NO RECOVERY YET FOR CONSTRUCTION INDUSTRY AS LATEST FIGURES SHOW DOUBLE DIGIT DROPS IN SPENDING COMPARED TO LAST YEAR

Congress and Administration Must Embrace Pro-Growth Measures to Stem Private Spending Declines of Over 20 Percent to Avoid Greater Job Losses, Nation's Contractors Urge

The construction industry continues to suffer from significant declines in privately-funded construction investments, with new federal figures showing private construction investments declined by 20.6 percent between September 2008 and September 2009.  The new Census Bureau figures show there's no sign of an economic recovery yet for the nation's construction industry, the Associated General Contractors of America noted today.

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NEW MEASURES NEEDED TO STEM CONSTRUCTION CRISIS AS NEW FIGURES SHOW DECLINE IN NONRESIDENTIAL CONSTRUCTION SPENDING

August Data Shows Fourth Consecutive Drop, in Contrast to Housing Rebound

New figures showing an almost 5 percent increase in spending on single-family homebuilding and residential improvements mask the fourth consecutive monthly slide in nonresidential construction, a leading industry economist said today.  Ken Simonson, chief economist for the Associated General Contractors of America, noted that spending on nonresidential construction projects declined in August by $3 billion, bringing the cumulative drop since August 2008 to $34 billion or 4.7 percent.

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NONRESIDENTIAL CONSTRUCTION SLIDES IN JULY AS STIMULUS DOLLARS 'TRICKLE' OUT TO CONTRACTORS, TOP INDUSTRY ECONOMIST NOTES

Private Nonresidential Spending Falls for Fifth Straight Month While Homebuilding Surges

Downturns in multi-family construction and both private and public nonresidential construction swamped a strong upswing in single-family homebuilding in July according to an analysis of federal construction spending data provided today by a leading construction economist.  That analysis of U.S. Census Bureau data released today shows that total construction spending fell 0.2 percent, seasonally adjusted, from a downwardly revised June total.

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Ken Simonson, chief economist for the Associated General Contractors of America provided the following comment in response to today's construction spending numbers released by the U.S. Census Bureau:

Bad news underlies the rosy top-line figure in today's report on construction spending from the Census Bureau. Census reported that total construction put in place climbed 0.8 percent from March to April at a seasonally adjusted annual rate, with private residential construction finally rallying 0.7 percent after years of steep declines.

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"The increase in nonresidential construction spending for March reported today by the Census Bureau is a reminder that construction is often a lagging indicator of economic activity.  Increases in manufacturing construction are being propelled by huge refinery and steel-mill projects that were begun well-before the economic downturn.  These large projects are eclipsing broader negative trends.  However, as they are completed or scaled back in the coming months, we will get a fuller picture of how much nonresidential construction is being adversely affected.

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"Construction spending passed a somber milestone today according to new February 2009 data released today by the Census Bureau.  The 0.2 percent decline over last year in private nonresidential construction is the first time monthly spending has declined for two straight months year-over-year since 2003.   Unfortunately this decline in construction activity is likely to accelerate for the foreseeable future.  While the recently enacted stimulus should lead to needed increases in public construction spending that will be little solace for tens of thousands of construction workers that rely on private construction activity to earn their livelihood.  That is why our 33,000 member firms will continue to work with government officials and business leaders to encourage continued investments in needed infrastructure projects, improvements in credit markets and support for new business activity and investments," said Kenneth Simonson, chief economist for the Associated General Contractors of America.

"Today's dismal report on construction spending highlights the urgency of putting stimulus funds to work and unlocking the credit markets," said Ken Simonson, chief economist of the Associated General Contractors of America. "The new Census figures show that spending on nearly every type of nonresidential construction is now declining. The stimulus money can put thousands of construction workers back on the job promptly, but only if federal and state agencies do their utmost to turn dollars into contracts. Meanwhile, it will take a renewal of bank and bond market lending to get private construction back on track."

"Today's construction figures underscore the dramatic decline in business activity that is putting hundreds of thousands out of work, endangering the viability of tens of thousands of businesses and dragging on the broader economy. This is a stark reminder of the need for immediate and significant federal investments in vital construction and infrastructure projects. Without those investments, we estimate over a million construction workers will lose their jobs while many of the small businesses that dominate the construction industry will close their doors. With these investments, however, construction companies will be able to save those jobs, expand payrolls and invest in equipment and supplies, while building the foundation for a stronger economy," said Stephen Sandherr, chief executive officer of the Associated General Contractors of America.