Editors Message
While the country is in a recession, the state of the construction and equipment industries is more like a depression. The unemployment rate for the construction industry is above 17 percent — that’s higher than any other sector and nearly double the national unemployment rate of 9.7 percent. Workers throughout the construction sector have lost 1.4 million jobs since the start of the recession.
The construction manufacturing industry has fared even worse. Spending on construction equipment fell by over 50 percent in 2009 compared to its peak in 2006. As a result, the economic output of this industry — which includes manufacturing, distribution and repair stations — will contract by nearly 40 percent and result in the loss of approximately 550,000 jobs. Put another way, two out of every 25 jobs lost since the beginning of 2008 can be traced to the downturn in construction equipment spending.
But there is hope — the current federal highway programs are set to expire on Feb. 28 (on Dec. 15 the House passed a two-month extension on the bill) and that presents us with a great opportunity for change. A multi-year reauthorization of these programs would direct badly needed monies to rebuilding and upgrading our nation’s aging infrastructure. A multi-year plan would create the market certainty needed for state departments of transportation to plan and execute infrastructure strategies and for contractors to rehire laid-off workers and purchase new equipment — providing real, sustainable economic stimulus.
For these reasons, the Association of Equipment Manufacturers (AEM) and the Associated Equipment Distributors (AED) have come together to launch the Start Us Up USA Campaign. The goal of this initiative is to educate the public and policy makers on the urgent need to begin work on a multi-year reauthorization of our highway programs today. SAFETEA-LU, the most recent federal surface transportation law, expired at the end of September 2009. Distracted by health care reform and climate change legislation, neither the U.S. House of Representatives nor the Senate has made headway on a reauthorization bill. As a consequence, the highway program is operating under a series of short-term extensions that have added to historic volatility in the construction markets.
“We’re not asking for a handout like the ones Congress gave the auto industry or the financial services sector,” says AEM president Dennis Slater. “We’re just asking Congress to do its job and make highway reauthorization a priority.”
Members of Congress with the best understanding of our transportation needs, led by U.S. Rep. James Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, want to reauthorize our surface transportation programs for another five or six years. The Obama administration and its congressional supporters, on the other hand, want only a temporary, under-funded 18-month extension. We need better.
The uncertainty caused by a lengthy delay will further shrink markets, cost jobs and idle or close more plants — some, perhaps irreversibly. And the damage to the equipment manufacturing and distribution industry will continue to multiply throughout the U.S. economy. You can help. Get involved and let your voice be heard. Tell Congress to get its act together on full reauthorization now. An extension just won’t cut it. Visit www.startusupusa.com/issue.cfm and help us start up America.
Keith Gribbins
Managing Editor
kgribbins@benjaminmedia.com
