Capitol Update 8/22/2022
Women Are Smashing the Construction Industry’s Concrete Ceiling as Labor Shortages Leave a Void
Andi Dirkschneider negotiates multimillion-dollar land purchase loans for her family’s homebuilding business. Sellers sometimes call her “honey” and ask to speak to the man in charge. “I tell them, ‘I am the man in charge,’ ” says Dirkschneider, 32, who’s president of Brookline Homes in Charlotte. “To have a young, blond girl doing this throws everyone for a loop,” she says. “It gets to you, but you can’t let it.” Dirkschneider and thousands of women like her are smashing through a career ceiling. This one isn’t glass, though—it’s more like a slab of steel-reinforced concrete. Construction has long been a man’s world, from blue-collar trades such as masonry and carpentry to the executive suites of developers and builders. Now an accelerated wave of baby-boomer retirements has aggravated the industry’s chronic labor shortages. Total job openings in construction hit 440,000 in April, the highest in Bureau of Labor Statistics records going back to 2001.
Inflation Reduction Act gets Biden’s signature
President Joe Biden has signed the Inflation Reduction Act into law, capping off more than a year of discussions about climate, spending and tax priorities. The law is scaled back significantly from the Build Back Better proposal but contains $437 billion in spending, offset by revenue expected from enhanced IRS enforcement, a minimum corporate tax and other provisions. Full Story: CNBC, CBS News
What’s next for the Inflation Reduction Act?
Now that the Inflation Reduction Act has been signed, the Environmental Protection Agency, IRS, Energy Department and other federal agencies will begin work on new rules and programs to implement the legislation. Federal agencies will likely try to get the bulk of the rules passed before the next presidential election, but the process will take time and may be subject to legal challenges. Permitting changes are also needed to ensure wind, solar and other renewable energy developers can take advantage of the law’s tax credits, said Heather Zichal of the American Clean Power Association. Full Story: Bloomberg Law Financial Times (subscription required)
Kaiser Permanente to spend $1.7B on Calif. expansions
Health care provider Kaiser Permanente has shared plans for a $1.7 billion expansion across four projects in Riverside County, Calif. The projects involve expansions at hospitals in Riverside and Moreno Valley, a new medical office building in Murrieta and a new medical office in Wildomar. Full Story: The Press-Enterprise (Riverside, Calif.) (tiered subscription model)
Dodge: Total construction starts surge 48% in July
Total construction starts increased 48% in July to a seasonally adjusted annual rate of $1.36 trillion despite speculation of a recession, according to Dodge Data & Analytics. The increase was largely driven by the 79% jump in nonresidential building starts and the 120% increase in nonbuilding starts, according to the report. That significant jump in construction activity “is another indicator that the U.S. is not currently in a recession,” said Richard Branch, chief economist at Dodge. However, Branch warned continued interest rate hikes could lead to a “slowdown in construction starts by year-end.”
Mixed data released on housing starts, production
Census Bureau data shows housing starts fell 9.6% to a seasonally adjusted annual rate of 1.446 million units in July, the lowest figure since February 2021, with single-family units taking the deepest fall. Meanwhile, manufacturing output climbed 0.7% for the month after a 0.4% drop in June, according to the Federal Reserve. Full Story: Reuters
US Q2 costs for nonresidential construction rose 3.2%
Nonresidential construction costs rose 3.2% in major US markets in the second quarter, rounding out a 13.1% gain over the preceding 12 months, according to a report by Mortenson. The quarterly gains, however, varied among regions, with costs up 2.2% in Denver, 4% in Chicago and 2.9% in Seattle. Full Story: Mile High CRE
JLL reports record industrial construction in Q2
The second quarter saw a record 100.9 million square feet of new industrial space delivered, according to JLL. The firm also predicts the booming market will continue, with a record 586.7 million square feet reported in the pipeline for the quarter. Full Story: The Construction Broadsheet
What a recession would look like for construction
Preserve cash, build backlog and target federal contracts in case a recession sinks the U.S. economy.
That’s the winning game plan for construction pros during these uncertain economic times, sources told Construction Dive.
Whether a recession is here now or is waiting in the wings, industry experts suggested now is the time for construction companies to start shoring up their businesses, just in case. Here are some of their top tips for getting recession ready:
Nev. schedules infrastructure conference
Federal infrastructure investment destined for Nevada will be the subject of the state’s first infrastructure conference next month, Gov. Steve Sisolak announced. The conference in Las Vegas will bring together partners and stakeholders, as well as state and federal agencies. Full Story: KSNV-TV (Las Vegas)