An estimated two-thirds of the nation’s nonresidential construction companies are planning to cut their payrolls, according to new employment and business forecast figures released by the Associated General Contractors of America. All told, those layoffs are forecast to result in a 30% decline in the number of people working on construction projects.
“Unless the business climate changes significantly and soon, the construction sector will continue to experience the kind of devastating job losses and crippling declines in business activity that will undermine efforts to end the recession,” Stephen Sandherr, the association’s CEO said.
The forecast results, which are based on a representative survey conducted by the construction association late in 2008, found no relief in sight for construction companies that already have been among the hardest hit by the economic slowdown. Many construction companies experienced significant slowdowns beginning late last year, resulting in a 10% decline in the number of construction workers since 2006, Sandherr pointed out.
According to the forecast figures, the association’s member companies have seen or are planning for declining activity in every type of construction market. Ninety-two percent of building contractors are expecting or experiencing declining activity.
The forecast did find, however, that planned investment 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% of nonresidential construction companies would either cancel layoffs or add new employees if states embarked on stimulus-funded infrastructure projects.
For survey results (PDF), click here.