Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Smiles abound at the National Association of Realtors as the housing market continues on a healthy rebound. Purchase contracts for existing homes jumped in April to their highest level since 2010, and the sales gauge is up at a decade high of 116.3 with 100 indicating a historically healthy buyers' market.
April proved to be a seesaw month for construction spending. Wells Frago Economics reports construction spending fell 1.8% on a seasonally adjusted rate to $1.133 billion, despite the fact the first four months of this year was 8.7% higher than 2015. Nonresidential spending saw a plunge in highway and street construction dollars, dropping a total of 2.1% for the month, while residential spending lost 1.5% to $445 billion.
Even with the monthly loss, it's a 7.7% improvement over April of last year. Wells Fargo claims the bottom line, however, is a significant economic improvement from 2015 and appears bullish for the balance of 2016.
The Federal DOT may get upwards of $540 million additional dollars to spend on highway projects in fiscal year 2017. That's if a House appropriations committee bill gains approval from both houses of Congress. More importantly, it funds the Federal DOT at the same level as the FAST Act approved by Congress last December. Overall, it would provide $76.9 billion for infrastructure projects nationwide next year.
Once the House votes it must be reconciled with one the Senate passed last month calling for cuts of $2.2 billion in past unused funding that state DOTs were prevented from using due to the so-called Recession Authority of Congress, and construction advocates vehemently oppose.
By the way, Ken Simonson, chief economist of AGC, says that the Great Recession years of 2007-2011 caused the loss of a staggering 2.3 million construction jobs. Slightly less than half of them have returned to the marketplace — or 1.2 million workers added since 2011 — and it's causing a huge problem for contractors.
Similar to the fight with OSHA over newly adopted rules for reporting worker illness and injury, construction is now engaged in a fight with the Labor Department over newly adopted rules governing overtime pay.
Taking effect in December the exempt threshold for salaried workers jumps from $23,660 to $47,476 per year — meaning everyone making over that amount is subject to receiving overtime pay.
AGC claims the rule will not result in higher wages but force employers to devote more resources to compliance while the National Association of Home Builders terms the Labor Department edict as sheer arrogance in the face of small business operations.
Checking in with our neighbors to the north in Canada, those massive wildfires that claimed thousands of acres of Alberta land and caused some 88,000 people to flee could cost upwards of $7 billion in insurance claims. Adjusters in from Fort McMurrary say 2,400 structures were destroyed — some 10% of the community.
With some now being permitted back home, officials caution there is no water, electricity or community support functions available.
Because of the upheaval of residents and workforce, Nexan Oil Sands Company indicates it may not be able to meet present Canadian crude oil contracts. While the oil sand infrastructure itself managed to escape the raging fires, the loss of employees to operate facilities is resulting in a million barrels of oil daily production cutbacks.
The tallest building west of the Mississippi has been topped out, or should we say slid out, with the addition of a skyslide to the 72-story structure soon to open in downtown Los Angeles. Jutting out from the 70th floor, the 45-foot-long skyslide is a transparent ramp recently dropped into place from a helicopter.
It's only 1.25 inches thick, so the thrill ride 1,000 feet off of terra firma should provide some impressive views from the Pacific coast over the Santa Monica mountains to the San Fernando Valley to the north.
By the way, the ride will cost you $8.
In closing, the one who says it can't be done should never interrupt the one who is doing it.
This is Construction News Tracker looking over the industry that makes the world a better place. Presented by Caterpillar and produced by ForConstructionPros.com.