Arlington, Va. - An estimated two-thirds of the nation's non-residential construction companies are planning to cut their payrolls, according to new employment and business forecast figures recently released by the Associated General Contractors of America. The layoffs are forecasted to result in a 30% decline in the number of people working on construction projects.
“Unless the business climate changes significantly and soon, the construction sector will continue to experience the kind of devastating job losses and crippling declines in business activity that will undermine efforts to end the recession,” said Stephen Sandherr, the association's chief executive officer.
The forecast results, which are based on a representative survey conducted by the construction association in late 2008, found no relief in sight for construction companies that already have been among the hardest hit by the economic slowdown. Many construction companies experienced significant slowdowns beginning late last year, resulting in a 10% decline in the number of construction workers since 2006, Sandherr noted.
According to the forecast figures, the association's member companies have seen or are planning for declining activity in every type of construction market. Ninety-two percent of building contractors are expecting or experiencing declining activity. Water resource contractors are also expecting a decline in business building levees or locks, according to the survey.
The forecast did find, however, that planned investments in infrastructure projects as part of the stimulus package is likely to dramatically improve the employment and business outlook for the year. For example, 85% of non-residential construction companies would either cancel layoffs or add new employees if states embarked on stimulus-funded infrastructure projects.
According to the forecast, construction companies would increase their payrolls by 25% if the stimulus included new infrastructure investments. And construction companies predict they would invest an average of $500,000 this year in new equipment if they received new work as part of the stimulus package.
“With a stimulus, construction companies can get more people to work and more money into the economy in a way that will immediately boost our economy,” commented Sandherr. “Without a stimulus, construction companies will cut jobs.“