Construction News Tracker is presented by Caterpiller and produced by ForConstructionPros.com.
Construction spending in May reached $1.3 trillion, a record as monthly increases in residential and public investment outweighed a decline in private nonresidential outlays. AGC Chief Economist Ken Simonson says public construction spending is now at its highest level since 2010.
Single family construction continues to expand, multifamily construction is out of a recent slump and private nonresidential spending remains modest despite pressures from rising materials costs and worker shortages. May construction spending increased four-tenths of a percent and 4.5% from the same month in 2017. Highway and street construction rose 5.8%, transportation construction was up 9.1%, water supply construction jumped 9.4%, while conservation and development rose 8.5%.
The Federal Transit Administration implemented a new rule June 29th that removes any barriers that may prevent private industry investment in any public transportation infrastructure projects. FTA recipients and sponsors can now move forward in seeking waivers under the Private Investment Project Procedures Act. The idea is to foster private industry investment and involvement in project planning, development, funding and design. It's all part of the congressional MAP 21 Act.
The national construction unemployment rate for May, not seasonally adjusted, fell to its lowest rate on record for the month to 4.4%. Meanwhile, the industry itself employed 291,000 more workers than it did for the same month in 2017. Markstein Advisors, which compiled the report for ABC, noted that this comes in the midst of tremendous industry pressure from rising tariffs and materials prices. The states with the lowest unemployment rates were Iowa, Vermont, South Dakota and Maine while the states with the highest NSA unemployment rates were Kentucky, West Virginia, Arkansas and Mississippi.
The third office building at the World Trade Center site has opened for business. World Trade Center 3 is a 1,079-foot, 80-story complex and now the fifth tallest structure in New York City. Though construction was started in 2010, it was halted at seven stories for three years until the financial picture brightened. For those visiting the World Trade Center National Memorial Museum, you can visit the 62-foot lobby of World Trade Center 3 as well as outdoor terraces on the 17th, 60th and 76th floors.
The American Rental Association in its May update is projecting larger increases across the board when compared to its five-year forecast issued earlier in the year. ARA is now forecasting revenue to total $52.3 billion in 2018 as opposed to its earlier mark of $51.5 billion. IHS Market, which compiled the numbers for ARA, claims that the industry remains strong despite whipsawing from tariffs and other policy dangers and spending has grown by 8.7%. Construction rental revenue is now expected to increase another 5.7% in 2019, 5.3% in 2020 and grow by 4.2% in 2021.
The Federal Aviation Administration has issued its first grants to fund 346 projects. The money is earmarked for 214 airports in 43 states to receive $677 million of the $3.2 billion set aside for improvements. Runways, taxiways, aprons and terminals are included in the funding, and 92% of the projects are to receive asphalt paving. Among the projects listed are:
- King Salmon Alaska for $12.8 million for runway and taxiway improvements
- Fayetteville Rogers Arkansas airport for $13.6 million
- Denver International for $14.2 million
- San Diego International for $12.1 million
- Davenport Iowa airport for $6.6 million in runway repairs
A last minute judicial ruling has kept the Savannah River nuclear power plant construction from shutting down. The federal government is seeking to shutter construction on the massive project as it is over budget and behind schedule. On the drawing boards for over 20 years and under construction since 2010 the mixed oxide fuel plant to turn excess weapons grade plutonium into nuclear reactor fuel has been the center of controversy for years. The U.S. Energy Department contends the plant is out of date.
Another VA hospital project is under fire for cost overruns and delays stemming from Army Corps of Engineers change orders. This time it’s the Fort Bliss, Texas, hospital expansion, which the Department of Defense Office of Inspector General claims is $165.6 million over budget for design errors and omissions. The original cost of the new military medical center was $966 million but has since ballooned to $1.2 billion for the 1.1-million-square-foot, 135 bed facility. The defense agency claims there has been 973 contract changes and 187 lost construction days on the project.
It's not the first time this has occurred. As you will recall, the Rocky Mountain hospital in Aurora, Colorado, also came under scrutiny for similar problems a few years ago.
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.