Brooklyn Park, MN - Traffic congestion and the delays it causes are costing the nation's construction firms an estimated $23 billion each year according to a new analysis released today by the Associated General Contractors of America. There is no relief from traffic in sight, association officials warned however, as Congress is months late in passing six-year federal transportation legislation, prompting more pain for the hard-hit construction industry.
"Traffic tie ups nationwide are sapping productivity, delaying construction projects and raising costs for construction firms of all types," said Stephen E. Sandherr, the association's chief executive officer. "Given the hardships they are facing, the last thing contractors need is to burn time, fuel and money stuck in traffic."
Sandherr said the new analysis was based on responses from nearly 1,200 construction firms the association surveyed in late April and May. He noted that a "staggering" 93 percent of firms reported that traffic and congestion were affecting their operations. Meanwhile, nearly two-thirds of firms lose at least one day of productivity per worker per year due to traffic congestion, equaling 3.7 million days of lost productivity industry-wide each year.
Construction firms also reported that traffic tie-ups delay the average construction project at least one day, while one in three firms report traffic adds a minimum of three days to the length of the average project. As a result, Sandherr said that three-quarters of contractors say congestion adds more than one percent to their total costs, and one in ten report that traffic adds eleven percent or more to their cost of doing business.
Given current construction spending levels, that amounts to $23 billion lost to traffic each year, Sandherr said, equal to Google's total revenue in 2009. "Try as they might, contractors can only do so much to avoid the added costs associated with traffic congestion," the association head added during remarks today at a Minneapolis-area construction equipment plant operated by CAT Global Paving.