Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
While the Republican tax code overhaul being pushed in Congress might not sound like infrastructure legislation, you can bet it contains many provisions that could have an impact on the ability of states to pay for public works improvements. The proposed plans that have passed the Senate and now face Congressional reconciliation include major changes to financing roads, ports and airports as well as other programs related to our burgeoning economy. Among other things in the tax package is the elimination of deductions on tax exempt private activity bonds used by private public partnerships to build infrastructure, a loss of $40 billion alone.
The latest jobs report indicates construction added 24,000 jobs to payrolls in November. Overall the nation's unemployment stat remains strong with 228,000 jobs added last month, exceeding economists' predictions. The unemployment rate remains at 4.1%.
Builder confidence in the new single family home market rose to a level of 70 in November on the National Association of Home Builders/Wells Fargo Housing Market Index. That’s the highest level since last March, and the second highest on record since 2005. Needless to say, the NAHB is giddy calling the Index close to a post recession high. And a strong indicator the nation's housing business continues to show steady growth. Sales of new homes in October soared by 6.2% reaching an annualized rate of 685,000, the fastest pace since 2007 with an average selling price of $400,000.
Likewise, the construction employment sector also shows strong growth with 243 of 358 markets showing increased employment between October of last year and 2017. AGC is reporting the growing demand particularly from the private sector is continuing to drive construction employment gains in many parts of the nation. And says Chief Economist Ken Simonson, the tax reform effort can ensure metro areas will add more construction jobs in the near future. Southern California continues to lead the nation's construction jobs market followed by Las Vegas, New York City, Portland, Oregon, and Cheyenne, Wyoming.
Transportation was again the nation's top capitol spending category for 2017, according to the National Association of State Budget Officers. The report indicates state expenditures with $70.2 billion was up 7.6% from last year while federal funds accounted for $27.8 billion — or just 39.6% of the transportation total spending. The net result is that states boosted their total capitol spending this year by 5.7% to an estimated $107 billion.
What's the construction outlook for 2018? Dodge Data and Analytics is boasting a positive note predicting construction starts will climb to $765 billion. Dodge Data Chief Economist Robert Murray says our construction industry has moved into a mature stage of expansion with a steady advancement of 11% to 13% annually, particularly in single family home construction.
In its latest five-year forecast, the American Rental Association shows growth is expected to continue at an average of 4.7%. Rental industry revenue is expected to grow consistently resulting in total revenue of $59.3 billion through 2021.
Contractors working on California state projects would be required to buy lower carbon construction materials under a bill being proposed to the state legislature. The Buy Clean Act would cover steel, rebar, flat glass and mineral wood board insulation, and the state would be required to calculate the average greenhouse gas emissions per unit in their manufacturing. Likewise, contractors bidding on California state projects would have to provide proof that materials being used were at or below GHG emissions via environmental product declarations.
While we've been sleeping two Internet giants have been quietly constructing one of the world's biggest undersea cable crossings. Microsoft and Facebook took on the giant project, named Marea, that connects Virginia Beach, Virginia, to the northern city of Bilbao, Spain. The cable lies 17,000 feet below sea surface, is 4,000 miles long and weighs 10 million pounds. It's a data cable and presently rated at the staggering transmission rate of 160 terabits per second. It has an open design and can be expanded in the future.
January is right around the corner, and we want to pass along this reminder that World of Concrete is, too. The exposition begins January 22nd at the Las Vegas Convention Center and promises to be bigger and better than ever. Information and registration on WOC 18 can be obtained by accessing worldofconcrete.com.
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This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.