[RE P O RT] Construction
An Industry Under
The construction industry hit a high note in July, but recent federal government turmoil has industry
insiders worried about the permanence of the recovery.
BY ANNA WELLS
Last year at this time, ID cited the STAFDA September 2012 Economic Report (developed by ITR Economics), which predicted mild gains for the construction industry through the remainder of the year, and additional improvements into 2013. So, were they right? The good news is,
the construction industry has had a relatively steady year. The
bad news is, the federal government cessation has resulted
in immediate impacts, the results of which we may not fully
realize until months after the government has been back up
Shutdown Nixes Data
The Associated General Contractors of America (AGC) is a
leading association for the construction industry. AGC represents nearly 30,000 firms, including 7,000 of America’s general contractors, and over 10,000 specialty contracting firms.
More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters.
There was positive news for AGC in September, where the
association announced that total construction spending had
hit a four-year high in July as private residential and nonresidential activity increased, while public spending declined
(according to an analysis of new Census Bureau data by the
At the time, the association’s chief economist Ken Simonson
said the trends were likely to hold for the remainder of 2013,
citing strong year-over-year gains in single and multifamily
building, a range of results for private and nonresidential categories, and deepening downturns in most public segments.
At this point, association officials urged policy makers in
Washington to enact federal spending bills by September
30 in order to avoid costly interruptions to federally funded
construction projects. They said even a short lapse in appropriations could be very disruptive to construction schedules
for infrastructure and building projects. Unfortunately, the
government shutdown reared its head and, at the time of
this issue’s printing, the association indicated anxiety over the
unknowns related to the shutdown.
Total construction spending hit an unknown level in August
because the Census Bureau was unable to release new data (as
a result of the shutdown), according to the AGC. Association
officials cautioned that the impacts of the shutdown will go
beyond data as solicitations for many new construction projects came to a halt.
“It is hard to get a sense of where the industry is heading
when basic construction spending data isn’t available,” said
Ken Simonson, the association’s chief economist. “
Unfortunately, the lack of federal spending data likely foreshadows a
decline in federal construction spending until the government