AGC: Construction stimulus will boost employment, capital spending

Ohio general contractor Brian Burgett today told members of the U.S. House of Representatives Committee on Transportation and Infrastructure to recommend to the full House economic stimulus activities that would have an immediate positive impact on economic activity, according to release from the Associated General Contractors of America, Oct. 28.

"An infusion of federal infrastructure funding would have a direct stimulus effect by putting more contractors and their employees back to work," said Burgett, president and CEO, Kokosing Construction Co., Fredericktown, Ohio, according to the release. "We have excess capacity at Kokosing and throughout the construction industry. Federal investments will create jobs in the Midwest and throughout the country. Additional public infrastructure projects will allow our industry to maintain our work force and necessitate hiring more workers. It will allow us to purchase equipment and preserve manufacturing jobs."

Burgett testified on behalf of AGC, the largest and oldest national construction trade association in the United States. AGC strongly supports increased investment for America's transportation, federal and water infrastructure and other public works programs, according to the release.

Burgett noted that state and local budgets have declined significantly and hampered the ability of those governments to borrow short term, delaying or eliminating various infrastructure improvement projects. With fewer projects to bid on and increased materials prices, contractors and their suppliers are forced to reduce their work force, according to the release.

"Kokosing employs approximately 3,000 workers and the consequence of this decline in construction activity is the anticipated reduction of our work force by 15 [percent]to 20 percent in the coming year," Burgett said, according to the release. "That translates to 450-600 good, skilled, and safe workers who will lose their jobs because of these bad market conditions."

Burgett added that there has been a more than 5 percent decrease in heavy and civil engineering construction employment over the past 16 months, which equates to more than 52,000 construction employees now out of work.

Under current conditions companies will be forced to trim plans for expansion or investment in equipment, leading to a broader negative impact on the economy, Burgett said. "Each year we typically replace 10 percent of our equipment fleet and in a growing market we would also purchase additional equipment," Burgett said, according to the release. "The cost of this investment over the past few years has averaged $35 million per year. We have already canceled some planned purchases for next year and are putting many others on hold until we see what funding is going to be available for new work."

A complete copy of Burgett's remarks and prepared testimony are available at www.agc.org.