AGC unveils plan for construction growth
December 1, 2009
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The Associated General Contractors of America has
unveiled a new plan designed to help revive the nation’s construction industry.
Called “Build Now for the Future: A Blueprint for Economic Growth,” it is designed to reverse predictions that construction activity will continue to shrink through 2010.
“The problems facing the construction industry aren’t just devastating construction workers, they are crippling our broader economy,” said Stephen Sandherr, the association’s chief executive officer. “Simply put, you can’t fix our economy until you fix the construction industry.”
The plan includes new incentives, tax cuts, policy revisions and infrastructure investments, which the AGC said it believes are needed to stem the declines in construction activity. Sandherr also said that a new analysis of federal employment data conducted by the association found construction employment declined in 324 of 337 metropolitan areas between August 2008 and 2009. The hardest-hit area of the country was Reno-Sparks, Nev., which lost 35 percent of its construction work force. Following close behind were Duluth, Minn., and Wisconsin, which each saw a 33 percent decline. Tucson, Ariz., saw a 31 percent decline, while Wenatchee, Wash., saw a 30 percent decline.
Only one community saw a double-digit increase, which was Columbus, Ind., at 14 percent.
Sandherr said the recovery plan’s primary focus is on stimulating new private-sector construction activity, which accounts for 70 percent of the market. He said the plan calls for repealing the federal alternative minimum tax and increasing and extending a series of tax credits and cuts to boost investments in real estate development.
He added that new incentives on global investment in real estate were needed to make it easier for international investors to put Americans back to work. And he said Congress should restore the president’s “fast track” trade promotion authority and remove trade barriers to boost demand for new domestic manufacturing and shipping facilities.
The plan also calls for doubling federal investments in transportation infrastructure, renovating dated and inefficient federal facilities and investing in clean water, flood control and navigation projects. The AGC also calls for restoring the purchasing power of the gas tax, encouraging more public-private partnerships, expanding the Build America bonds program and exempting construction activity from certain bond caps.
Sandherr added that the federal government needs to encourage more green construction while avoiding counterproductive measures like government-mandated labor agreements and requirements to buy American-made goods.
Noting that some of the plan’s provisions would have an impact on the federal budget, Sandherr said the association had gone to great lengths to pair new costs with new sources of revenue. For example, he said the various tax cuts and credits in the plan would be partly offset by increases in income, sales and corporate tax receipts that would come with increased business activity from the plan.
He added that many of the infrastructure investments would be funded by increases in existing user fees, new trust funds, private investments and new bonding authority. Sandherr also noted studies have found that every $1 billion in nonresidential construction activity supports over 28,500 jobs, boosts gross domestic product by $3.4 billion and raises personal earnings by $1.1 billion.
“Putting this plan in place may not be easy, but doing so will unleash a wave of new construction activity, employ thousands, stimulate new investments and lay a foundation for long-term economic prosperity,” Sandherr said. “That’s something Reno-Sparks and the rest of the country could use a lot more of.”
Called “Build Now for the Future: A Blueprint for Economic Growth,” it is designed to reverse predictions that construction activity will continue to shrink through 2010.
“The problems facing the construction industry aren’t just devastating construction workers, they are crippling our broader economy,” said Stephen Sandherr, the association’s chief executive officer. “Simply put, you can’t fix our economy until you fix the construction industry.”
The plan includes new incentives, tax cuts, policy revisions and infrastructure investments, which the AGC said it believes are needed to stem the declines in construction activity. Sandherr also said that a new analysis of federal employment data conducted by the association found construction employment declined in 324 of 337 metropolitan areas between August 2008 and 2009. The hardest-hit area of the country was Reno-Sparks, Nev., which lost 35 percent of its construction work force. Following close behind were Duluth, Minn., and Wisconsin, which each saw a 33 percent decline. Tucson, Ariz., saw a 31 percent decline, while Wenatchee, Wash., saw a 30 percent decline.
Only one community saw a double-digit increase, which was Columbus, Ind., at 14 percent.
Sandherr said the recovery plan’s primary focus is on stimulating new private-sector construction activity, which accounts for 70 percent of the market. He said the plan calls for repealing the federal alternative minimum tax and increasing and extending a series of tax credits and cuts to boost investments in real estate development.
He added that new incentives on global investment in real estate were needed to make it easier for international investors to put Americans back to work. And he said Congress should restore the president’s “fast track” trade promotion authority and remove trade barriers to boost demand for new domestic manufacturing and shipping facilities.
The plan also calls for doubling federal investments in transportation infrastructure, renovating dated and inefficient federal facilities and investing in clean water, flood control and navigation projects. The AGC also calls for restoring the purchasing power of the gas tax, encouraging more public-private partnerships, expanding the Build America bonds program and exempting construction activity from certain bond caps.
Sandherr added that the federal government needs to encourage more green construction while avoiding counterproductive measures like government-mandated labor agreements and requirements to buy American-made goods.
Noting that some of the plan’s provisions would have an impact on the federal budget, Sandherr said the association had gone to great lengths to pair new costs with new sources of revenue. For example, he said the various tax cuts and credits in the plan would be partly offset by increases in income, sales and corporate tax receipts that would come with increased business activity from the plan.
He added that many of the infrastructure investments would be funded by increases in existing user fees, new trust funds, private investments and new bonding authority. Sandherr also noted studies have found that every $1 billion in nonresidential construction activity supports over 28,500 jobs, boosts gross domestic product by $3.4 billion and raises personal earnings by $1.1 billion.
“Putting this plan in place may not be easy, but doing so will unleash a wave of new construction activity, employ thousands, stimulate new investments and lay a foundation for long-term economic prosperity,” Sandherr said. “That’s something Reno-Sparks and the rest of the country could use a lot more of.”
