Contractors are not hopeful for increased transportation work in 2012, according to a report issued Monday by the Associated General Contractors of America and Computer Guidance Corp.

The firms surveyed reported they were anticipating increased demand for construction within the energy sector and for hospitals and university facilities. Contractors in the public sector had no such optimism, however, forecasting a decrease in the construction of highways, public buildings, and K-12 schools.

AGC's projections stemmed from survey results gathered from more than 1,300 construction firms across 50 states, the District of Columbia, and Puerto Rico.

Roughly 40% of respondents expect the highway market to continue to drop this year, while only 19% expect it to grow. Stephen Sandherr, AGC's CEO, said these expectations could change with the passage of a surface transportation reauthorization bill, which saw signs of movement this week in both the House (see related story) and Senate (see related story). A multiyear Federal Aviation Administration reauthorization bill is also moving along in the legislative process (see related story).

"I'm pleased to see a breakthrough on negotiations between the House and Senate on an aviation bill," he said during a teleconference with reporters. "Perhaps that bodes well for other transportation action, maybe to shake loose some projects."

Though the overall picture for construction in 2012 is mixed, AGC executives are happy to see that fewer firms anticipate having to lay off workers this year. Roughly 9% of construction companies surveyed said they would be making layoffs this year versus the 37% reported last year and the 55% reported in 2010.

"There are definitely some conflicting trends when it comes to contractors' expectations for 2012," Ken Simonson, AGC's chief economist, said in a statement. "The construction industry will improve this year, but we are going to have to wait until at least 2013 before contractors experience the kind of recovery this industry needs."

"The 2012 Construction Hiring and Business Outlook" is available from AGC at