(Washington)—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 Friday.
And while stimulus funds will continue supporting transportation projects next year, 44 percent of contractors anticipate having to lay off additional permanent employees due to overall economic conditions, the survey found.
Nearly 70 percent of transportation contractors responding to a survey – conducted by the Washington, D.C.-based Transportation Construction Coalition during the first three weeks in October- reported receiving stimulus-funded work so far this year. But 63 percent also reported they had to lay off permanent employees during 2009 due to adverse business conditions.
The TCC, a nationwide group of labor unions and associations, found many state transportation programs have declined over the past several years, victims of program cuts due to 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 said.
Less than 20 percent of the 528 contractor respondents to the TCC survey said they plan to purchase new construction equipment (19 percent) or trucks (18 percent) next year. Five percent anticipate bringing on new, non-seasonal personnel, according to the survey.
Despite the federal stimulus funding, over three-quarters of the 528 firms responding to the TCC survey anticipate either a “slight” (46 percent) or “severe” (32 percent) decline next year in the state markets in which they work. More than 76 percent expect state transportation departments to put out less work to bid on in 2010 than they will this year.
“It is impossible to overstate just how difficult current conditions are or how dire the outlook for next year is,” said Ken Simonson, chief economist for the Associated General Contractors of America. “One-time investments in transportation infrastructure like the stimulus help, but they’re simply no substitute for having a long-term investment strategy in our roads, bridges and transit systems.”
Simonson, on a conference call Friday, also said that the survey found that only 17 percent 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 percent less backlog than last year. An additional 33 percent report the value of their work backlog will be 25 to 50 percent less going into 2010.
Simonson also said transportation construction spending is down in every U.S. state – except Louisiana – from September 2008 to September 2009.
TCC members said the survey results underscore the need for passage of a 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.
“People are treading water, just trying to hold an organization together,” said Dean Word, president of Dean Word Construction, New Braunfels, Texas.
— Joe Yovino