New study finds construction equipment workers mired
in economic depression
While recession abates for some sectors of the American
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.
In fact, 8 percent of all jobs lost during the recession
– or 2 out of every 25 – can be traced to this ailing
industry, according to a new study.
The research – conducted by IHS Global Insight, an economic
and financial analysis firm – came one day prior to the
expiration of federal transportation funding. Congress
has yet to pass a new multi-year 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 findings and rally support
for swift government action, construction equipment workers
and business leaders have 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! aims to 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 percent of its workforce. By comparison,
auto manufacturing and dealership jobs are down by 16
percent, while job losses in the finance and insurance
industry amount to 6 percent of their workforce.
•Spending on construction equipment has fallen by more
than 50 percent compared to its peak in 2006.
•The economic output of this industry has contracted
by nearly 40 percent and resulted in the loss of approximately
550,000 jobs. That’s eight percent of all jobs lost since
the start of the recession.
•In 2008, the construction equipment industry contributed
$243.3 billion in United States 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
IHS Global Insight also analyzed the impact of the construction
equipment depression on individual states. From “peak-to-trough”
– roughly 2006 to 2009 – the states suffering the greatest
losses are California, North Dakota, Texas and Wyoming.