SBE News

Capitol Update 12/11/2023

Construction spending, jobs increase year over year in Oct.

Non-inflation-adjusted construction spending rose 11% year over year in October, according to the Census Bureau, and construction employment increased in 226 out of 358 metro between October 2022 and October 2023, according to the Bureau of Labor Statistics. “Commercial real estate activity continued to slow; the office segment remained weak and multifamily activity softened….Several [districts] noted that costs for construction inputs like steel and lumber had stabilized or even declined,” wrote the Federal Reserve in its latest “Beige Book.” Full Story: Construction Citizen  

Oct. construction spending up 0.6%

Seasonally adjusted construction spending picked up a bit between September and October, rising 0.6% to an annual rate of $2,027.1 billion and leaving the latest figure up 10.7% from a year before. For the first 10 months, the total came to $1,646 billion, marking a 5.6% gain from the year-earlier period. Full Story: American Bankers Association

Dodge: Oct. construction starts down 7%

Tight and costly credit appear to be taking a toll on construction as total starts fell 7% last month to a seasonally adjusted annual rate of $1.1 trillion, according to Dodge Construction Network. That included a 32% plunge in nonbuilding starts for the month, while the overall figure for the year through October was down 4% from the year-earlier period. Full Story: Dodge Data & Analytics

Major builders report sliding profits

Inflation figures prominently in late-year reports of falling profits for major public construction companies. Construction Dive rounds up results from Granite, Skanska, Fluor, WSP, Tutor Perini, AECOM and Jacobs. Full Story: Construction Dive  

DOT gives states flexibility on GHG reduction goals

The Department of Transportation, under the Federal Highway Administration, has established a greenhouse gas performance measure that gives state Departments of Transportation and Metropolitan Planning Organizations the flexibility to set their own targets for efforts to reduce emissions. “We don’t expect state DOTs and MPOs to solve a problem this large on their own, which is why this performance measure does not impose penalties for those who miss their targets,” said FHWA Administrator Shailen Bhatt. Full Story: Department of Transportation/Federal Highway Administration  

FHWA: Costs balloon for highway construction

Highway construction costs ballooned 53.8% from the fourth quarter of 2020 to the first quarter of this year, according to the Federal Highway Administration. A steady cost rise was noted over the first three months of this year, driven largely by construction component costs for concrete, grading, excavation and asphalt. Full Story: Transport Topics  

New home construction makes unexpected rise in Oct.

Residential starts rose 1.9% in October to an annualized rate of 1.37 million, the highest in three months, according to government data, while applications to build also rose to 1.49 million. Construction of single-family houses rose fractionally by 0.2% over the month, while issuance of permits to build residential space climbed to the highest level since May 2022. Full Story: BNN Bloomberg (Canada)  

Office construction forecast looks gloomy

With office vacancy at 18% nationwide, economists are predicting construction in the sector won’t return to pre-pandemic levels in the foreseeable future. Dodge Construction Network Chief Economist Richard Branch predicts the market will extend its decline in the new year, with starts down 6% to include a particularly sharp drop in speculative projects. Full Story: Construction Dive  

OSHA: Fall protection top concern for 13 years straight

OSHA has reported 7,271 violations of fall-protection rules for fiscal 2023, making fall protection the No. 1 safety issue for the 13th consecutive year. Rounding out the top five are hazard communication, ladder requirements, scaffolding requirements and design, maintenance and operation of powered industrial trucks. Full Story: Safety + Health  

DOE urges states update new build energy codes

If states had stronger energy standards for new buildings, thereby reducing energy consumption, carbon emissions would drop by nearly 2 billion metric tons and save ratepayers significant money, according to an Energy Department campaign. The department is offering states millions of dollars to upgrade codes, especially states such as Arizona which hasn’t updated its code in 14 years. Full Story: Scientific American  

AGC CEO wraps up career with Davis-Bacon challenge

One of the last things Associated General Contractors of America CEO Stephen Sandherr wants to accomplish before retirement is a successful legal challenge to the Biden administration’s expanded scope of Davis-Bacon pay standards on federal construction projects. “As an industry that largely pays above existing Davis-Bacon rates, our concerns are with the administration’s unconstitutional exercise of legislative power and not with the wage rate themselves,” Sandherr says. Full Story: International Construction  

More stakeholders sign pledge for equitable contracting

Following a recent ceremony in Los Angeles, the Equity in Infrastructure Project Pledge now has 55 signatories from public and private stakeholders in 17 states, Washington, D.C., and Puerto Rico. The pledge is part of an effort that Los Angeles County Supervisor Holly Mitchell describes as creating “more equitable contracting processes to allow communities to access public infrastructure dollars and to build wealth for those that have been systematically excluded–intentionally excluded.”

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

100% recycled pavement now possible

It has been a yearslong slog, but Green Asphalt has succeeded in producing a formula to create new asphalt from 100% reclaimed asphalt pavement. What’s more, the company says that any existing asphalt plant can be modified in about three weeks to produce 100% RAP. Full Story: For Construction Pros

What federal contractors should know about green materials

The recent financial backing to support implementation of low-carbon construction materials in projects for the General Services Administration should be seen as a “signal to industry” that the federal government is taking its green procurement initiative seriously, says Jordan Howard from the Associated General Contractors of America. However, while the government’s transparency in developing a waiver to mitigate supply chain concerns is helpful, many challenges persist, including the lack of centralized resources to make low-carbon calculations, says Melinda Tomaino from AGC. Full Story: SmartBrief/Infrastructure

Fed faces imminent decision on rate cut direction

Underlying inflation in the US remains at 3.5%, higher than the Federal Reserve’s 2% target, and officials are worried about a resurgence. However, rate cuts may come in just a few months, and confirmation of this will be given when the Fed meets Dec. 12-13, amid rising market expectations of several rate cuts next year. Full Story: Reuters  

AECOM exec describes “thrilling” infrastructure progress

“It’s a thrilling time to see creativity, technology, engineering and construction come together in this space,” Los Angeles AECOM executive Jill Kurth said. Kurth cited clean air initiatives by the ports of Los Angeles and Long Beach, as well as development of the LA Clippers’ Intuit Stadium, which Kurth calls “one of the most technically advanced stadiums in the world”. Full Story: Construction Dive  

White House targets $8.2B for high-speed rail projects

High-speed rail projects to link Northern and Southern California, Southern California to Las Vegas and Raleigh, N.C., to Richmond, Va., are among those set to get a slice of $8.2 billion from the Department of Transportation. The federal infrastructure law will help finance the projects. Full Story: Reuters  

$70M loan to boost water resilience in Calif. district

The San Bernardino Valley Municipal Water District’s struggle to deal with persistent drought in the San Bernardino, Calif., area will receive a federal assist in the form of a $70 million low-interest loan under the Water Infrastructure Finance and Innovation Act. The money will be used for a program to raise the capacity of existing groundwater basins. Full Story: The Construction Broadsheet  

L.A. officials clear way for N. Hollywood project

Plans for a new seven-story mixed-use development in North Hollywood, Calif., are advancing with approval by the Los Angeles City Planning Commission. Clearance for the N. Vineland project proposed by Elevado Group comes on the heels of another proposed mixed-use project in North Hollywood and a 147-unit complex in Van Nuys. Full Story: Urbanize Media/Los Angeles