State deficits will hamper public construction projects, said Edward Sullivan, chief economist for the Portland Cement Association.
Although recent economic news and activity may suggest a technical end to the severe recession, the conditions facing the construction industry are likely to remain weak for another year or more, according to the most recent economic forecast from the Portland Cement Association (PCA).
“Given this weak outlook for private sector construction, any near-term turn in overall construction activity will be dictated by public construction,” Edward Sullivan, PCA chief economist, said in December. “Unfortunately, state deficits are sterilizing the spending impacts of the federal economic stimulus plan.” According to the Center on Budget and Policy Priorities, 33 states are in severe deficit positions for fiscal 2010, compared to 21 for fiscal 2009.
More than 90% of all highway and street spending is put in place by state and local governments. State fiscal conditions influence discretionary public construction spending and the harsh economic environment facing state and local governments may result in a double-digit decline in discretionary highway/street spending during 2009, Sullivan said. For more information, visit www.cement.org.