AGC estimates 30 percent decline in construction employment and business in 2009

According to the Associated General Contractors of America, two-thirds of the nation’s construction companies are planning layoffs this year. The AGC also estimates 30 percent of non-residential construction workers will lose their jobs unless the market conditions improve or stimulus investments are made.

“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,” says Stephen Sandherr, chief executive officer of the AGC.

The forecast results are based on a representative survey conducted by the construction association late in 2008. The results indicate no relief in sight for construction companies that have already been among the hardest hit by the economic slowdown. Many construction companies experienced significant slowdowns beginning late last year, resulting in a 10 percent 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 and 93 percent of road builders are expecting or experiencing declining activity. More than 83 percent of utility contractors are bracing for declines while 77 percent of water resource contractors are expecting a decline in business building levees or locks.

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 percent of non-residential construction companies would either cancel layoffs or add new employees if states embarked on stimulus-funded infrastructure projects.

Construction companies would increase their payrolls by 25 percent and would invest an average of $500,000 this year in new equipment if the stimulus included new infrastructure investments that resulted in work for their company.

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“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,” says Sandherr. “Without a stimulus, construction companies will cut jobs, slash spending and continue to be among the hardest hit sectors within our economy.”