Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
The heat is on as the clock ticks down on a fall recess of the Congress, and lawmakers are scrambling to get a highway bill passed before the August recess. Kicking off reauthorization of the FAST Act, the Senate Environment and Public Works Committee is working to consider a five-year highway bill before authorization expires in October of 2020. Republican Committee Chair John Barasso of Wyoming is telling his colleagues that the importance of a highway bill even without a funding mechanism - be it taxes, tolls or fees - is extremely important in an effort to avoid potential pitfalls that will come without approval. On the flip side, Building America’s Future President Marcia Hale is predicting that Congress will fail to reauthorize the FAST Act before the fall 2020 deadline.
A surprise to most everyone in construction, input prices have fallen for the first time in three years in year-over-year basis. Associated Builders and Contractors (ABC) analysis of Labor Department statistics reveals a 1.3% drop in prices on a monthly and yearly basis for June, something that has not occurred in three years. Nonresidential construction prices were down by 1.4%; and in the subcategories: softwood lumber was off 23.1%, crude petroleum down 22.2% and natural gas was off by 22.3%. ABC Chief Economist Anirban Basu says the low inflation is a conundrum as the global economy continues to stumble and contractors need to worry less about materials prices.
The National Association of Home Builders (NAHB) reports that year-to-date single-family home starts were down 4.9% for the first half of this year. This comes even though starts were up in June by 3.5% to a seasonally adjusted high of 847,000 units, according to the U.S. Commerce Department. As a result, the Home Builders Wells Fargo Housing Market Index held steady for the sixth consecutive month.
A series of earthquakes across southern California in recent weeks has the building sector once again warning of insufficient codes and methods to protect existing structures. The Structural Engineers Association of Southern California has taken the occasion to advise officials and policymakers to be keenly aware of the thousands of so called soft story buildings in Los Angeles County alone. Such buildings that incorporate residences and parking areas were built by the thousands in the 60’s and 70’s and have as many as one million occupants. Many have not been retrofitted with additional support beams as required under new building codes. Building engineers say they could collapse in a significant quake.
Contractors remain upbeat regarding nonresidential construction prospects for 2019 in the latest survey by Associated Builders and Contractors Construction Confidence Index. Sales, profit margins and staffing levels remain above the index threshold of 50 when last tested in May. Seventy-three percent expect sales to rise in the last half of 2019, and 68% say staffing levels re also expected to increase. Economists at ABC claim recent data regarding job growth and consumer spending indicate that economic slowing has been mild and expansion of the marketplace is anticipated to endure for the next few quarters.
Global Data reports that after tracking 11,000 large scale construction projects 10 states account for 60% of the $3.7 trillion in value in the U.S. California, Texas and New York account for the highest value in the construction project pipeline. With 1,302 projects worth $524 billion, California leads the nation. However, in mixed use construction Florida leads with five of the top 10 projects, more than any other state. The big tech companies are also in the mix with massive projects underway in key city centers in California and Washington.
A recent survey of contractors, construction managers and subs by Dodge Data indicates there’s still a long way to go to fully digitize data in the construction industry. While most cite the expansion of project schedule and performance along with payroll, safety and productivity as their key attributes, only 37% said equipment tracking, telematics and fleet management could be considered as major growth. As software companies have established themselves in project scheduling and financial information, the Dodge Data survey finds safety and equipment usage data still being compiled in paper form and spreadsheets. Even with recent expansion, the use of drones, sensors and wearable technology remains extremely so in the construction field.
In closing, since praise reassures individuals, it helps them neutralize doubts they have about themselves.
This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.
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