[VIDEO] Trump’s NAFTA Hardball Could Raise Average Home Cost $3K

President Trump's threat to cancel the US part in the North American Free Trade Agreement could inflate housing construction costs; plus more industry news in the May 11, 2017, edition of Construction News Tracker

Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.

A presidential executive order to buy American, hire American targeting foreign materials sources has been signed by President Trump. Not only does it place new restrictions on foreign worker visas but it limits the materials that public agencies can purchase from foreign manufacturers.

The order set out a 120-day review period by federal agencies to figure out how to comply. The construction industry is reportedly highly concerned, namely AGC, over the ramifications of the order as it could affect not only member companies but eventually undermine sourcing policies and add huge costs to bottom lines under the Buy American edict.

The nation's payroll again rebounded in April by more than forecast, and the jobless rate fell to 4.4% as a result of the 211,000 jobs added. Construction did not fare all that well as only 5,000 additional jobs were tallied for the month with wages again soft climbing just 2.5% from 2016. The national unemployment rate is now at its lowest point since May of 2007.

April Construction Employment at Highest Level in More than 9 Years

Concern over future positioning of the U.S. status on the North American Free Trade Agreement (NAFTA) has construction in a tither. The White House is fomenting radical changes to the long-term agreement - even threatening to cancel it all together. One of the key ingredients to NAFTA is its posture with Canada and its lumber industry. A threat to increase tariffs, reducing imports, could inflate the cost of a single family home by $3,000, according to the National Association of Home Builder, as the U.S. absorbs 69% of Canadian lumber exports.

The total value of U.S. construction put-in-place in March surprised economists when it slipped 2/10ths of a percent. The essentially flat March result never the less leaves construction spending at record highs for the second straight month.

U.S. construction spending is 4.9% for the first three months of this year. Compared with the first three months of 2016, structures, business investment and residnetial construction were bright spots through the first quarter.

Public construction spending declined 9/10ths of a percent in March, and slipping private nonresidential outlays were offset by a 1.2% gain in private residential spending.

Since its overhaul in 2016 of average fine costs for serious workplace safety violations, OSHA has significantly increased their costs. Using the Consumer Price Index as a guide, OSHA upped its fines in January to the point where a repeat extremely serious violation has reached $126,746 while the serious citation has gone from $5,087 to $12,675.

Employers now must also conduct their own incident investigations, propose remedies and respond rapidly to any occurrence.

AGC has been at the forefront of efforts to improve construction worker recruitment across the industry, working with trade schools, colleges and universities to initiate classes. So it must have been a disappointment recently to learn via a national survey that 74% of young adults 18 to 25 have no interest in joining the field.

Just 3% picked construction trades as a career. Of those showing an interest, 80% said pay and 74% indicated ability to learn useful skills as benefits to work in the field. The AGC survey discovered that young adults found physical work - and construction in particular - as reasons to stay clear of the industry. Looks like there's a major selling job ahead if the industry is to overcome the huge void of skilled workers in the future pipeline.

Trumbull Corporation of Pittsburgh has been selected as the company to build a new toll bridge over the Delaware River. The functionally obsolete bridge that carries traffic along Interstate 276 between Camden, NJ, and Philadelphia has been closed to traffic after supports were found to have ruptured. Now the formerly free crossing will become tolled when its replacement is completed.

Facing a budget deficit of nearly a billion dollars, Oklahoma lawmakers are sharpening their budget knives, and as one would suspect transportation will be hard hit. The Oklahoma DOT has suspended work on 10 projects as its budget was sliced by $251 million. The Oklahoma agency is looking at another 80 projects awarded but not yet funded as also being jettisoned.

It was March 30 when a major fire engulfed a portion of Interstate 85 near downtown Atlanta causing massive traffic jams and general chaos. The heat caused two spans of the elevated roadway to collapse and even as the embers flowed Georgia DOT officials were at work assessing the damage and most efficient way to get it repaired. Contractors CMC Mathews was selected to tackle the project and to date has replaced 13 support columns. If Mathews can complete the project by late May it stands to gain a $3 million bonus.

In closing, business is a lot like a game of tennis. Those who serve well usually end up winning.

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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