An estimated two-thirds of the nation's non-residential construction companies are planning to cut their payrolls, according to new employment and business forecast figures released last week by the Associated General Contractors of America. Those layoffs are forecast to result in a 30 percent decline in the number of people working on construction projects. According to the forecast figures, the association's member companies have seen or are planning for declining activity in every type of construction market.

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. According to the forecast, construction companies would increase their payrolls by 25 percent if the stimulus included new infrastructure investments. And construction companies predict they would invest an average of $500,000 this year in new equipment if they received new work as part of the stimulus package.

Stephen Sandherr, association CEO, noted that the AGC was working to find ways to improve the business environment for the construction community. He said builders across the country were urging Congress to include infrastructure investments in the stimulus, and that the association was calling for $2.2 billion to help renovate hundreds of federal facilities and for additional funds to repair crumbling schools.

He noted that the association was working with a range of building, design and labor groups to call today for new tax incentives to encourage conversion to energy efficient buildings, construction of renewable energy facilities, remediation of brown fields and construction of new airport and commercial projects. Sandherr added that the groups were proposing the creation of “economic crisis zones” that would, provide tax exemptions and private activity bonding authority to finance construction projects in communities experiencing two consecutive months of double-digit unemployment.

“We are doing everything imaginable to ensure that our construction employment and business forecast does not become a reality,” Sandherr said.

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