PCA calls for infrastructure investment

As the nation struggles to deal with the largest economic crisis in decades, attention is focused on an economic stimulus bill that many believe should contain significant dollars for infrastructure improvements that will create jobs at both the local and state levels. According to Ed Sullivan, chief economist for the Portland Cement Association, if the government does not act quickly that nation could lose 2 million jobs in 2009.

"Times are tough. We need a government stimulus package that creates jobs throughout the nation," Sullivan said. “Infrastructure funding could create jobs on both an immediate and long-term basis. For every 10 construction jobs created by a project, the community gains 17 additional jobs that stay in the region even after a project’s completion.”

However, simply building and repairing roads is not enough for our continued economic stability. The projects must be constructed with the highest quality materials, according to PCA.

“If we used concrete instead of asphalt for all new roads built between now and 2015, state governments could save over $100 billion during the life of the roads. Concrete roads require minimal maintenance and can last nearly three times longer than a similar roads paved with asphalt,” Sullivan said. “This means more money for local economies that can go to schools, police, and other public services.”
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Housing starts to sink 36 percent

Housing starts in 2008 are expected to be 36 percent lower than 2007 levels, creating three straight years of declines. according to a recent Portland Cement Association (PCA) economic research report. The toxic mix of weak economic conditions, tight credit conditions and tepid sales are causing huge housing inventory overhangs that must be cleaned up before housing construction can begin its recovery.

"Despite large home price declines and improved affordability, sales remain sluggish and offer little hope that the inventory glut will be worked off anytime soon," said PCA Chief Economist Ed Sullivan. "The economic environment remains weak, being dragged down by high energy costs and weak employment fundamentals."

Sullivan says current home inventories stand at a 10.5-month supply, more than double the 5-month supply that normally accelerates start activity. Continual cutbacks in starts and marginal gains in sales are expected to be more than offset by increases in housing foreclosures that will be added to the market's inventory in 2008 and 2009.

PCA projects an additional one-percent start decline in 2009, with recovery to take place in 2010. Even then, the onset of recovery will vary among regions and states. States that fully participated in the housing boom, like California, Arizona, Nevada and Florida, will have a disproportionally high number of defaults and foreclosures and even more delayed housing start recoveries. Your comment?