Economist Predicts that California's Construction
Employment and Spending Will Take Years to Return to Pre-Bust Levels
March 12, 2010
California's construction industry will build fewer projects and
employ fewer people compared to its mid-decade peak through at least
2015, a business economist told staff of the state's Air Resources
Board. As a result, the financially hard-pressed industry will generate
fewer emissions for at least the same period, giving California
time to revise its emissions standards for off-road diesel equipment
and still meet and exceed its environmental goals, construction
"The state's construction industry will remain a shadow of
itself for years to come," said Dr. Lynn Reaser, president
of the National Association of Business Economics and chief economist
for Point Loma Nazarene University. "This means fewer construction
projects, fewer pieces of construction equipment in use and, ultimately,
Even if the state's construction industry stabilized and quickly
began to grow, Dr. Reaser predicted that the industry would employ
fewer than 700,000 people in 2015, compared to more than 900,000
in 2006. Construction spending would also remain well below peak
levels, reaching about $60 billion in 2015, compared to nearly $100
billion in 2006.
Contractors, construction workers and construction officials pointed
to Dr. Reaser's outlook as they urged the state's Air Resources
Board to reconsider its current efforts to force businesses to retrofit,
repower or replace billions of dollars worth of off-road diesel
equipment. They added that the latest analysis of the state's data
confirms that off-road diesel emissions will be below the state's
goal for years to come.
"The evidence is overwhelming: contractors can't afford to
comply with the current rule and the state doesn't need it,"
said Michael Kennedy, general counsel for the Associated General
Contractors of America during a public hearing convened by the Board's
executive officer. "Given the choice between clean air and
more jobs, or clean air and fewer jobs, it's pretty clear which
way the state should go."
Kennedy urged the Board's staff to delay the implementation of certain
fleet average requirements until at least 2015. He noted that by
then a new generation of cleaner construction equipment will be
available that won't require costly and potentially unsafe retrofits.
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