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U.S. Construction CFOs Predict Improved Activity in Infrastructure-Related Projects

CFOs recently polled by Ernst & Young LLP reported that construction and engineering opportunities in commercial real estate declined significantly in 2009 and that further declines are expected over the next 12 to 18 months as the sector deals with a lack of financing, an oversupply of product, rising unemployment, and lackluster economic fundamentals. However, chief financial officers of some of the largest construction and engineering contractors in the country do see improving activity over the next year or so in infrastructure-related sectors such as transportation, power and renewable energy, water, sewer, waste and environmental/hazardous waste construction, healthcare and education.

A little more than half of those surveyed reported they have already been awarded federal contracts funded using government stimulus money from the American Recovery and Reinvestment Act. Among geographic regions, Asia, particularly China, and Australia are perceived to hold the best opportunities for contractors to increase their business in 2010. Respondents see some potential in the U.S., but less in Africa, Europe, and Latin America.

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