Construction group calls for more government funds

The Associated General Contractors of America has called on Congress to provide more funding to help the industry better weather the financial crisis after construction spending decreased in the month of May. 

"Stimulus has made a difference, but Congress needs to provide long-term funding for transportation and water projects to assure further economic growth," said Ken Simonson, the group's chief economist, in prepared remarks. "Federal stimulus dollars helped keep public construction afloat and buoyed single-family construction."

Construction spending shrank again in May, dropping 8 percent from a year earlier. However, stimulus-funded public works projects increased from levels a year ago. The increase was the only bright spot for the non-residential construction sector, according to the group. 

Simonson urged Congress not to let construction funding for highways, transit and airports lapse.

"Congress and the White House need to make these programs a priority, along with long-term funding for drinking water, wastewater and waterways," he said.

The group also noted that homebuilding increased from levels last year. 

Simonson said the homebuyer tax credit had a profound effect on his industry. New, single-family home construction in May soared 31 percent from levels a year earlier while new multi-family construction, like condos or rental housing, tumbled 57 percent.

"The first-time homebuyer tax credit that expired at the end of April boosted demand for single-family and lessened demand for multi-family," he said. "Those distortions have now ended, although Congress voted to extend the closing deadline until Sept. 30 for families that have signed contracts by April 30."