Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
A nice bounce back in March to the nation's jobs index as the Labor Department reported 196,000 new jobs were added last month. The unemployment rate remains at 3.8% unchanged from February, even though the monthly numbers were revised upwards to 33,000 added in February and to 312,000 for January. Construction alone posted upbeat results as construction gained 16,000 jobs in March, recouping nearly two-thirds of the 25,000 lost in February. The services sector led the employment market numbers last month adding 70,000 jobs followed by professional services with 37,000 jobs added. Unfortunately, the manufacturing index dropped by 6,000 following a flat February.
Citing analysis from the U.S. Commerce Department, AGC is reporting that public nonresidential spending was up 3.7% in February while private nonresidential spending fell one half of 1%.. Seasonally adjusted nonresidential spending totaled $778.3 billion, an increase of 4.8% over February of 2018. That puts private nonresidential spending up an impressive 12.1% for the year while highway construction was up 9.6% and water construction up 5.2%. Transportation construction lost 3.8%.
ABC Chief Economist Anirban Basu says recent economic readings are weaker than expected. Private nonresidential construction has flat-lined with spending virtually unchanged on a year ago basis although materials costs are higher, which suggests that the physical amount of put in place has declined in real terms over the last year. Basu cites the fact that public nonresidential construction is up sharply over the same time frame.
The latest Dodge Momentum Index shows some upward movement from February but not much. The increase to 145.5 from 144.8 is quite small. It's due to a 2.8% increase in the March commercial component while the institutional component fell 3%. The Dodge Index is a monthly measure of nonresidential building projects in planning. Overall, the Index has moved sideways, remaining within a narrow band of activity since fall of 2018.
Moody's Investor Services is reporting that the nation's homebuilders, in an effort to keep pace with a softening economy, will focus on constructing entry level homes. Declining affordability, the result of persistent price appreciation, and rising home ownership costs is contributing to the softening. Moody's claims that over the next 12 to 18 months homebuilders will pursue entry level and first time buyers in order to keep the pipeline open to additional construction needed nationwide.
The U.S. has 47,052 bridges that are structurally deficient, and at the present pace of reconstruction it will take 80 years to achieve completion. ARTBA, the American Road and Transportation Builders Association, is adamant about the number and states that pace of repair has slowed to its lowest point in the past five years. Of the 616,087 bridges in the nation 38% — or 235,000 — need repair, replacement or major rehabilitation; and of that number, 18,000 link the country's Interstate highway system. It's all part of ARTBA’s review of the 2018 U.S. DOT National Bridge Inventory Database.
A recent interesting poll from the American Automobile Association. Nearly 50% say that state roads and bridges are in poor condtion while 26% rate them as poor or terrible. Sixty-two percent of Illinois residents told the AAA current transportation funding is not enough, but a whopping 74% said they were not in favor of shelling out any more money in fees or taxes to pay for upgrades. The poll covered 10 Midwestern states. Interesting that the state of Ohio has just passed legislation to hike its gas tax by a dime a gallon and its diesel tax to 47 cents per gallon. Michigan residents have the lowest opinion of their roads and bridge conditions. That does not bode well for proponents of raising more dollars to fund fixes as legislators are trying to do in many of those same states.
The nation's tallest dam has been placed back in service following extensive repairs. The Oroville Dam in the foothills of the Sierra Nevada mountains of northern California main spillway began eroding two years ago causing the evacuation of thousands of downstream residents. Engineers with CalDOT rebuilt the waterway on the 770-foot-high dam at a cost of $1.1 billion. FEAM, the Federal Emergency Agency, has rejected paying $306 million of a $639 million reimbursement, so local California water agencies are picking up the remaining costs. Where four years ago there was barely a water trickle over the spillway this year the snowpack is 106 inches, and the water is now gushing down.
In closing, one person with a belief is equal to a force of 99 who only have interests.
This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.