Washington, D.C. - "Nonresidential construction is on the verge of a potentially long slide," Ken Simonson, Chief Economist for The Associated General Contractors of America (AGC), warned today. Simonson's comments followed reports from the Census Bureau on construction spending in September and the National Association for Business Economics (NABE) on third-quarter and expected activity.
"The Census figures show nonresidential spending eked out a gain in September of 0.1 percent," Simonson noted. "But private nonresidential spending was down nearly 1 percent from its high-water mark in June, while public spending tumbled 1.3 percent in September alone.
"Contractors have been reporting that developers put lots of projects on hold because of the credit freeze and weakening demand for stores, offices and other facilities," Simonson observed. "Meanwhile, states had to postpone construction bond issues or defer budgeted projects in order to meet balanced-budget mandates.
"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 stated. "That's a reversal from the July survey.
"Construction has a lot riding on tomorrow's election results?at local, state and national levels," Simonson concluded. "There are many school and other bond issues up for a vote. And the next President and Congress will need to work promptly to enact long-term highway, transit, airport and water funding bills. Meanwhile, we urge immediate action on infrastructure spending as part of any stimulus bill this year or next."
NOTE: Contact Simonson for a set of contractor and developer comments describing current credit and market conditions. The Census report is at www.census.gov/constructionspending; the NABE survey at www.nabe.com.
The Associated General Contractors of America (AGC) is the largest and oldest national construction trade association in the United States. AGC represents more than 33,000 firms, including 7,500 of America's leading general contractors, and over 12,500 specialty-contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters. Visit the AGC Web site at www.agc.org.