I’m not going to get into the political talk about the government shutdown (you can visit these guys for that), however, I did want to post one way the federal government shutdown will affect the business community.
Each month, businesses and economists digest a regular landslide of data in order to evaluate overall economic conditions. Well, a lot of that data comes from (currently furloughed) government statisticians. One of the more important data points is the government’s monthly employment report, which is usually released the first Friday of each month. The Bureau of Labor Statistics is already saying this will be delayed.
About an hour ago, I received the Associated General Contractors of America’s monthly construction spending e-mail for August. I’ll paste it below. Bottom line: It has no information and the association feels the government shutdown could have a negative effect on construction spending this month.
CONSTRUCTION SPENDING IN AUGUST IS… UNKNOWN BECAUSE OF THE FEDERAL GOVERNMENT SHUTDOWN AS INDUSTRY’S RECOVERY IS THREATENED
Total construction spending hit an unknown level in August because the Census Bureau was unable to release new data as a result of the federal government shutdown according to the Associated General Contractors of America. Association officials cautioned that the impacts of the shutdown will go beyond data as solicitations for many new construction projects come to a halt.
“It is hard to get a sense of where the industry is heading when basic construction spending data isn’t available,” said Ken Simonson, the association’s chief economist. “Unfortunately, the lack of federal spending data likely foreshadows a decline in federal construction spending until the government reopens.”
Association officials urged members of Congress to quickly resolve the political impasse that resulted in a federal shutdown starting today. They warned that solicitations for new federal construction projects will be delayed until the federal government reopens. In addition, other federal construction projects may be delayed as many federal supervisors will not be available to answer questions, approve change orders.
“Depending on how long the government is closed, construction workers are likely to miss out on new job opportunities,” said Stephen E. Sandherr, the association’s chief executive officer. “This shutdown poses a real risk of undermining the industry’s long-awaited recovery.”