Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Associated General Contractors CEO Steve Sandherr sums up many construction industry advocates' impressions of the House Republicans' new tax bill, calling it a much needed framework for debate on how to improve the U.S. tax environment. Lack of set asides to fund President Trump's $1 trillion infrastructure promise or save the faltering Highway Trust Fund prompted industry advocates to challenge the bills provisions that would take tax advantages away from construction. The current bill revokes tax exempt status for interest on municipal bonds which finanaces nearly two-thirds of core U.S. infrastructure work. A bi-partisan group of 150 members of Congress signed a letter earlier this year urging House leadership to keep the deduction, and those calls have been renewed since release of the GOP bill. The bill would also cap the tax rate on some income for partnerships, sole proprietorships, S corps and other pass through entitites at 25%, but excludes some service industries including engineering and consulting. The American Institute of Architects won't support the bill as drafted, and AGC has committed to vigorously advocate for more inclusive pass through language, too. Most AGC member firms are pass through entities, and Sandherr warns that any failure to address pass through businesses in the final plan would mean many construction firms would not benefit.
The 2018 Construction Outlook from Dodge Data forecasts a 3% rise in the value of total construction starts to $765 billion next year, and Chief Economist Robert Murray says 2017 should end the year about 4% above last years at $746 billion. The Dodge Data projections show single family construction up 9%, institutional up 3%, and commercial up 2% while multifamily construction is off 8% and electric utility and gas plants are off 13%.. Murray claims that job growth, interest rate stability, and local and state bonding will be the key drivers for 2018.
A big jump in the nation's unemployment levels in October as 261,000 jobs were created, and the unemployment rate fell to 4.1%. The construction sector added 11,000. October's total of 6.9 million construction jobs was the highest since 2008. The increases mirror those of the U.S. conference board which indicate economic activity powering the marketplace and the hit from recent hurricanes and firestorms is dissipating.
Look for a major hit in the near future to the nation's home building industry as the U.S. Commerce Department has reached its final conclusion on the issue of softwood lumber imports. As a result, Canadian lumber exporters will have to pay a new duty rate of 20.83% thus escalating the trade dispute in the midst of ongoing NAFTA agreement talks.
Nearly nine months after some 188,000 residents were forced to flee the potential rupture of the Oroville California Dam, repairs have been completed. Kiewit Corporation was tabbed to rebuild the main spillway and adjacent emergency spillway in a $275 million dollar deal. However, the winter season is approaching and work is being scaled back. Kiewit has informed all the parties involved it could take another $200 million to complete the Oroville Dam work because the bedrock is not a supportive as thought, requiring a deeper dig and thousands more tons of concrete.
The state of Texas is floating a $61 billion plan to rebuild Houston and the Gulf Coast following Hurricane Harvey. About 60% of the funds would go to future proof flood prone areas with new coastal spines and reservoirs. Another 33% would pay for buyouts and to elevate existing buildings in low lying areas. While most of the funding would go to Houston, the area stretching from Rockport to Beaumont is also included in the plan.
The November elections were good for construction projects nationwide. Approved by voters were a $937 million Denver bond issue for transportation, a $1 billion Texas bond issue to pay for transportation and other issues, a school bonding effort for $922 million in Mechlenburg County, North Carolina, and a $1 billion bonding to build a new passenger terminal at Kansas City Airport. In Miami, voters approved spending $900 million on flood relief efforts and to upgrade storm water systems.
A new revolutionary robot has been developed by a Pennsylvania construction company that can tie rebar to form bridge decks. Tybot, developed by Brayman Construction, is a robotic arm that can be stretched to cover 140 feet across the width of a bridge under construction. It will significantly cut labor hours and worker injuries by eliminating the need to straddle rebar frames. Supervised by a single worker, Tybot can be programmed to cover any rebar joint in any direction or intersection, thus reducing the number of workers needed for that type of operation.
In closing, the Internet is like a vault with a screen door on the back. I don't need jackhammers and atom bomb to get in when I can walk through the door.
This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.