Transportation construction firms expecting 40% layoffs in 2010
Jan 1, 2010 12:00 PM
While the $27 billion dedicated to highway construction in the $775 billion stimulus package likely saved thousands of construction-related jobs, it was not enough to prevent widespread layoffs among road and transit construction businesses, according to a nationwide survey released by the Transportation Construction Coalition. And while stimulus funds will continue supporting transportation projects next year, 44% of contractors anticipate having to lay off additional permanent employees due to overall economic conditions, the survey found.
Nearly 70% of transportation contractors responding to a survey reported receiving stimulus-funded contracts work so far this year. But 63% also reported they had to lay off permanent employees during 2009 due to adverse business conditions.
The TCC points out many state transportation programs have declined over the past several years, victims of program cuts precipitated by the recession's impact on state revenues. As a result, most transportation contractors have been operating under capacity. The federal stimulus funds made available to states in April helped offset some of those declines in funding, coalition members say.
However, the requirement that stimulus-funded projects be “shovel ready” discouraged larger-scale and longer-duration projects that sustain long-term personnel and equipment needs from getting funding. For example, less than 20% of the contractor respondents say they plan to purchase new construction equipment (19%) or trucks (18%) next year. And just 5 percent anticipate bringing on new, non-seasonal personnel.
Despite the federal stimulus funding, over three-quarters of the 527 firms responding to the TCC survey anticipate either a “slight” (46%) or “severe” (32%) decline in 2010 in the state markets in which they work. More than 76% expect state transportation departments to put out less work to bid on in 2010 than they will this year.
Ken Simonson, chief economist for the coalition member Associated General Contractors of America, noted that the survey found that only 17% of transportation contractors will enter 2010 with a work volume backlog at least as large, by value, as they had entering 2009. Almost one in five report they will enter 2010 with at least 50% less backlog than a year prior. An additional 33% report the value of their work backlog will be 25% to 50% less going into 2010.
TCC members say the survey results underscore the need for quick passage of a robust, six-year surface transportation legislation that provides the level of investment for highway, bridge transit and safety projects that multiple, independent, bipartisan commissions have said the nation needs.
The complete survey results can be found at: http://www.agc.org/galleries/news/TCC%20survey%20results.pdf
This special Bulk Transporter report on construction is a joint project involving Concrete Products, and Cement Americas, both sister publications of Bulk Transporter.
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