[NEWS TRACKER] Tariff Costs to Businesses and Consumers Increase 62% Compared to 2018

Tariffs costs consumers and businesses $6.8 billion in July 2019, resulting in $30 billion in extra import tariffs since 2018; plus more construction industry news in the September 26, 2019, edition of Construction News Tracker

Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.

Were it not for the miraculous turn in steering currents of Hurricane Dorian, the eastern seaboard of the United States could easily have suffered a direct hit by the storm. Six state DOT’s sent significant resources to their districts facing storm onslaught and some incurred upwards of 10-foot storm surges, though damage is reported as small to insignificant. Because the dreaded northeast corner of Dorian stayed well out to sea, the coastline and its communities escaped damage  not like that being experienced in the Bahamas.

Meanwhile, Hurricane Imelda is punishing west Texas with upwards of three feet of rainfall leaving behind some flooding and closed roads.

New data released by a coalition of 150 associations from every sector of the U.S. economy show tariffs costs consumers and businesses $6.8 billion in July. That’s a 62% increase from the same time frame in 2018. The figure includes the tariffs of 10% to 25% over the year's time and the additional $3.5 billion in tariffs on goods imported from China since summer. Americans have now paid $30 billion in extra import tariffs since the trade war began in 2018, according to the group.

AGC and Autodesk have recently completed a survey of contractors on their workforces, and the outlook is dismal for craft workers. Calling it the single most significant threat to the construction industry AGC’s CEO Stephen Sandherr said labor challenges can be fixed, but everyone has to pitch in on the effort. Eighty-percent of the 2,200 respondents say hourly craft worker shortages are their biggest problem. A stunning outcome of this survey, however, shows that 73% of those responding say their candidates are unable to pass drug tests. And it makes no difference if it comes to union or open shop contractors.

Associated Builders and Contractors has recently completed analyzing data from the Bureau of Labor Statistics that shows construction input prices fell six-tenths of a percent in August and are off nine-tenths of a percent year over year. The Producer Price Index  also shows that nonresidential construction input prices fell four-tenths of a percent for August. Price drops on some subcategoryies were off significantly. Softwood lumber was down 11.7%, iron and steel off 10.7%, and steel mill products were down by 10.6%; natural gas prices dropped a whopping 33.3%.. ABC Chief Economist Anirban Basau attributes the drops to a strong U.S. dollar keeping the lid on key import prices.

Own a vehicle registered in Wisconsin? Be prepared to open your wallet larger beginning next month. The state DMV will hike title fees from $69.50 to $164.50 and registrations by $10 to $85 per vehicle. Wisconsin is also raising electric vehicle registrations by $10 per vehicle and adding a $75 surcharge for all hybrid electric vehicles. An idea to raise the state gas tax fell on deaf ears as legislators imposed the new fee schedule instead.

The Dodge Momentum Index dropped 1.3% from July to August, coming in at 137.8 on the scale — that from a revised July mark of 139.6. The drop results from a 16.6% decline in the institutional component. Year over year the Dodge Momentum Index is down 10.3% from August of 2018, which analysts believe is a positive sign that construction spending will settle down for the remainder of 2019. The Momentum Index itself has lost only 1.8% for all of 2019. What is troubling is that the institutional component has lost 22.5% for the year while the commercial construction component is off only 2.4%.

Heavy equipment manufacturer CNH is positioning itself for the long haul with a number of strategic moves. Positioning its brand segments under the banner “transform to win," CNH is outlining a five-year effort to achieve net sales growth of 5% annually by 2024. Among its moves, the company is separating its on- and off-highway brands. Case Construction and New Holland Agriculture will be spun of into the off-highway segment while FPT Industrial Iveco and Iveco Bus will comprise the on highway brands.

Texas is in for some major road building in the not too distant future. The state transportation commission has approved a $77 billion, 10-year building plan. The unified building effort earmarks the funds for roadways in north Texas set to begin before 2023. One project would spend $1 billion on East Loop 820 in Fort Worth while another sets aside a similar amount for widening Interstate 35 in Denton County, Texas, as well as many others.

In closing, realistic goals: beyond your grasp but within your reach.

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