In the American Recovery and Reinvestment Act’s first year on the books, its billions of construction dollars have been a lifeline for an industry battered by a long economic slump. Firms that snagged ARRA-funded contracts have been able to keep workers or add to workforces. Even so, construction has a jobless rate of nearly 25%. As companies chase ARRA projects, they’re looking for more help from Congress. But neither a jobs bill nor transportation authorization is a sure thing. Illustration by Rafael Ricoy Related Links: Transport Sector Sets Rapid Pace Electricity Programs See Work Start to Surge Water, Cleanup Sectors
President Obama has proposed a $3.8-trillion budget for fiscal year 2011 that would freeze total “non-security” domestic discretionary spending—the category that includes most federal construction programs—and result in cutbacks in most of the key construction accounts. Industry sources say the proposed reductions are not surprising given current economic realities, and they point to a few bright areas in the budget’s long list of cuts. Slide Show DOT: Federal-aid highway obligation The DOT program funding highway projects was one of the few programs to receive a modest boost. Industry sources such as the American Road and Transportation Builders Association say the
Tight credit, a glut of inventory and a sluggish economy overshadowed the early hours of this year’s World of Concrete show in Las Vegas, which opened on Feb. 2. Although official registration numbers were not available at press time, attendance throughout the week was expected to drop slightly from last year’s roughly 65,000 attendees. Exhibitors noticeably trimmed down their booth space yet were in aggressive selling form, hopeful they would post small revenue gains this year. Showgoers said they expected federal stimulus, leftover from 2009’s package, to prop up public works during the second half of 2010 but felt the
President Obama has proposed a $3.8-trillion budget for fiscal year 2011 that would freeze total "non-security" domestic discretionary spending--the category that includes most federal construction programs--and result in cutbacks in most of the key construction accounts. Photo: White House Obama, with OMB Director Peter Orszag (left) and deputy director Rob Nabors, seeks freeze in "non-security" spending Obama's proposal, transmitted to Congress on Feb. 1, does recommend boosting a few construction programs, including the federal-aid highway obligation ceiling. It also proposes a new, $4-billion "National Infrastructure Innovation and Finance Fund," for transportation projects "of regional and national significance." Administration officials have
+ Image Source: McGraw-Hill Construction Analytics. Construction Contract Value Cumulative Year-To-Date Through December 2009. McGraw-Hill Construction Starts It’s “official”: 2009 was a really bad year. The dollar value of new construction starts last year fell 26%, according to McGraw-Hill Construction’s December data. This follows annual declines of 13% in 2008 and 7% in 2007. Adding a new twist to the downward cycle was a 33% decline in the non-residential building market, which was even deeper than the 31% decline registered by the home building market. Despite a massive influx of stimulus spending, the non-building market finished last year 9% below
When President Obama sends his 2011 budget plan to Capitol Hill, he will propose freezing non-defense discretionary spending—which includes most construction programs—at 2010’s level for the next three years. Construction executives hope Obama will keep some infrastructure line items unscathed or maybe even recommend some hikes. But the final numbers are up to Congress and won’t emerge until after months of partisan, election-year budget battling. Complicating the picture further, Democrats have seen their razor-thin, filibuster-proof 60-vote majority slip to a vulnerable 59 votes with Republican Scott Brown’s win in the Jan. 19 Massachusetts Senate race. + Image On the Board:
President Obama will propose a three-year freeze at current levels on total "non-security" spending--the budget sector that includes most federal construction programs--beginning in fiscal year 2011, senior administration officials say. But within that total, budgets for individual departments and agencies and specific line-item programs that are Obama priorities could rise, officials say. Details will be disclosed Feb. 1, when the President transmits his 2011 budget proposal to Congress. Rob Nabors, the Office of Management and Budget's deputy director, told reporters Jan. 26 that the proposed spending cap would apply to overall non-security funding, and hold it for three year's at
The housing market is limping toward recovery. For planners, engineers and contractors whose business is driven by residential construction, the pace is painfully slow. That was a key message that emerged at the homebuilding industry’s largest trade show, Jan. 19-22 in Las Vegas. Predictably, attendance is about half of what it was in 2006 at the International Builders’ Show. One economist termed the builders that did attend “survivors.” The housing industry remains weighed down by foreclosures, unemployment, tightened lending standards and pricing instability. There were 3.95 million foreclosure filings nationwide at the end of 2009, with an additional 2.8 million
Cost estimating by the U.S. Energy Dept. on its construction and cleanup projects needs revamping to keep overruns under control, says a new report from the U.S. Government Accountability Office. Outdated estimating guidelines have caused the agency to sometimes request too little money from Congress to complete work, adds GAO. Contractors do almost all DOE’s site construction and waste-cleanup projects. Some jobs will take decades; cost estimates total hundreds of billions of dollars. “Without a way to ensure that its contractors use best practices in generating cost estimates” and without adequate federal oversight, “DOE has effectively ceded a significant portion
Source: Bureau of Labor Statistics School Building Costs Once thought to be virtually recession-proof, the school construction market is starting to falter, undercutting building costs associated with that market. Since the beginning of last year, the Bureau of Labor Statistics’ producer price index for new school building construction costs has fallen 2.3%, according to the BLS November 2009 index. The cost index is still up 2.2% from a year ago, but this is well below the year-to-year increases of 7.5% in 2008, 9.9% in 2007 and 8.3% in 2006. Through the first eleven months of 2009, public school construction was
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