Contractors group outlines plans to stimulate local economy

With construction activity at a near standstill and one in five construction workers out of a job, the Associated General Contractors laid out a blueprint Wednesday aimed at stimulating economic recovery through a series of tax credits, incentives and policy changes.

The investments outlined in the plan are needed to stop the dramatic decline in construction spending and employment being experienced around the nation, AGC Chief Executive Officer Stephen Sandherr said Wednesday in a conference call from Reno.

He said Reno was the nation’s hardest-hit city over the last 12 months, losing 35 percent of its construction workforce, highest among 337 cities listed in the Associated General Contractors’ August employment report.

Las Vegas ranked 315th with a 23 percent decline. Construction employment dropped to 73,400 in August, a loss of 21,400 jobs from the same month a year ago.

All but 13 cities saw declines in the August report, including four with declines of 30 percent or greater. The areas that did not decline added just 2,800 jobs during the year.

Following Reno were Duluth, Minn. (33 percent decline); Tucson, Ariz. (31 percent decline); and Wenatchee, Wash. (30 percent decline).

“The problems facing the construction industry aren’t just devastating construction workers, they are crippling our broader economy,” Sandherr said. “Simply put, you can’t fix our economy until you fix the construction industry.”

Sandherr said every part of AGC’s plan is meant to encourage construction spending, which accounts for 8 percent of gross domestic product and is responsible for one out of 10 manufacturing shipments and one out of 12 machinery shipments.

The Associated Equipment Manufacturers and Associated Equipment Distributors held a rally in Las Vegas Tuesday urging Congress to act promptly on the federal highway spending bill, which calls for a 50 percent increase in funding.

Ken Simonson, chief economist of Associated General Contractors, said continuation of the highway program is extremely important to sustain what little momentum the federal stimulus package provided for the economy.

“I think we need continuation and expansion of tax provisions and for the Federal Reserve to keep monetary policy at a rate that will encourage worthwhile projects,” Simonson said. “That’s what it’s going to take to bring back demand for manufacturing.”

Sandherr said road construction contractors stand to miss out on about $8 billion unless highway funding is promptly reauthorized.

AGC’s plan calls for repealing the alternative minimum tax and increasing and extending a series of tax credits and cuts to boost investments in real estate development.

It also calls for pragmatic new public and private investments in infrastructure that will boost construction while enhancing America’s ability to compete globally for decades to come. This includes doubling federal investments in transportation infrastructure, renovating outdated and inefficient federal facilities and investing in clean water, flood control and navigation projects.

Sandherr wants new incentives on global investment in real estate to make it easier for international investors to put Americans back to work. Congress needs to restore the “fast-track” trade promotion authority and remove trade barriers to boost demand for new domestic manufacturing and shipping facilities, he said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.