Stephen E. Sandherr, CEO of the Associated General Contractors of America, could have hopped a quick train from the association’s Arlington, Va., headquarters to Capital Hill to plead the case for government help for the crippled construction industry.
Instead, he went to Phoenix, Ariz., a city where the construction industry is in the same sometimes predicament of its namesake mythological bird, in ashes. Phoenix has lost 91,400 construction jobs since 2007, 54% of that year's total, according to AGC.
“This city has lost more construction jobs than any other city since 2007,” Sandherr said during the teleconference in which he outlined an extensive plan the association says will help the industry recover.
Sandherr argued that it will take a laundry list of tax law changes, trade agreement amendments, stimulus money targeted to improve infrastructure, and an easing of regulatory “burdens” to turn it and the rest of the country’s ailing construction markets gold again.
“The sector’s revival is anything but guaranteed,” Sandherr said.
While the recession officially ended 20 months ago, Sandherr said that in construction, the unemployment rate remains over 20%, more than double the national average.
Construction spending is down 34%, nearly $400 billion from the peak in 2006.
And the $135 billion of stimulus money the government provided earlier was “overwhelmed by overall shrinking demand."
Sandherr promised that helping the construction industry recover will boost the economy now “and for decades to come” by making it more globally competitive and stimulating other employment. And, if some of the stimulus comes from improving buildings and infrastructure, waste and pollution will be cut as well.
The association’s plan for restoring the industry to health is three-pronged:
1. Rebuild the private portion of the industry, which once accounted for 76% of total construction activity, through a number of tax law changes that would repeal some taxes, offer more tax breaks and credits, and keep other tax breaks permanent.
2. Tackle what the association calls a "growing infrastructure deficit" by raising more funding through a vehicle miles tax and encouraging public-private partnerships. This would include investing more in federal buildings to make them more energy efficient, and making tax changes that would exempt construction from the private activity bond cap.
3. Ease costly and time-consuming regulatory burdens. That would include accelerating and streamlining environmental reviews, including accelerating licensing for nuclear power plants. Also, the association advocates a comprehensive national energy plan that would encourage green construction, reform transit approvals, avoid government mandated labor agreements, and rescind Buy American requirements.
In answering reporters’ questions, Sandherr agreed the list of requests is extensive.
“This is a plan where, if we were king,” it would be enacted, Sandherr said. “Our chance of getting none of it done is 100% if we don’t ask."
Teresa Burney is a senior editor for Builder magazine.
Learn more about markets featured in this article: Phoenix, AZ.