It appears that the sequester cuts are going to impact the construction industry pretty dramatically. There will be mandatory cuts to defense and non-defense categories that could add up to more than $4 billion dollars.

According to the Engineering News Records article, Sequester Construction Spending Cuts Total More Than $4 Billion, the programs suffering the largest cutbacks will be military construction, the Department of Energy’s environmental cleanup programs at former nuclear-weapons plants and the Environmental Protection Agency water infrastructure projects.

Not surprisingly, this means that projects could be deferred or canceled. Worse yet, agencies may have to reduce the scope of approved projects or terminate them for convenience if they are not affordable during fiscal year 2013.

The news is not all gloomy though. There are some projects that are exempt from the cuts. For example, most federal-aid highway funding, airport improvement funded with grants, and all Department of Veterans Affairs are exempt.

The next fiscal deadline is March 27, when a government-wide stopgap spending measure expires. Only time will tell whether an agreement is reached or if the government is shut down.