Mixed Bag in Latest AGC MO Report
Date Posted: April 30, 2015
Posted In: News,
Missouri contractors are reporting a mixed-bag of confidence levels over their industry’s economic outlook, looking six, 12 and 18-24 months ahead. AGC of Missouri contractors in the Building Division report an increase of 10.5 pts. in their overall optimism for business and economic conditions over the next six months when compared with the 1st Quarter last year. However, within a new data breakout for members in the Heavy Highway/Infrastructure Division, member contractors predict a dramatic fallback in projected highway, bridge and road work over the next 24 months.
The latest results for the AGC of Missouri’s Contractor Confidence Index (CCI), released today, can be found at: http://tinyurl.com/AGCCCIFirstQ.
According to Leonard Toenjes, CAE, president of the AGC of Missouri, lack of funding for MoDOT and other transportation projects, and a sluggish recovery in Missouri’s industrial sector do not forebode well for contractors working on highways, transportation, and larger industrial projects. “Our contractors need to be working on our state’s highways, bridges and plants, not just filling potholes with asphalt,” added Toenjes. “The real shame of it all is that Missouri’s federal highway matching funds will go to other states if the Missouri State Legislature fails to act this session. For every dollar our state deploys towards infrastructure, we receive four dollars in federal matching funds. At this point we are on a path that will make it impossible for Missouri to match federal funding in Fiscal Year 2017. The window for state match of federal funds is not totally shut, but it is closing fast. Missourians currently pay 18 cents per gallon in federal fuel taxes. If we don’t meet those minimums for federal matching funds,
those federal funds will go to fix roads and bridges in other states, not Missouri, while citizens in Missouri continue to pay federal fuel taxes. For instance, in Fiscal Year 2017 Missouri will turn away $167 million in federal matching funds. And every year thereafter that we fail to meet federal matching fund requirements, Missouri will turn away $400 million each year that our citizens paid at the pump.
“Missouri loses out even further because it won’t receive payroll taxes on all those construction jobs that will be lost,” said Toenjes. “Then, there’s the additional loss of sales taxes and other economic activity those jobs would have supported.”
Confidence levels in the Commercial Building Division are much more favorable, having risen from their lowest of 51.3 pts. in 3rd Quarter of 2013 to 71.15 pts. for 1st Quarter of 2015. Building contractors also are much more confident regarding the 12-month outlook, also rising dramatically from 50.7 pts. in 2nd Quarter of 2013 to 69.23 pts. in 1st Quarter of 2015. Looking ahead 18-24 months, building contractors have seen a jump from 53.1 pts. in 2nd Quarter of 2013 to 65.38 in 1st Quarter of 2015.
“However, recent construction employment figures for Missouri, released last week by the AGC of America, are troubling,” said Toenjes. “Our state lost 3,000 construction jobs in March and lost 100 jobs over the past 12 months for a total construction employment in March 2015 of 110,600. Missouri now ranks 43rd out of 50 states in construction job growth. (view at: https://www.agc.org/sites/default/files/Files/Communications/State_Empl_201503_Alpha.pdf).
Toenjes added that while Missouri is losing ground, 41 other states saw growth in construction employment over the past 12 months. (View release at: https://www.agc.org/news/2015/04/21/construction-employment-increased-41-states-during-past-year
“Without question, our state is falling behind,” said Toenjes. “The question is, are we willing to be a fourth tier state? Funding for infrastructure is the key to future growth. If we don’t do something soon to address infrastructure in Missouri, funding for MoDOT’s construction budget will drop to $325 million annually, which is less than the amount needed each year just to maintain state roads and bridges. Our roads and bridges, and public transportation all need our attention, and a significant investment in Missouri’s infrastructure will translate directly into construction jobs as well as federal matching funds.”