimulus funds in the areas of highway, water and sewer, public buildings, and power facilities will improve or at least remain stable in 2010.
Contractors indicted that 2010 will not see the anticipated economic recovery as 90% of those surveyed do not expect to see improvement until at least 2011. Holsman cited reasons for slow recovery such as privately funded construction projects expected to hit a low, bidding on projects at a loss just to keep construction crews busy, and the anticipated decline in companies purchasing new and used equipment. While the $135 billion Federal Stimulus funding in 2009 gained some measurement in the industry, much of the stimulus funds were impacted by the inability of Congress to put multi-year infrastructure funding plans in place.
“The construction portion of the stimulus is having an impact, but it is far from delivering its full promise and potential,” said Holsman, “With construction unemployment still at double digits in California, it is disappointing to see so many stimulus programs getting off to such a slow start.”
View AGC of America’s Press Release
View the 2010 National Construction Hiring and Business Forecast
View state-by-state Construction Hiring and Business Forecasts for 29 states