Capitol Update – 12/06/2021
Payroll employment rises by 210,000 in November; unemployment rate declines to 4.2%
Total nonfarm payroll employment rose by 210,000 in November, and the unemployment rate fell by 0.4 percentage point to 4.2 percent. Job gains occurred in professional and business services, transportation and warehousing, construction, and manufacturing. Retail trade lost jobs.
Is the infrastructure bill better than 2009 stimulus?
Contractors are likely to see more immediate benefit from the recently signed federal infrastructure package than they did from a similar rescue measure passed in 2009, according to Sean Eastman, equity research analyst at Cleveland-based KeyBanc Capital Markets. “This package feels more capital project-oriented, and I feel like the state of state and local budgets now versus the 2009 era is quite a lot different,” with less impetus to channel funds to other purposes, Eastman says. Full Story: Construction Dive
When will contractors see a boost of infrastructure dollars?
When the American Recovery and Reinvestment Act of 2009 passed, the public construction firms eagerly anticipated a windfall of funding and new projects. But then localities shifted the projects to other priorities. The Recovery Act “really amounted to a pretty anticlimactic impact for the large, publicly traded companies,” said Sean Eastman, equity research analyst at Cleveland-based corporate and investment bank KeyBanc Capital Markets. But Eastman thinks the recently signed Infrastructure Investment and Jobs Act should be different. “This package feels more capital project-oriented and I feel like the state of state and local budgets now versus the 2009 era is quite a lot different,” Eastman said. “So maybe there’ll be less susceptibility to states allocating funds elsewhere, other than infrastructure.” Adam Thalhimer, director of research at Richmond, Virginia-based investment advisor Thompson Davis & Co., was equally as effusive, calling the infrastructure package “a normal highway bill on steroids.” – Construction Dive
Infrastructure law comes with economic challenges
Contractors are expected to face an even tighter labor market, and wages are likely to rise as construction projects funded by the $1 trillion infrastructure package get underway. That’s just one of the challenges facing the industry, as illustrated in graphs reflecting rising material prices, freight costs, project spending and bid costs versus input prices. Full Story: Construction Dive
Which contractors are ready for the infrastructure boom?
A wide swath of construction companies is expected to benefit from the recently signed federal infrastructure legislation. But some are better positioned than others, and Leslie Shaver examines a few that analysts think are poised to realize some of the biggest gains, including AECOM, Jacobs and Fluor. Full Story: Construction Dive
Minimum wage on federal contracts to increase in Jan.
The minimum wage for workers on federal contracts will be increased to $15 beginning Jan. 30, 2022. The new minimum will not apply to existing federal agreements, which can be 3-5 years long. Full Story: CNBC
Existing-home sales in Oct.: +0.8%
Sales of existing homes rose 0.8% in October compared with the previous month, according to data from the National Association of Realtors. The latest figure sets the market on course to achieve the highest volume of sales in 15 years. Full Story: The Wall Street Journal
Google pursues multidecade deal for Calif. project
Google has requested a 30-year agreement to build a total of 7,000 homes and 3 million square feet of office space in Mountain View, Calif. The eight-phase North Bayshore Master Plan will ultimately span 127 acres and include 31 acres of parks and 1,400 affordable housing units. Full Story: Mountain View Voice (Palo Alto, Calif.)
US increases softwood lumber tariffs to about 18%
The US will double the duties on Canadian softwood lumber to roughly 18% from the current 9% anti-dumping and countervailing duties imposed during the Trump administration. “A doubling of this tariff will only prolong the extreme price increases that have hit lumber repeatedly over the past 18 months,” said Ken Simonson, chief economist for the Associated General Contractors of America.Full Story: Engineering News-Record (tiered subscription model)
Governors explore rules around infrastructure funding
Governors from across the country are gathering for a conference in Annapolis, Md., to explore the rules for using funds from the recently passed federal infrastructure package. The Federal Highway Administration, meanwhile, has set up a website that it says will serve as a “one-stop shop” for related information sought by state and local agencies and others.Full Story: Engineering News-Record (tiered subscription model)
Federal contractor minimum wage to rise to $15 an hour
The U.S. Department of Labor announced Monday a final rule implementing President Joe Biden’s executive order raising the federal contractor minimum wage from $10.95 to $15 an hour. The final rule retains the Jan. 30, 2022, deadline by which agencies must incorporate the new rate into new contract solicitations. The requirements apply to federal contractors that perform work in all 50 U.S. states as well as U.S. territories, Jessica Looman, acting administrator of DOL’s Wage and Hour Division, said during a media briefing Monday. It also ends the tip credit as well as the subminimum wage provision for certain employees with disabilities. The new rate does not apply to eligible federal contracts entered into before Jan. 30, 2022, but will apply to extensions of such contracts finalized after the deadline. Beginning Jan. 1, 2023, the minimum wage will increase annually by an amount determined by the Secretary of Labor. Looman said the agency would soon provide guidance and educational outreach to contractors on how to implement the rule.
Construction firms search for legal loopholes to federal contractor vaccine mandate
Some companies may explore spinning off separate LLCs, but the chances of success are low, according to guidance from attorneys and the government. Although OSHA has suspended the implementation of its emergency temporary standard requiring vaccines for employees at businesses with 100 or more employees, construction companies that do work for the federal government are facing another set of vaccination requirements. These firms have until Jan 4. to get workers vaccinated. Conservative-led states have challenged this federal contractor mandate, but they face an uphill battle, according to Bloomberg. Already facing severe challenges in staffing jobs, there is a fear that these federal contractor vaccine requirements could further thin their ranks and potentially force some firms to pass on work.
$300M Calif. oil pipeline plan advances
Houston-based Plains All American Pipeline is advancing its $300 million plan to replace a 123-mile-long oil pipeline in Southern California that caused a massive coastal oil spill in 2015. Regulators will consider the contested project in the new year even as California plans for a future free of fossil fuels. Full Story: The Associated Press
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