SBE News

Capitol Update 5/31/2022

Economist: Economy transitioning to stability

The economy is shifting from high growth to “stable and resilient” growth that benefits families, said Brian Deese, director of the National Economic Council. “There’s no doubt we face serious global challenges right now, inflation first and foremost among them, and it’s hitting families hard, but there’s also no doubt that the United States is in a better position than any other major country around the world to address inflation,” Deese said. Full Story: MarketWatch (tiered subscription model)

Construction starts up 3% in April

The nonresidential category led the way with a 6% gain as total construction starts rose a seasonally adjusted 3% last month, according to Dodge Construction Network. Nonbuilding starts were down 4%, but residential was up by the same percentage as “the construction sector is seemingly shrugging off the fear of higher interest rates and a potential recession,” said Richard Branch, chief economist for Dodge Construction Network. Full Story: Dodge Data & Analytics

White House: $110B in infrastructure funding delivered

The White House has made $110 billion in funding available to states in the six months since the federal infrastructure bill became law, and the support is benefiting more than 4,300 projects, the White House said Monday, the first day of Infrastructure Week. “We’re hitting the ground running on the projects that are shovel-ready,” said White House Infrastructure Implementation Coordinator Mitch Landrieu. Full Story: Reuters

April jobless rates down in 13 states; payroll jobs up in 11 states

In April, unemployment rates were lower in 13 states and the District of Columbia and stable in 37 states. Nonfarm payroll employment increased in 11 states and was essentially unchanged in 39 states and the District.

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California Employment Report for April 2022

The Center for Jobs and the Economy has released our initial analysis of the April Employment Report from the California Employment Development Department. For additional information and data about the California economy visit

The April job and employment numbers continued to be positive, with employment showing strong gains comparable to the prior month but nonfarm jobs slowing.  Nonfarm jobs (seasonally adjusted) are now only 1.4% below the pre-pandemic peak high in February 2020 compared to the US at 0.8% below.  Employment, however, remains further behind at 2.1% below the prior peak, while the US is 0.5% below.

US Wealth Gains Now In Reverse

Bloomberg reported, “Americans’ collective net worth had been climbing at a dizzying rate for the past two years, even as families and businesses contended with the ravages of Covid-19. Households piled up an extra $38.5 trillion from early 2020 to the end of last year, bringing their collective net worth to a record $142 trillion, the Federal Reserve estimates.” Now, however, the “world’s richest nation is waking up to an unpleasant and unfamiliar sensation: It’s getting poorer.”

Survey: 57% Of Small Businesses Expect Economy To Worsen

The Wall Street Journal reported that small businesses are losing confidence in the economy. A survey of more than 600 small businesses conducted in May for The Wall Street Journal by Vistage Worldwide Inc. found that 57% of small-business owners expect economic conditions to worsen over the next year. That is an increase from 42%.

WPost Analysis: Rising Gas Prices Create Challenges For Economy

The Washington Post reported, “Gas prices have emerged as a particular worry amid other troubling signs about the U.S. economy. … The price of fuel keeps passing earlier milestones, now averaging more than $4.59 per gallon nationwide. That is 50 percent higher than gas was at this time last year, according to AAA.” The Post explained, “While the war in Ukraine is playing a major role…it is not the only challenge. The plunge in fuel demand during the pandemic moved producers to cut back on their investments in drilling and refining capacity.” Now, the oil and gas sector “finds itself ill equipped to meet…demand,” and the federal government “has exhausted most of the limited tools it has to confront price spikes.” Plus, as gas prices “force Americans to change their spending habits, one thing Americans aren’t doing is driving significantly less. All that driving in this moment of low fuel supply is pushing prices up further.”

Global Financial Leaders Warn Of Economic Dangers Amid Multiple Crises

The Washington Post reported at a conference of finance ministers and central bankers, the “financial leaders of the world’s most powerful countries warned this week of the potential for a global economic slowdown, as the threats caused by Russia’s invasion of Ukraine continued to multiply.” The Post explained, “Globally, the war is sending energy and food prices soaring. In the United States, Britain and Europe, central banks determined to curb inflation are moving to hike interest rates, which risks pushing nations into recession. The developing world faces an emerging debt crisis on top of a growing hunger problem sparked by the war.” Bank of France Governor Francois Villeroy de Galhau is quoted as saying, “If I had to sum it up: more uncertainty, more inflation, less growth.”

AGC: Employment up, but unfilled openings persist

Construction job openings remain at a record high even as employment in the industry across 32 states topped prepandemic levels last month, according to an analysis of employment data by the Associated General Contractors of America. “Construction employment gains have stalled in many states in recent months as the pool of available workers has dried up,” making it difficult to meet demand for private and infrastructure projects, says AGC Chief Economist Ken Simonson. Full Story: Pit & Quarry

Architectural billings growth eases a bit in April

Architectural billings continued to increase last month but at a slower pace than in March, according to the latest index from the American Institute of Architects. April’s reading was 56.5, down from 58 in March, with AIA Chief Economist Kermit Baker noting that “billings for reconstruction projects exceeded those for new construction for the first time in the last two decades.” Full Story: Architectural Record

Dodge: Construction starts jump, pipeline strong

U.S. construction starts should continue to grow for the rest of the year, despite economic and geopolitical headwinds, according to a Dodge Data & Analytics report.

Most of that positivity stems from the amount of projects sitting in backlog, or projects that are planned but not yet begun, said Dodge Chief Economist Richard Branch during a mid-year construction outlook webinar last week. 

He added it’s reassuring that the number of projects waiting to break ground is growing, even in the face of energy and materials price hikes and the war in Ukraine. 

“We feel reasonably positive about the outlook for construction starts in 2022,” said Branch during the webinar. “Over the past year, we’ve seen volatility but an upward rising trend here in the Dodge Momentum Index,” which tracks the dollar value of construction projects when they enter the earliest stages of planning, Branch said.

Branch did have a few caveats, and said his forecast includes three major assumptions:

  • That each subsequent wave of the COVID-19 pandemic impacts the economy less.
  • That the war stays within Ukraine’s borders and significantly abates by next year.
  • That the Federal Reserve can raise interest rates to combat inflation without pushing the U.S. economy into recession.

Infrastructure act will draw workers to trades, but training is key: Walsh

The $1.2 trillion Infrastructure Investment and Jobs Act will spur good-paying construction jobs and draw more workers to the industry, said Labor Secretary Marty Walsh at a Washington Post-sponsored online event on Thursday. But to capitalize on the opportunity, further workforce development is needed to bring people into the trades.

  • Walsh said he doesn’t expect the much-decried construction labor shortage to impede IIJA rollout. “[The infrastructure act] will create millions of new jobs all across America on the construction side but also long-term permanent jobs as well,” Walsh said. “I don’t think we’ll have trouble finding workers for these particular projects. I think these projects will create jobs, good middle class jobs, good-paying jobs.”
  • Walsh called for new pathways to bring in workers who have historically been shut out of the field, including people of color and women. Maryland Gov. Larry Hogan, who also spoke at the event, agreed about the need to build a pipeline of workers and said training initiatives should begin in high school and include private sector partners.

Coordinators needed to chase federal infrastructure cash

The amount of US government funding available for projects argues for cities and states to name an infrastructure coordinator, experts say. According to the National Governors Association and experts, 25 states and an undetermined number of cities have named coordinators to chase money one analyst calls “on par with New Deal era levels of funding.” Full Story: Smart Cities Dive 

White House vows to speed up environmental review for federal projects

Biden administration officials said in a press call Tuesday they will tweak the federal review process for environmental permits in an effort to speed up infrastructure construction. As part of the initiative, the White House released a permitting action plan Wednesday that lays out priorities and directives but does not carry the weight of an executive order. The goal of the new plan is to make permitting faster and easier without compromising environmental standards, officials said. Contractors have long decried the lengthy and complicated process, which can hold up projects. The federal government will spend less than 10% of the $1.2 trillion in the Infrastructure Investment and Jobs Act on items like research and data collection, according to the White House, and the rest of the money will flow to states, cities, tribes and companies. As IIJA funds start to roll out, the Biden administration also said the new plan will help these non-federal entities build quickly. 

Fed’s Powell: Rates will rise until inflation falls

Federal Reserve Chair Jerome Powell said he is committed to taking interest rates as high as necessary to get inflation headed in the direction of the central bank’s 2% target. “If that involves moving past broadly understood levels of neutral we won’t hesitate to do that,” he said. Full Story: CNBC (5/17),  Financial Times (subscription required) (5/17),  The Wall Street Journal

Fed rate setters back 50-basis-point June, July hikes

Minutes from the Federal Reserve’s May policy meeting show strong support for 50-basis-point interest-rate increases in June and July and raise the possibility of moving beyond neutral monetary policy to a restrictive one. Most meeting participants agree additional 50-basis-point increases likely are appropriate, according to the minutes. Full Story: Reuters  Financial Times (subscription required)The Wall Street Journal

As destructive wildfires increase, new model can calculate property risk

A New York City-based research nonprofit has developed a tool to quantify the risk residential properties face from wildfires, such as those currently ravaging the West Coast. The First Street Foundation Wildfire Model predicts that 71.8 million homes currently have some level of risk and due to climate change, that number will increase to 79.8 million homes by 2050 — an uptick of 11.1%. The organization also has a tool to assess flood risk. First Street’s free online model supports residential homes and apartment buildings. When attempting to search an address that is mixed-use or commercial, the model provides a message identifying the property as such and will not currently identify a risk level. 

Drones expedite Calif. Topgolf project

McCarthy used drones to calculate elevation and earth levels for its $36 million Topgolf project in El Segundo, Calif., achieving in 24 hours what would have taken much longer with a surveying crew. It took 30 minutes to map out the site and about a day to judge the amount of earth-moving required after the complexities of securing federal clearance for drone operations were overcome, said Kevin Williams, a manager of virtual design and construction at McCarthy. Full Story: Construction Dive

“Buy America” rule under IIJA waived through Nov. 10

A waiver effective until Nov. 10 is in place for the “made in America” provision for some construction materials under the Infrastructure Investment and Jobs Act, the Transportation Department announced. “DOT is establishing this transitional waiver to prepare for compliance with the new Made in America standards for construction materials,” the department says, calling on partners in the interim to develop compliance procedures. Full Story: Transport Topics

Groups urge US to develop transportation job strategy

Government groups at the state and local level are urging the US to develop a national workforce strategy for transportation jobs as federal infrastructure funds trickle down. A group led by the National League of Cities, US Conference of Mayors and National Association of Counties said “there is a pressing need to fill positions within the sectors that will build and maintain our nation’s roads, bridges, water systems and broadband networks,” but added that “hiring for infrastructure jobs is a significant challenge.” Full Story: Transport Topics 

$4.3B U. of Calif. hospital plan gets go-ahead

University of California officials have approved a University of California at San Francisco plan to build a new hospital to address capacity problems that result in some patients being turned away. Construction on the $4.3 billion is expected to begin next year and create 1,050 to 1,200 jobs during its expected seven-year buildout. Full Story: San Francisco Chronicle (tiered subscription model)

Summer start seen for $93M Calif. bridge replacement

Construction is expected to kick off this summer on the $93 million Mosquito Bridge replacement in El Dorado County, Calif., according to Rafael Martinez, director of the county Department of Transportation. Shimmick will conduct the work, which is expected to take about three years. Full Story: Daily Republic (Fairfield, Calif.) 

Construction begins on I-80 lane additions in Calif.

Construction is underway on a $243 million project adding toll express lanes on Interstate 80 from Fairfield, Calif., to Vacaville, Calif. The work is expected to be completed in 2025.

Full Story: KPIX-TV (San Francisco) 

$1B expansion planned for Nev. airport

The Reno-Tahoe Airport Authority is planning a roughly $1 billion expansion over six to eight years at Reno-Tahoe International Airport in Nevada. Construction is expected to begin in September, starting with the ticketing hall and eventually concourses and the road in front of the airport. Full Story: Nevada Public Radio

$123M sewage rerouting approved in Long Beach, Calif.

Long Beach, Calif.’s existing wastewater treatment plant would be converted into a pump station as part of a plan to route city sewage out of Reynolds Channel. The City Council has approved a $123 million bond that would be reimbursed with federal and state funds for the project, which includes a 3.5-mile pipeline under the channel. Full Story: Newsday (Long Island, N.Y.) (tiered subscription model) 

Work begins on HQ complex for L.A. Chargers

Work is underway on a new team headquarters for the NFL’s Los Angeles Chargers in El Segundo, Calif. A total of $276 million of construction and permanent financing has been raised for the facility, which will include three football fields and a main building housing a hospitality club and e-sports gaming studio. Full Story: The Associated Press

Weitz named GC for $500M housing project in Calif.

Replay Destinations has selected The Weitz Co. as the general contractor for the first phase of the Mill District neighborhood in downtown Healdsburg, Calif. Crews are currently moving trailers and equipment on-site for the $500 million project, which will add 43 residences comprising five penthouses, four garden homes and 34 apartments. Full Story: Real Estate Weekly (New York City) 

L.A. County sewer system project gets $441M federal boost

A $441 million loan under the federal Water Infrastructure Finance and Innovation Act will help Los Angeles County upgrade its sewer system, which is currently seen as ill-equipped to handle natural disasters. The Environmental Protection Agency estimates the work, which will take place over the next five years, will create 2,880 local jobs. Full Story: Spectrum News

USACE finishing early on Calif. dam reinforcement

Work to address safety concerns at the 70-year-old earthen dam at California’s Isabella Lake is expected be completed this year, according to the US Army Corps of Engineers. The $284 million project in Kern County began in 2006 and had been expected to take as long as 30 years. Full Story: The Bakersfield Californian