While recession abates for some sectors of the U.S. economy, the construction equipment industry remains stalled in a deep depression caused in part by a scarcity of new federal investment in needed transportation improvements that would benefit the public and strengthen our nation’s competitiveness. In fact, 8% of all jobs lost during the recession—or two out of every 25—can be traced to this ailing industry, according to a new study released on Sept. 28.
The research, conducted by IHS Global Insight, a respected economic and financial analysis firm, comes one day prior to the expiration of federal transportation funding. Congress has yet to pass a new multiyear reauthorization bill, and many experts consider that legislation to be the best opportunity for lawmakers to help stimulate the slumping construction sector this year and improve traffic. To highlight the report’s dire findings and rally support for swift government action, construction equipment workers and business leaders launched the Start Us Up USA! campaign. Led by the Associated Equipment Distributors (AED) and the Association of Equipment Manufacturers (AEM), Start Us Up USA! is trying to ensure secure passage of adequately funded transportation legislation before the spring construction season begins in early 2010.
“The current recession has placed a severe drag on the construction equipment industry, which is consequently holding back the broader economy from recovery,” said Scott Hazelton, director of construction services for IHS Global Insight and principal author of the study.
Other key findings include:
§ The construction equipment industry, which includes manufacturing, distribution and equipment service facilities, has shed 37% of its workforce. By comparison, auto manufacturing and dealership jobs are down by 16%, while job losses in the finance and insurance industry amount to 6% of their workforce;
§ Spending on construction equipment has fallen by more than 50% compared to its peak in 2006;
§ The economic output of this industry has contracted by nearly 40% and resulted in the loss of approximately 550,000 jobs. That’s 8% of all jobs lost since the start of the recession; and
§ In 2008, the construction equipment industry contributed $243.3 billion in U.S. economic output and supported nearly 1.25 million jobs. The jobs supported by this industry were roughly equal to the number of men and women employed in manufacturing computer and electronic equipment.
