Long Tunnel, No Light

Sobering Report says 2010 will continue to challenge contractors

Treading water. It was a metaphor raised several times during a gloomy press conference to paint a picture of American transportation contracting companies trying to survive.

It arose during the presentation of the findings of the Transportation Construction Coalition’s survey of 527 transportation contractor respondents, member companies of the American Road and Transport Builders Association and/or the Associated General Contractors of America, by a TCC panel (See box).

The outlook, said AGC’s chief economist Ken Simonson, is “dire.” Texas contractor Dean Word called current conditions “brutal.” Terex boss Ron Defeo said “the industry is not getting any oxygen right now.”

The basic message, hammered home again and again, was that while a one-time investment such as the stimulus can help to mitigate the worst of the economy’s hardship, there is no alternative to a long term investment if the industry is to thrive and in turn build and maintain infrastructure and employ more people. That of course will only come with a new six-year surface transportation bill, legislation which is currently stalled in Congress.

“This is a capital investment,” said DeFeo, “and an 18-moth delay is just not acceptable to the industry.”

Perhaps the good news the in the survey’s presentation was an underlying confidence that if a six year bill is passed – with $450 billion for roads and bridges that House Transportation and Infrastructure chairman Jim Oberstar wants – the outlook gets much rosier much faster. The panel conveyed a sense that there was an “if you give us the tools we can do it” attitude just below the outer layer of serious concern.

The survey found that (spoiler alert: this list contains data that might upset you)

More than 80 percent of respondents will not buy new construction equipment in 2010

More than 40 percent anticipate layoffs of non-seasonal employees in 2010

Less than 20 percent plan to purchase new construction equipment (19 percent) or trucks (18 percent) next year