Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Recent hiccups in the economy with an inversion of bond rates and drops in the major indexes has raised concern in the construction industry. ABC Chief Economist Anirban Basu says that every economic expansion has been followed by a recession, and looking at conditions on the ground it likely won’t be this year. Basu goes on to say that 2020 could be problematic for the broader economy and 2021 for a significant number of contractors.
Read next: Economic Vulnerabilities Could Trigger a Recession in 2020
Despite the fact that the construction season is in full operation the Bureau of Labor Statistics reports that construction employment in July was relatively flat with only 4,000 new jobs added to the rolls. Seasonally adjusted for July, year-over-year construction employment rose 2.8%. Construction unemployment now remains below 10% nationwide while the national rate is at 3.8%.
The results of a special survey by the National Association of Home Builders/Wells Fargo Housing Market Index have been analyzed. They explain plenty of why the home building industry is experiencing labor and subcontractor shortages nationwide. Contractors say the shortage of framing crews is 83%, citing little change from last year. Labor shortages across 14 occupations in home building were unchanged from 2018 and overall caused labor shortages by 69% of builders — the highest number on record.
Home building construction fell 4% in July held back by worker shortage and affordable land, according to the Commerce Department. The seasonally adjusted rate was 1.19 million units. Housing starts have declined by 3.1% this year. Single-family home building rose 1.3% in July while multifamily building was off a staggering 17.2%. The construction report indicates that the focus going forward may be on apartments.
Read next: Multifamily Housing Oversupply Looms in Lucrative Metro Markets
Las Vegas is in the midst of a building boom with both private and public projects underway. The most expensive public works event is in its Neon highway build, a $1 billion widening of Interstate 15 along with 20 miles of new HOV lanes has been completed. Nevada DOT says 4,000 jobs were created with the Neon project adding 63 lane miles of concrete and asphalt and 29 new bridges in the three-year build.
Meanwhile, at the south end of The Strip the final steel beam in the structure of the new Allegiant Football Stadium to house the Las Vegas Raiders has been put in place. Now about 65% complete, the $1.8 billion stadium is expected to be ready for fans by opening day 2020.
The 12 cent per gallon gas tax, bonds and other measures imposed by California two years ago is now generating an estimated $14.6 billion in transportation funds over the long haul. Caltrans has $5.4 billion annually to invest in roads and bridges, and the agency says it intends to repair over 17,000 lane miles, 500 bridges and 55,000 culverts by 2027. The state agency says the last time repairs of this magnitude occurred was in the 90’s when California doubled its gas tax to 18 cents per gallon.
Richmond, VA, is poised to undertake a massive downtown rehabilitation program. Said to be the largest economic development ever, the city plans to redevelop 21 acres of public land anchored by a new 17,000 seat city arena in a $1.5 billion program. Overall, the plans call for new housing, commercial development, retail and a new hotel.
The need for even larger convention centers is in the construction forefront as major cities are engaged in new development.
Balfour Beatty has been tabbed as the design-build lead of a $1 billion expansion of the Broward County complex in Fort Lauderdale, FL. It will add 525,000 square feet of meeting space plus a new 29-story hotel.
And in Las Vegas, that city has just placed the final truss on its new 600,000-square-foot west exhibition hall in a $1.4 billion expansion of the complex expected to be completed in 2021.
Progress is being made on a National Coast Guard Museum complex to be built at New London, Connecticut. The first bids are expected to be awarded within days for the estimated $100 million project. AZ Construction has been selected as the design-build contractor for the 5-story, 80,000-square-foot interactive museum on the New London waterfront. Forty-eight of the $100 million needed has already been raised for the project expected to be a federal facility when completed.
In closing, nothing derails a train of thought more effectively than listening to a person with a one-track mind.
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