Capitol Update 10/10/2022
Construction spending dips, but contractors remain optimistic
Nonresidential construction spending decreased 0.4% in August due to rising costs of both financing and delivering construction services, reflecting a persistent disparity between high contractor confidence and gloomy macroeconomic trends. Spending shrunk on a monthly basis in 10 0f 16 nonresidential subcategories in August, according to an Associated Builders and Contractors analysis of data published Monday by the U.S. Census Bureau. Highway and water supply spending both fell 1.2% on a monthly basis, while public safety spending dropped 1.3%. Lodging and sewage were the biggest gainers, growing 1.6% and 1.4%, respectively.
After a 0.6% drop in July, construction spending fell an additional 0.7% in August for the biggest month-to-month drop in 1½ years, according to the Commerce Department. Soaring mortgage rates were seen as a cause as investment in single-family home building fell sharply. Full Story: Reuters
Economists’ inflation theories differ, but all suggest inflation will decline soon, Federal Reserve Bank of Richmond President Thomas Barkin says. Barkin says he has no regrets about moving swiftly to bring down inflation, given how high it has remained. Full Story: MarketWatch (tiered subscription model)
Payroll employment increases by 263,000 in September; unemployment rate edges down to 3.5%
Total nonfarm payroll employment increased by 263,000 in September, and the unemployment rate edged down to 3.5 percent. Notable job gains occurred in leisure and hospitality and in health care.
The General Services Administration is seeking information about domestically sourced and manufactured “low-embodied-carbon” construction materials as the government prioritizes their use in federal procurement and US-funded projects. Materials may include concrete, steel, glass and asphalt as part of the Biden administration’s Federal Buy Clean Initiative. Full Story: The Hill
Nine in 10 multifamily developers are experiencing delays in projects, with various factors cited, according to a survey by the National Multifamily Housing Council. Meanwhile, 76% of respondents continue to see rising prices for materials, although lumber prices have eased. Full Story: Multifamily Dive
Residential construction wages eased to $29.13 an hour in July from $29.41 the previous month as non-residential construction wages held steady. Residential wages were up 3.4% from the previous year, but that figure represents a decline from average year-over-year growth rates as high as 7% in 2021, according to Nick Grandy, construction and real estate senior analyst with RSM US. Full Story: GlobeSt (free registration)
Certain climate provisions in the Inflation Reduction Act can’t be met unless the US doubles the pace of transmission construction, according to a report from engineering researchers led by Princeton University. “Failing to accelerate transmission expansion beyond the recent historical pace of about 1% per year” would eliminate over 80% of potential emissions reduction promised in the inflation act by 2030, the report states. Full Story: Engineering News-Record (tiered subscription model)
A new Build America Bureau initiative known as TIFIA 49 will allow transit and transit-oriented development projects that meet certain criteria to borrow up to 49% of qualified project costs. The Transportation Department hopes that expanding low-cost, flexible financing will help bring more projects to fruition without burdening taxpayers. Full Story: Roads & Bridges
A new rail yard, intermodal facility and warehouses will form part of BNSF Railway’s $1.5 billion plans for a Barstow International Gateway in California’s High Desert. Regulators still must clear the project, which would stretch over about 4,500 acres with the potential to transform how cargo moves out to the US from Southern California ports. Full Story: Daily Press (Victorville, Calif.)
A huge concrete and “soil nail” wall has been completed next to Anderson Dam in east Morgan Hill, Calif., marking the latest stage of progress in a $576 million seismic retrofit, the water district staff announced. The wall includes 244 rebar soil nails driven 120 feet deep and then reinforced with concrete to stabilize the slope. Full Story: San Jose Inside (Calif.)
With eight of nine gates now complete, Los Angeles International Airport opened the new concourse for its Terminal 3. The overall terminal project is now 18 months ahead of schedule with completion of the third phase of construction, officials say, and the final gate is expected to be finished early in 2023. Full Story: Los Angeles Daily News
Construction has wrapped up early for the last of six bridges for the Automated People Mover pedestrian bridge structure over World Way at Los Angeles International Airport. The project involved bolting together four steel trusses weighing more than 270,000 pounds. Full Story: Spectrum News