Volume 47, Issue 8 - October 2008
AGC Leaders Discuss Fuel Impact
Douglas E. Barnhart of J. Reese Construction Inc. in San Diego, president of the Associated General Contractors of America (AGC) and Stephen E. Sandherr, chief executive officer of the AGC met with President Bush on August 12, to discuss the impact of rising petroleum costs on the construction industry. Barnhart and Sandherr were among leaders from a coalition of eight other business associations to meet with the president. Barnhart used the meeting opportunity to express some of his concerns.
“Construction costs have risen much more than consumer prices this year, due to the extreme run-up in petroleum costs,” Barnhart said. “The producer price index (PPI) for inputs to construction rose 10.4 percent from June 2007 to June 2008 versus 5.0 percent for the consumer price index.”
AGC representatives pointed out that the construction industry has faced unforeseen increases in all construction materials, and that is resulting in a reduction in projects and causing job uncertainty.
During the meeting, President Bush told the group that increased domestic energy production will have a psychological impact on the marketplace. He also said that the activities of the coalition, “have worked to increase the pressure on Congress.”
Increase 2.4 Percent in July Sales of newly-built single-family homes rose 2.4 percent to a seasonally adjusted annual rate of 515,000 units in July, the Commerce Department reported.
“While the improvement in new-home sales in July is definitely a favorable development, it comes on the heels of two consecutive months of significant downward revisions to sales numbers for May and June, so we have to keep the latest report in perspective,” says David Seiders, chief economist for the National Association of Home Builders. “Nevertheless, we are cautiously optimistic that home sales are approaching a bottom, and that the newly enacted first-time homebuyer tax credit will help stimulate sales and provide crucial support for a market turnaround.”
According to the report, the inventory of new homes for sale declined for a fifteenth consecutive month in July to 416,000 units, the lowest number since April of 2007.
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