Associated General Contractors of America Outlines Measures to Boost Private and Public Construction Activity
March 21, 2011

In hopes of reviving the U.S. construction industry, the Associated General Contractors of America (AGC) has launched a plan, called “Building a Stronger Future, A New Blueprint for Economic Growth,” that outlines measures to help boost private sector demand for construction, tackle a growing infrastructure maintenance backlog and reduce “needless red tape and regulations.” According to Stephen Sandherr, AGC’s chief executive officer, the plan was developed to overcome the years-long construction downturn."

“In too many of our cities the construction industry today is just a mere shadow of what it was at the start of 2007. Only 14 cities added construction jobs during the past four years, while construction employment remained unchanged in another six,” says Sandherr. “These staggering job losses have wiped out more than 2.2 million construction jobs and driven the industry unemployment rate to 21.8 percent—more than twice the national average. Despite representing only 4 percent of the total workforce, the construction industry accounted for 30 percent of the jobs lost over the past four years.”

Sandherr adds, “The economy isn’t growing like it would if the construction industry were expanding instead of shrinking.”

This is why, he explains, the AGC crafted this new program.

“Our top priority is finding ways to boost private sector demand, which once accounted for 76 percent of all construction activity, but now accounts for only 60 percent,” says Sandherr. He says the best way to jump start these projects is to put in place pro-growth economic policies.

In hopes of reviving the private sector construction market, the plan sets out to do the following:

  • Expand net operating loss carry back, repeal the alternative minimum tax, establish tax credits for energy efficiency and the purchase of clean construction equipment, make the 2001 and 2003 tax cuts permanent to preserve private capital, create jobs, and boost investments in real estate and other facilities;
  • Approve pending trade agreements and restore “Fast Track” trade promotion authority to boost demand for manufacturing and shipping facilities, and remove trade barriers that inflate costs; and
  • Reject efforts to increase tax on carried interest, eliminate the 3 percent withholding rule, incentivize new equity for real estate projects and extend the payroll tax exemption in 2011.

Sandherr adds, “As we call on congress and the administration to finally end the double taxation of U.S.-based businesses that succeed in international markets--if we made it easier for businesses to invest their overseas profits at home--new plants would be the rule rather than the exception.”

The plan also “calls on Congress to pass legislation limiting major new regulations, reform the approval process for new highway and transit projects and oppose well-meaning labor and Buy American mandates that do little to create new jobs and a lot to add costs and delay work.”

In addition, it “highlights the need to repeal a costly new mandate set to begin next year that requires governments at all levels to withhold 3 percent of the cost of virtually all major construction projects from contractors.”

“For an industry where most firms are lucky to make 3 percent in profit on a project, this new mandate will either put a lot of people out of work or needlessly inflate the cost of public construction,” says Sandherr.

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