Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
It's done. There will be no further infrastructure talks between the President and Congress. That's what acting White House Chief of Staff Mick Mulvaney told CNBC in a wide ranging interview June 12th. Mulvaney says the two leaders have no plan to resume infrastructure budget talks after they blew up last month. While both Speaker Nancy Pelosi and President Trump must cooperate on passing a federal budget and approving trade agreements, it is highly unlikely the topic of improving the nation's infrastructure will be broached again in the coming months. So apparently there goes any opportunity for an in-depth discussion on a $2 trillion effort to improve the nation's infrastructure.
AGC says Commerce Department construction spending data show construction industry so far in 2019 outside of the single family housing market: Overall construction spending nationwide was unchanged through April, though tariffs and their counter measures are adding costs to construction projects. AGC Chief Economist Ken Simonson said the year-to-date totals show increasing activity for most nonresidential sectors despite a 7.6% drop in residential spending. Multifamily housing, by the way, was up 7.9%. Among the three largest public categories highway and street construction spending was up 17.2%, educational spending up 8.9%, and transportation construction spending was up over the four months by 6.2%. Those three public spending categories made up 15% of the total U.S. construction spending so far in 2019 while single-family housing made up 20% of the total.
Construction costs continue to escalate, according to the latest producer price index from the federal government. The prices for asphalt and steel bars and plates lead the new index at a 28% jump year over year. Precast concrete was up 4.8% while construction equipment costs were up 5.7%. The overall cost of construction rose 5.4% year over year as of April with the majority of that increase pointed at the cost for labor.
A major wind and rain storm in the Dallas area recently is the apparent cause of a crane collapse. Authorities say the rig came down across a five story apartment complex and killed one resident while injuring others. Bigge Crane and Rigging owns the crane and was assessing the cause along with Dallas officials. The National Weather Service had issued a severe storm warning with 70 mph winds just ahead of the collapse, which crushed through a parking garage as well as apartments.
The first quarter report of 2019 by the Marcum Construction Index indicates the highest level of private nonresidential spending ever. The seasonally adjusted annualized report shows $460 billion in construction activity — a gain of 2.1% from 2018. Spending in all 16 nonresidential sectors totaled $775.2 billion — a 4.8% jump from the previous year. Marcum Chief Economist Anirban Basu is issuing a cautious report listing outside pressures on construction such as the growing potential for an all out trade war with China, Brexits destabilizing financial markets, surging corporate debt, a looming federal debt ceiling crisis and record consumer debt. Basu says if the global economy continues to slow markets give back some of their gains and inflation becomes apparent. 2020 could be the year of the next downturn.
A meager gain of just 75,000 jobs in the U.S. in May after a consensus forecast of 175,000 new jobs has economists concerned. Most categories of the jobs report indicated firm weakness as the unemployment rate pegged at 3.6%. Construction was one of the indexes with meager gain and rests at 3.2%. Ongoing trade concerns with China has the economic community worried, according to leading barometers.
US Job and Wage Growth Slow Sharply in May
Illinois has recently passed a major infrastructure spending bill that commits the state to spend $41.5 billion over the next six years. The measure pushed by newly elected Governor J.B. Pritzger would be funded by $17.8 billion in new bonds. An increase in the gas tax, vehicle registration fees and other tax hikes is expected to raise $1.7 billion annually. The Governor praised lawmakers for their efforts.
The Texas DOT has awarded a contract worth $1.7 billion to a joint entity of Balfour Beatty and Flour Corporations to construct an enhanced Interstate Highway 635 around Dallas. The LBJ East Highway project consists of reconstruction and widening 11 miles north and east of the city along with an interchange at Interstate 30. Over all, it will contain 12 traffic lanes including two tolled lanes. Texas DOT officials say Flour will lead the joint venture with 55% of the project and Balfour Beatty the remainder. It is expected to employ some 2,200 construction workers at peak and be completed in 2024.
In closing, realistic goals may be beyond your grasp but within your reach.
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