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Despite the fact that nearly 70 percent of transportation contractors received stimulus-funded contracts work this year, most transportation contractors are not optimistic about the economic conditions, and about 77 percent expect the construction market to drop in 2010. The data comes from a recent survey conducted by the Washington, D.C.-based Transportation Construction Coalition.
According to TCC members, the results of the survey gives more weight to the need for a robust, six-year surface transportation legislation involving the level of investment for highway, bridge transit and safety projects that multiple, independent, bipartisan commissions have said the nation needs.
"Our members have capacity; they're ready to meet the nation's needs but the state DOTs can't offer projects for which there is no stable source or commitment of funding by the federal government," said Joy Wilson, president and CEO of the TCC's National Stone, Sand & Gravel Association. "The repair or replacement of America's crumbling infrastructure requires vision, long-term commitment for multi-year projects that enhance safety and U.S. competitiveness; it is overdue but when enacted will create American jobs not just in the industries who build roads, but in the industries and farms and businesses who depend on surface transportation to get their goods to market."
Many states have had to cut back transportation programs due to the recession, and most transportation contractors have been operating under capacity, TCC says. Some of the federal stimulus funds that went to states in April helped offset those declines.
However, these transportation contractors don't expect growth in the coming year, with about 19 percent planning to purchase new equipment and about 18 percent planning to buy new trucks.
"Contractors in many states still do not see sustainable, state-funded, market growth on the horizon until the overall economy rebounds significantly," said Alison Black, vice president for policy and chief economist for the American Road & Transportation Builders Association, a coalition member. "When they hear that the one source of stable funding for the market over the past four years is in doubt-the core federal highway and transit program-it's not surprising many are tightening operations."
More than 76 percent said they expect state transportation departments to put out less work to bid on in 2010 than they will this year.
"It is impossible to overstate just how difficult current conditions are or how dire the outlook for next year is," said Ken Simonson, chief economist for the Associated General Contractors of America, a coalition member. "One-time investments in transportation infrastructure like the stimulus help, but they're simply no substitute for having a long-term investment strategy in our roads, bridges and transit systems."
Stimulus money didn't stop these companies from experiencing significant layoffs; in fact, 63 percent reported layoffs of permanent employees during 2009.
To read the complete survey results, click here.
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