Ken Simonson, Chief Economist for The Associated General Contractors of America (AGC), warns that the nonresidential construction industry may not bounce back from its current slump anytime soon. Simonson cautions that reports from the Census Bureau on construction spending in September and the National Association for Business Economics (NABE) reports on third quarter results indicate no significant gains in the nonresidential sector in the near future.
“The NABE survey, conducted October 10-23 among corporate economists, found that companies on balance plan to trim spending on structures in the next 12 months,” Simonson says. “That’s a reversal from the July survey.”
Additionally, the credit freeze and weakening demand for commercial construction has many developers putting projects on hold. Simonson also reports that many states have postponed construction bond issues or defer budgeted projects in order to meet balanced-budget mandates.
Simonson says the AGC supports immediate action on infrastructure spending as part of any upcoming stimulus bill.
