The Associated General Contractors of America last week unveiled a plan designed to revive the hardest hit sector of the economy, the nation’s construction industry. The plan, “Build Now for the Future: A Blueprint for Economic Growth,” is designed to reverse predictions that construction activity will continue to shrink through 2010, which would cripple broader economic growth.
“The problems facing the construction industry aren’t just devastating construction workers, they are crippling our broader economy,” said Stephen Sandherr, AGC’s CEO. “Simply put, you can’t fix our economy until you fix the construction industry.”
Sandherr said the mix of new incentives, tax cuts, policy revisions and infrastructure investments outlined in the plan are needed to stem the dramatic decline in construction activity and employment taking place nationally. He added that a new analysis of federal employment data conducted by AGC found construction employment declined in 324 of 337 metropolitan areas between August 2008 and August 2009.
The hardest hit area of the country was Reno-Sparks, Nev., Sandherr said, losing 35 percent of its construction workforce. Following close behind were Duluth, Minn., 33 percent; Tucson, Ariz., 31 percent; Wenatchee, Wash., 30 percent; and Redding, Calif., 28 percent.
The construction industry lost 1 million jobs during the one-year period, he added.
Only one community had a double-digit increase: Columbus, Ind., at 14 percent; followed by Anderson, Ind., at 6 percent; with Tulsa, Okla.; Longview, Wash.; and Baton Rouge, La., following at a 3 percent uptick.
Sandherr said the recovery plan’s primary focus was on stimulating new private-sector construction activity, which accounts for 70 percent of the market. The plan calls for repealing the alternative minimum tax and increasing and extending a series of tax credits and cuts, including the net operating loss carry back and the 2001 and 2003 tax cuts to boost investments in real estate development.
He added that new incentives on global investment in real estate were needed to make it easier for international investors to put Americans back to work. Sandherr added Congress should restore President Obama’s “fast track” trade promotion authority and remove trade barriers to boost demand for new domestic manufacturing and shipping facilities. The plan also calls for doubling federal investments in transportation infrastructure, renovating dated and inefficient federal facilities and investing in clean water, flood control and navigation projects. It also calls for restoring the gas tax’s lost purchasing power, encouraging more public-private partnerships, expanding the Build America bonds program and exempting construction activity from the private activity bond cap.
Sandherr said the federal government needs to encourage more green construction while avoiding counterproductive measures such as government-mandated labor agreements and new Buy American requirements.
For more information on the plan, go to http://www.agc.org/cs/blueprint_for_economic_growth.