Immediate Federal Action Urged to Ease Construction Industry Crisis

Rapid government action to stabilize financial markets, stimulate the economy, and lower energy and transportation costs remains an urgent priority, according to a statement issued today by the National Ready Mixed Concrete Association (NRMCA). “Congressional passage of the Foreclosure Prevention Act, signed by the President on July 30th, was an important first step,” said NRMCA President Robert Garbini. But “a brutal squeeze of soaring energy costs and a sharp demand downturn is severely damaging construction companies,” he warned, “as well as the many thousands of companies that support them.”

“Our 850 member companies are mobilizing to press government leaders for urgent action,” he explained, as “companies are losing money or even closing. Jobs are disappearing. Communities are being injured. Delays in action will inflict longer-lasting damage with greater ripple effects,” Garbini warned. “The American construction industry is a trillion-dollar engine of job creation,” he noted, “generating 18% of total U.S. job creation during the most recent expansion cycle (2003-05). But during the first six months of this year,” Garbini pointed out, “the sector accounts for roughly 60% of total U.S. job losses.” “Industry costs usually have fallen when the economy weakens,” he continued, “but not this time, since the impact of energy costs upon our operations is pervasive.” According to the NRMCA statement:

* Energy accounts for 41% of the cost of producing a ton of cement;
* 22% of the total cost structure of the ready-mix concrete industry is driven by the cost of energy;
* Almost one-quarter of the cost of producing and delivering a truck of ready-mix concrete has increased by more than 80% due to the sharp hike in diesel fuel costs; and
* Cement demand (a good proxy for ready-mix) fell 10% last year and is expected to fall another 16% by the end of 2009—a cumulative 25% in volume terms over three years.

“Healthy construction and ready-mix concrete industries are essential to America’s future growth potential,” said Garbini. “Federal and state programs to support vital infrastructure investment are crucial to create jobs and get the economy on the path to recovery.” he added. “An immediate priority should be quick Congressional action to fix the projected insolvency of the Highway Trust Fund due to a $3.2 billion shortfall,” he urged.

Founded in 1930, the National Ready Mixed Concrete Association, based in Silver Spring, MD, represents the producers of ready mixed concrete and the companies that provide materials, equipment and support to the industry. It conducts education, training, promotion, research, engineering, safety, environmental, technological, lobbying and regulatory programs.