The tax breaks that fill the $858-billion Middle Class Tax Relief Act will provide welcome benefits for construction workers, some small firms, family-owned businesses and companies mulling equipment purchases. But the key question for the still-struggling construction industry is whether the measure’s incentives, including an extension of 2001 and 2003 tax-rate reductions, will hoist the economy enough to get more projects under way. If that “trickle up” effect does come to pass, it could give construction markets a boost, but probably not a sharp spike and probably not right away.
Nevertheless, industry economists and financial experts see the legislation, which President Obama signed into law on Dec. 17, as good news. Robert A. Murray, McGraw-Hill Construction’s vice president for economic affairs, says, “The extension of the federal tax cuts is a near-term positive, which should help the fragile U.S. economy gain traction during 2011.” (Engineering News-Record is part of McGraw-Hill Construction.)