Construction Companies Losing Billions Stuck in Gridlock, AGC Report Finds (AASHTO)
Traffic delays are costing construction companies billions of dollars in lost time each year, according to a report released last week by the Associated General Contractors of America.
AGC CEO Stephen Sandherr warned that, as long as Congress puts off passing new surface transportation reauthorization legislation, the problem is only going to get worse.
“Traffic tie-ups nationwide are sapping productivity, delaying construction projects, and raising costs for construction firms of all types,” Sandherr said during a June 10 conference call. “Given the hardships they are facing, the last thing contractors need is to burn time, fuel, and money stuck in traffic.”
This report is based on survey results collected from 1,200 construction companies nationwide over the past few months. AGC’s survey results show that 93% of firms reported traffic and congestion were affecting their operations.
The contractors also reported that construction projects are delayed an average of one day per job because of traffic congestion, which increases the total costs of these projects. Overall, the total losses the construction industry faces due to delays caused by traffic is estimated by AGC to be $23 billion annually.
Traffic is just another problem that construction companies are facing as the poor economy reduces the number of transportation construction jobs being ordered by states, the report notes. With no guaranteed funding from the federal government in the near future, states are choosing short-term easy fixes, such as repaving roads, instead of major highway expansion projects, according to AGC.
“As larger projects get put on the back burner, traffic stagnates, construction firms have less work, and equipment plants see orders drop,” Sandherr said. “It is hard to think of a better way to undermine the [recovery act] than failing to pass a surface transportation bill.”
Sandherr noted the lack of a new federal transportation bill is causing states to undertake considerably fewer and smaller transportation projects — 17% fewer bid lettings this year worth 29% less than the year before.
Congress and the Obama administration should act quickly to pass new surface transportation reauthorization legislation this summer to generate more projects that will reduce gridlock, Sandherr said.
AGC’s report and a state-by-state breakdown are available at tinyurl.com/AGC-survey.
