SBE News

Capitol Update – 11/08/2021

Easing port congestion was the focus of an executive order signed by Governor Gavin Newsom last week and a federal partnership announced this week.

The executive order signed by the Governor on October 20 directs state agencies to develop longer-term proposals that support port operations and goods movement for consideration in the January 10 Governor’s Budget. This week’s agreement with the U.S. Department of Transportation (USDOT) aims to speed up projects to modernize port operations and supply chain processes,

  • Executive Order
    • The executive order builds on earlier efforts this year by the Governor’s Office of Business and Economic Development (GO-Biz) to ease supply chain issues by engaging the diverse network of stakeholders along the supply chain to discuss key challenges and identify short-term and long-term solutions. These directives come amid global disruptions to the goods movement supply chain. Record demand for imported goods combined with capacity issues across the entire supply chain have slowed distribution at ports on the California coast. The executive order also directs state agencies to continue coordinating with the Biden-Harris Administration Supply Chain Disruptions Task Force to address state, national and global supply chain challenges. Lastly, under the order, state agencies are directed to identify state-owned properties and other locations that could be available to address short-term storage needs once goods are unloaded from ships; to identify priority freight routes to be considered for a temporary exemption to current gross vehicle limits to allow for trucks to carry additional goods; and to create workforce training and education programs. AB 639’s (Cervantes, 2020) implementation is also expedited through this executive order.
  • Partnership
    • A joint release from the Governor’s office and USDOT identifies projects that could receive support from the partnership agreement as including:
      • Port-specific upgrades;
      • Expanding capacity for freight rail;
      • Developing inland port facilities for increased warehouse storage;
      • Railyard and truck electrification;
      • Highway upgrades to improve truck travel times;
      • Grade-separated crossings to reduce the number of rail-street intersections and improve safety and efficiency;
      • Land ports of entry to expand trade capacity and cross-border commerce; and
      • Other projects identified by the California State Transportation Agency.

Railroad steps up efforts to ease West Coast port congestion, a move that could help get goods to construction sites faster

Union Pacific Railroad Co. has ramped up efforts to alleviate congestion at the Port of Long Beach near Los Angeles with new incentives for weekend container dropoffs and adding capacity as needed to support the West Coast port’s move to encourage shippers to move cargo via rail instead of truck. The railroad is offering a $60 refund for every container in-gated over the weekend until the end of the year, according to a statement last week. Union Pacific recently expanded its hours to align with the Long Beach port’s 24/7 schedule in an effort to ease congestion. Union Pacific also said it will add capacity “as needed” to support a joint initiative from the Port of Long Beach and Utah Inland Port Authority, encouraging shippers to send cargo destined for intermountain states to Salt Lake City by rail, according to an emailed statement from railroad spokesperson Kristen South. That capacity could be in the form of longer or new trains, South said.

 Payroll employment rises by 531,000 in October; unemployment rate edges down to 4.6%

Total nonfarm payroll employment rose by 531,000 in October, and the unemployment rate edged down to 4.6 percent. Job gains occurred in leisure and hospitality, in professional and business services, in manufacturing, and in transportation and warehousing. Public education lost jobs.

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The U.S. economy added 531,000 new jobs in October, according to the latest Bureau of Labor Statistics report, and the unemployment rate dropped to 4.6%. The Biden-Harris administration is getting Americans back to work at a historic pace, with 5.6 million jobs added since the President took office and an average of 620,000 jobs per month.

Construction spending down in Sept.

Economists had forecast increased construction spending for September, but the Commerce Department reported a decline of 0.5% from the previous month. The September total, however, was up 7.8% from a year before, although material shortages prevented a bigger gain. Full Story: Reuters

Construction starts expected to ease in 2022

Total construction starts will rise to $946 billion next year from this year’s $893 billion, slowing to a 6% increase after a 12% year-to-year gain in 2021, according to Richard Branch, chief economist at Dodge Construction Network. The residential sector leads the way this year with a projected 14% gain, but that’s expected to slow to 3% in 2022. Full Story: Engineering News-Record (tiered subscription model) 

Unemployment Insurance Claims

Initial claims within California rose 4.2% during the week of October 30, while claims in the rest of the country continued their longer-term decline, dropping 5.1%. The seasonally adjusted number of claims dropped 4.9% for the US as a whole. In all, California continued to perform below the rest of the US, with 25.9% of all initial claims processed during the week. This performance would indicate a continued slowing in California’s recovery pace compared to the rest of the nation as reflected in the recently released job and employment numbers for September. California claims remained at levels previously seen in July and August 2021, with essentially level numbers over the past 5 weeks. The US number was again the lowest since the beginning of the pandemic period and only 12% above the average in 2019. California was 54% above the 2019 average

Construction begins on 100 MW solar farm in Calif.

Construction is underway on the 100-megawatt Rabbitbrush Solar project in Kern County, Calif. The project, led by general contractor McCarthy Building, includes 50 megawatt-hours of battery storage capable of providing 2½ hours of power in a bid to improve grid reliability.

Full Story: The Construction Broadsheet

Construction begins on $3.4B Calif. airport project

An airport serving San Diego, Calif., has kicked off demolition and utility relocation activities for its $3.4 billion overhaul of Terminal 1. The project, which received environmental approval from the Federal Aviation Administration last month, is the biggest for the airport and will include improvements to the airfield.

Full Story: The San Diego Union-Tribune (tiered subscription model) 

Ruling clears way for tech campus in San Jose, Calif.

A disputed Brutalist bank building in downtown San Jose, Calif., which some had sought to preserve, can instead be demolished to make way for a planned tech campus, a Santa Clara County judge has ruled. The new CityView Plaza development planned by Jay Paul Co. will offer 3.6 million square feet of office space in three 19-story office towers as well as 24,000 square feet for retail, according to city documents.

Full Story: San Jose Mercury News (Calif.) (tiered subscription model)

Work to save sinking San Francisco tower shifts gears

Shimmick Construction had planned last week to complete installation of a permanent pile to halt the sinking of San Francisco’s Millennium Tower. But an equipment problem has forced the contractor to install a second outer casing for a separate pile.

Full Story: Engineering News-Record (tiered subscription model) 

NFL Chargers plan center in El Segundo, Calif.

The NFL’s Chargers are furthering their move to Los Angeles with plans for a training center and headquarters in El Segundo, Calif. Continental Development will build the $100 million complex on land it owns and rent it to the Chargers.

Full Story: Los Angeles Times (tiered subscription model)


Mark Smith
California Builders Alliance

5370 Elvas Avenue ǀ Sacramento, CA 95819
Cell: 916.335.5072