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.”
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