Traffic Congestion Costs Contractors Money

August 16, 2010
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Seems you can’t drive anywhere these days without having to run a gamut of construction cones and lane closures. It’s construction season, and for people who spend a lot of time on the road, as most HVACR contractors do, it has to be factored into everything from overhead to job scheduling. But the causes of congestion can be more pervasive than seasonal road work.

Traffic congestion and the delays it causes are costing the nation’s construction firms an estimated $23 billion each year, according to an analysis released recently by the Associated General Contractors of America (AGC). There is no relief from traffic in sight, association officials warned; Congress is months late in passing six-year federal transportation legislation.

“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 CEO. “Given the hardships they are facing, the last thing contractors need is to burn time, fuel, and money stuck in traffic.”

The analysis was based on responses from nearly 1,200 construction firms the association surveyed in late April and May. He noted that 93 percent of firms reported that traffic and congestion were affecting their operations. Nearly two-thirds of the firms said they 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 said traffic adds a minimum of three days to the length of the average project. As a result, Sandherr said three-quarters of contractors reported that congestion adds more than 1 percent to their total costs; one in 10 report that traffic adds 11 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. “Try as they might, contractors can only do so much to avoid the added costs associated with traffic congestion.”

The legislation would set national surface transportation policy and funding levels over the next six years. According to the AGC, it is crucial for allowing states to plan complex, long-term highway and transit projects designed to cut congestion.

Sandherr said the solution to these costly traffic woes was for Congress to pass surface transportation legislation. The program relies on self-funding user fees, he said, so Washington officials could cut traffic and boost economic activity without adding to the deficit.

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Publication date: 08/16/2010

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