ABC-SEMI Issue 4, 2020

10 Associated Builders and Contractors, Inc. CONSTRUCTION FORECAST Economists projected payroll job count is expected to fall by nearly 1.2 million in the second quarter of 2020. For comparison, Michigan lost about 140,000 jobs in the first quarter of 2009, during the depths of the Great Recession. This leads to projecting combined General Fund and School Aid Fund revenues to be $2.6 billion lower in the fiscal year 2020, $3.2 billion lower in fiscal 2021, and $2.2 billion lower in fiscal 2022. Though the Construction Industry is showing no signs of slowing, the state’s unemployment rate is forecasted to jump to 23% in the second quarter, easily the highest level since the state-level data series began in 1976. Michigan’s unemployment rate is then expected to fall to 9% in the third quarter of 2020 and decline more slowly after that to between 5% and 6% by the end of the forecast horizon in the fourth quarter of 2022. And although Michigan’s unemployment rate is forecasted to be larger than the nation, due to the more cyclical nature of the state’s economy, the slowing of U.S. light-vehicle sales and the greater prevalence of COVID-19 in Michigan, it is still expected to see modest growth on the construction side. “Our economy was growing significantly prior to the COVID-19 outbreak,” stated Ledbetter. “I believe that once the Presidential election is over, we will see all the indicators for a recovering economy across the state and nation emerge. And our ABC contractors will be poised to take full advantage of that when that day comes.” “I believe that once the Presidential election is over, we will see all the indicators for a recovering economy across the state and nation emerge.”