C&D World: Construction Rebound Not Immediate

When Ed Sullivan, chief economist of the Portland Cement Association (PCA), addressed the C&D World event in Miami in 2006, he accurately predicted that sub-prime mortgages would soon haunt the United States economy in a big way.

At the 2009 C&D World event, held in Tampa, Fla., March 22-24, Sullivan touched on the full effects of what has happened to the economy since then, and also shared his thoughts on how the federal government response may or may not help matters.

“Unlike most recessions, this is not regional-specific,” said Sullivan of the current climate. “It is everywhere, and it is unique.”

While the lost jobs had added up by the end of February 2009, Sullivan sees more payroll paring to come. “We could lose at least another 6 million jobs,” he stated. “What’s going to stop this? We are at the mercy of the fundamentals. The private sector has abandoned all strength.”

The public sector, in the form of the federal government, has stepped in with its attempt to get money flowing again. (Sullivan noted that state governments are facing record deficits.)

Regarding the $758 billion American Recovery and Reinvestment Act (ARRA), Sullivan said, “It will shorten the recession, and make it less severe.”

But the PCA chief economist added that it is not a quick fix and his predicted effect on the construction and paving industries serve as an example.

Sullivan said that any gains for these industries will not be substantial until the second half of 2010, when larger projects such as bridge replacements and new highway lane miles will actually be in full swing. In 2009 some jobs will be saved by ARRA, but he does not foresee job creation until 2010.

Longer term, the federal government’s challenge will be trying to restore balanced budgets after years of deficit spending during the Bush Administration and in at least the first year of the Obama Administration.

C&D World 2009 was held March 22-24 at the Tampa Convention Center in Tampa, Fla.