Md. Construction Firms Face Gloomy 2010 Forecast


WASHINGTON (Jan. 20, 2010) - Maryland's construction industry is one of the hardest hit in the nation, and the business's picture nationally is not likely to get much better, according to a forecast released Wednesday.

The Associated General Contractors of America released its construction employment forecast for 2010, predicting privately-funded construction would continue to decline. Although the organization released some state-by-state data, Maryland was not singled out.

The forecast said that 81 percent of firms surveyed had to cut profit margins in their bids to stay competitive, with another 11 percent willing to take a loss just to keep working. Almost three-quarters of the firms had to lay off workers in 2009, and less than one-third said they received at least one stimulus-funded contract.

According to figures from the U.S. Census, Maryland lost more than 30,000 construction jobs in the past year. Construction employment in the state dropped 18 percent between November 2008 and November 2009, a change equal to Wyoming and better than only four other states—Kentucky, Tennessee, Nevada and Arizona.

The AGCA said nationwide spending on construction projects dropped to a six-year low at the end of 2009, and nine out of 10 firms surveyed do not expect serious improvement until at least 2011.

CEO Stephen E. Sandherr even called for a second stimulus bill to help the devastated construction industry during a conference call to discuss the forecast on Wednesday.

The American Recovery and Reinvestment Act of 2009 included $135 billion for construction projects, and is "beginning to have a measurable but limited impact on the industry," Sandherr said.

But Maryland construction firms say they have not been helped by stimulus funds, aside from highway and transportation work.

Donald Thomason of Silver Spring, owner of DE Thomason Construction Co. Inc. in Takoma Park, said he hopes this year will be better than the last, but no thanks to stimulus funds.

"I wished we had got some stimulus money; I'm telling you we needed it bad," Thomason said. "They helped all the fat cats; they didn't help the poor guy out."

The construction industry accounts for 7 percent of Maryland's employment, and is the fifth-largest economic sector in the state, according to the Governor's Workforce Investment Board.

In a September 2009 report, the investment board's Construction Industry Initiative Steering Committee said that stimulus construction funds for Maryland totaled $860 million, with $610 million going to transit and highway transportation projects.

One area the investment board said will drive demand in construction is the health care industry, which was confirmed in the AGCA forecast; 57 percent of contractors expect growth or stability in the demand for hospital and higher education construction.

President and owner of Maryland Construction Inc. Douglas C. Winger of Bowie said public sector construction work has dried up, and he has had to lay off several employees.

Before the recession, Winger said five or six construction companies would typically bid for each new project, but now the number is closer to 30 or 40.

While he would prefer to build and renovate schools in Prince George's County, Winger said he may have to look into commercial development of foreclosed properties to stay in business.

Winger is not hopeful about stimulus funds for construction projects in Maryland; "I don't see it coming," he said.

Capital News Service contributed to this report.

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