August 4, 2020
Sixteen states announced project delays or cancellations worth approximately $5 billion, while another 20 local governments and authorities have scratched or put off projects worth another $4.54 billion, the report asserts. The 16 states ARTBA highlighted as having delays or cancellations include: Florida, Georgia, Hawaii, Kentucky, Massachusetts, Mississippi, Missouri, Nevada, New Mexico, North Carolina, Ohio, Pennsylvania, Vermont, Washington, West Virginia, and Wyoming.
Transportation authorities and local governments have projected declining revenues in at least 44 states. While that doesn’t mean transportation programs will necessarily feel the same percentage impact of those declines, it does point to increased pressure on transportation-related revenue sources, as well as state and local budgets, according to the report.
The report underlines an important area in which the lagging impacts of COVID-19 are just now starting to emerge in construction’s numbers. Construction Dive reported on July 30 that contractors are increasingly worried about the potential of a sagging economy to shelve new projects. A combined 75% of Construction Dive readers who responded to their Friday Feedback survey now expect the impacts of COVID-19 to last another year or more, with 19% anticipating disruptions for at least another 18 months. Just over 12% of readers expect the crisis to continue for another two years or longer.
According to the article, overall heavy and civil engineering construction employment total fell 10% in April, according to AGC chief economist Ken Simonson, slightly less than the 14% drop for all of construction. But while total construction employment rebounded 8% in May and June, heavy and civil employment increased just 3% in May before dropping 1% in June.
Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at Richard.Higgins@MCC-CPAs.com. I can be reached at Marty.McCarthy@MCC-CPAs.com. As always, we are happy to help.
Stay safe,
Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company
Source: $9.6B Worth of Infrastructure Projects Delayed or Canceled During COVID-19. Joe Bousquin. Construction Dive. August 4, 2020.
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
