Jim Haughey is the Chief Economist for Reed Construction Data.

Jim has over thirty years experience as a business economist, including twenty years monitoring the construction market. He has previously worked in government, corporate and consulting roles and has taught at the University of Michigan, Ohio University, Michigan State University and the University of Massachusetts. He has a Ph.D. degree in economics from the University of Michigan.

Construction Industry Forecasts

Notes from Jim Haughey

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Heavy construction steady in 2011 but future funding being cut
Jim Haughey, RCD Chief Economist
Apr 13, 2011

Construction funding took a big cut in the recent compromise on the 2011 budget which cut total fiscal year spending $38 Billion below last year and $78 Billion below the Presidents 2011 fiscal year request. Compared to last year, the cuts included $1.7 Billion for energy and water (not all construction money), hundreds of millions from Justice and Commerce, $800 Million from GSA for federal office buildings, $6.6 billion for military construction as the base realignment program winds down and $3.2 Billion rescinded in the Highway program for earmarked projects never undertaken.

More funding cutbacks should be expected in about five weeks when the Senate and the President will have to compromise again to secure raising the federal debt limit. Some of these added cuts could be in the 2011 budget but most will likely be in the 2012 budget beginning in October. This battle could be longer and uglier than the $38 billion deal approved last week. The Treasury has some tricks to keep over the limit debt off the books for a while.

Rail and alternative projects have the most risk of losing expected funding because both programs build facilities that can only be operated with large subsidies from federal taxpayers of rail and power users. Bridge and airport projects also have more than average risk of losing expected funding.  Both of these are tainted with suspicion that many individual projects have been rewards for influential members of Congress and not essential to transportation system maintenance or expansion.

Jim Haughey Post Archive

04/08 - Five threats to the economic recovery
04/06 - Federal shutdown impact on construction will be immediate
04/01 - Construction jobs steady in March
03/31 - Thank you TARP; good riddance HAMP
03/31 - Thank you TARP; good riddance HAMP
03/29 - Consumer Confidence drop weakens economic and construction recovery
03/28 - US construction will be slowed marginally by Japanese factory shutdowns
03/16 - February housing start plunge overstates market weakness
03/14 - Japanese earthquake will have marginal negative impact on US
03/04 - Contractors hire 33,000 workers in February
02/23 - Construction environment will change with new laws aimed to reduce illegal immigrant population
02/21 - Arab revolts boost oil prices and slow US economic and construction recovery
02/18 - Ten Obama plans that impact 2011-12 construction: likelihood ranking
02/15 - Consumer spending now driving construction recovery
02/14 - President Obama proposes huge rise in infrastructure spending
02/11 - Debate begins on new mortgage finance system
02/04 - January storms cut 32,000 construction jobs
02/01 - Municipal cutbacks and bad weather drop construction spending 2.5% in December
01/31 - Why are consumers spending again and will it last?
01/28 - Construction contributes to 4th Q GDP growth
01/25 - Unfinished Business: New housing finance system still needed
01/20 - What happens if the Chinese economic bubble bursts?
01/19 - Single family starts dip and multi family starts surge; 2011 recovery still on track
01/13 - Why public social and economic policies should be managed separately
01/10 - Why hiring is so slow in this recovery
01/07 - Contractors cut 16,000 jobs in December
01/05 - Economic growth surges at the end of 2010
12/30 - 2011 Economic growth: 2.5% to 4.0% depending of size of federal economic stimulus
12/28 - Oil prices will keep rising in 2011-12
12/16 - Housing Market Recovery Still on Hold
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