Heavy Construction Firms Reeling
Representatives of the Transportation Construction Coalition told reporters Friday that passage of a five- or six-year highway funding reauthorization bill is essential to their industry and their companies.
Ron DeFeo, the chairman and CEO of construction equipment maker Terex Corp., said his company has cut its global workforce from 24,000 to 16,000 and will see its revenues drop to $5 billion this year from $10 billion in 2008. Ken Simonson, chief economist for the Associated General Contractors of America, said no other industry in America has unemployment as severe as the 18.7 percent current unemployment rate in the U.S. construction industry. In summary, the news conference Friday by these and other representatives of the Transportation Construction Coalition indicated the highway construction industry is reeling and expects things to be worse in 2010 unless a five- or six-year highway funding reauthorization bill is passed by Congress and signed into law.
The coalition released results of a nationwide survey of 527 highway and transit contractors who were asked about hiring practices, planned spending on equipment, backlogs of work, and other issues. Simonson said 87 percent of the respondents reported they do not have enough work on their books for 2010 to prevent having to lay off non-seasonal employees, which is far less common for this industry than layoffs of seasonal employees, he noted. The $27 billion of federal stimulus money devoted to highway construction has helped many contractors and has saved construction jobs, but "road and transit builders have no confidence that the stimulus will be enough" without a long-term spending program, Simonson said. State funding of highway construction is also depressed, he said, adding, "If anything, I think that state funds for highways are going down even more in 2010."
"At this point in time, we think our industry is in a very serious state," said DeFeo, whose company is based in Westport, Conn. He said the company now has 5,000 U.S. workers, down from 9,000 about 18 months ago.
The coalition hopes to see action soon on a six-year surface transportation reauthorization bill, which U.S. House Transportation and Infrastructure Committee Chairman Jim Oberstar, D-Minn., supports. As recently as Oct. 28, Oberstar joined a Capitol Hill rally by heavy equipment manufacturers and called on Congress to pass the six-year bill being prepared by his committee. "The projects funded by the American Recovery and Reinvestment Act have put people back to work all over the country, but those funds will run out," he said. "We need a six-year investment bill that will create six million net new jobs and help us to compete with China, India, and the rest of the world."