Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com
$95 billion and counting is the latest estimate of costs to the world's insurance industry from hurricanes Harvey, Irma and Maria and two earthquakes in Mexico. That from Swiss Re one of the worlds largest re-insurers. And the number does not include the losses in recent wildfires that scarred northern California, now estimated at another billion. While the fires destroyed some 6,000 structures they sparred massive vineyards. The resultant smoketaint to grapes, though, is seen as likely to destroy the crop.
The Weather Channel reports 16 billion dollar disasters have occurred in 2017. All told they have created havoc with the nations construction sector, and the statistics are beginning to show.
The Producer Price Index for September increased 4/10ths of a percent from August and 2.6% year-over-year, according to AGC. The PPI for final demand construction not seasonally adjusted rose 1/10th of a percent for the month and 3.4% for the year. The latest report on construction job openings totaled 247,000 as of October 11th. Openings rose for the seventh year in a row to their highest in 17 years at 391,000. More jobs would have been filled if the workers were available, as contractors continue searching for skilled employees. The value of nonresidential construction starts leapt 43% year over year through September, spurred by three mega projects underway.
Caterpillar is on a financial rebound. Construction equipment revenue jumped in the third quarter with its stock gaining 5.7% or 7.44 to 139.12 per share — a 50% gain for the year. Cat reports the increase is due to heavy equipment demand and a stronger Chinese market. Cat has become one of the biggest winners on the 30 company DOW average this year.
Dodge Data reports the value of construction starts surged 14% from August to a seasonally adjusted rate of $814.8 billion in September driven by the nonresidential sector, which spiked 37% month over month. As a result, the Dodge Index rose to its highest level for 2017 at 172, up from 151 in August.
Construction materials prices are up 8 /10ths of a percent from August to September, but year for year are up 4.5% — three times the rate of inflation, according to Associated Builders and Contractors. Non ferrous wire and cable prices rose 3% — the biggest gain of all 11 construction materials categories — while crude petroleum was up 13.9% — the biggest year over year. Softwood lumber costs were down 9/10ths of a percent. ABC Chief Economist Anirban Basau says construction activity has contributed to higher materials cost as well as post hurricane recovery while global economic growth is expected to put continued pressure on material prices going forward.
The Texas Department of Transportation has removed more than 10 million cubic yards of debris — the equivalent of 186 football fields — from Texas roads since landfall August 25th. The area covers from Corpus Christi to Houston and numerous towns in between that make up the four Texas DOT districts most heavily impacted by Hurricane Harvey.
Conflicting gas tax news. It’s not gonna happen is what a GOP congressman said about any national increase in the highway gas tax. Sam. Graves, a Missouri republican, chairs the House Transportation and Infrastructure subcommittee on highways and transit. Graves recently stated there will be no hike in the federal gas tax under a republican administration. However, National Economic Council Advisor Gary Cohen says a gas tax hike of seven cents per gallon may be needed to pay for much needed infrastructure improvements. Legislation is anticipated to follow that on tax reform.
The construction industry in New York City is opposed to a new measure that has recently been adopted that requires worker training for all construction jobs in the city. A 10-hour OSHA approved safety course or its equivalent will be mandatory by March of next year. If the NYC Department of Buildings rules not enough centers can meet demand, the deadline would be moved to December 2020.
California's gas tax has just increased by 12 cents per gallon effective November 1st. It's all part of the $54 billion Fix It First Transportation improvement package adopted by lawmakers earlier this year. As for truckers, diesel fuel taxes are jumping 20 cents per gallon. For opponents, the proof will be in the repairs to 500 bridges and thousands of miles of pavement.
Voters in West Virginia have approved legislation to raise their state's gas tax to pay for bond funding of a $2.8 billion infrastructure program. West Virginia is spending $260 million on federal Garvvee bonds to pay for 13 interstate reconstruction projects and 18 bridge replacements statewide. The state will then sell $500 million in bonds next spring. State DOT Secretary Tom Smith says the action permits spending upwards of $2.6 billion to support much needed road work.
In closing, I know the voices in my head aren't real, but sometimes their ideas are just absolutely awesome!
This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.