Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Construction starts increasing
The very latest statistics show construction starts moved 37% higher in November from October, according to Dodge Data. Numerous large projects broke ground shortly before the end of 2019 as nonresidential building starts grew 61% while non-building starts were up a staggering 82% and residential starts were flat going into November.
The November rise pushed the Dodge Data Index to 209 compared with 153 in October. Dodge Chief Economist Richard Branch says the underlying trend for the year remains intact, and construction starts are settling back into a mold following nine consistent years of growth.
Meanwhile, the Commerce Department reports U.S. construction projects rose a solid 6/10ths of a percent in November for the fifth monthly gain. It was led by home building, which saw a 1.9% rise — more than double the October increase.
Contractors expecting improved profit margins
An Associated Builders and Contractors (ABC) Construction Confidence Index produced in October shows 46% of contractors expect their profit margins to increase over the next six months, but that trend also reports a less than stellar outlook for staffing levels. Despite the large and growing skills shortage and rising cost of compensation contractors tell ABC their profit margins will drop, which indicates a rising demand for construction services.
Anirban Basu, chief economist at ABC, says the industry is entering 2020 with substantial momentum while abundant curves remain as the year progresses.
Home building looks positive
Home building contract signings rose 7.4% in November, according to the National Association of Home Builders, as a positive sign for the industry. It's a rebound from October, and the Home Sales Index, which measures purchase contracts signs, is at 108.5 — an increase of 1.2%.
The home builders' association reports the biggest hurdle appears to be a lack of supply of new homes as the market shrunk 5.7% to 1.64 million units from a year ago. The greatest growth area is in the West followed by the Midwest for new home sales.
2020 outlook looks positive
ARTBA is projecting a 5% expansion in the nation's transportation infrastructure market this year. Chief Economist Allison Premo Black says increased investments from state, local and the federal government should reach $300.4 billion in real market growth for the year.
A 6% increase in the value of public highway, street and related construction is expected to come in around $77.5 billion after growth of 19% in 2019. The ARTBA analysis shows continued growth over the next five years in the transportation sector.
Likewise from AGC, a late November/early December survey elicited responses from 1,000 contractors indicating a positive 2020 outlook. Project value increases ranging from 8% to 25% are anticipated in all 13 types the AGC survey covered — ranging from water and sewer, bridge and highway, k12 school, transportation and multifamily residential. The survey was conducted in cooperation with Sage Construction.
Texas bullet train
Texas Central, the private company developing a bullet train across the Lone Star state, reports it reached agreement with Lane Construction and Salini Impreglio to design, construct and build the 240-mile line. The $14 billion agreement is another step in the process of building the bullet train between Dallas and Houston.
Denver Airport gets new GC
You may recall a story back in August regarding construction of the Denver International Airport. That authority then dumped its contract with Great Hall Partners following a series of delays and disputes. Since then, authorities have worked to mitigate the situation and have hired Stantec as the lead design and Hensel Phelps as construction manager and general contractor on the $770 million Great Hall project.
Las Vegas starts underground loop construction
Digging is underway at the Las Vegas Convention Center for its underground people mover system. The 1-mile-long operation will convey convention attendees between buildings at the massive complex on the $52 million project. Officials hope that it becomes such a success it could be expanded beneath Las Vegas streets to reduce traffic congestion.
About a mile of twin tunnels are being bored 40 feet underground and designed to connect three stations on the Convention Center's 200 acre campus. It's expected to be completed in 2021.
Ohio DOT uses humor in road signs
It's become pretty comical along highways in Ohio as the DOT has implemented road signs with meaning. Among them is one that says"Life is fragil-iee. Drive Safe" — a total reference to the movie A Christmas Story.
Another Ohio DOT sign says drivers should stay in the right lane unless passing as Santa needs the left lane for his express service. The Ohio DOT says the signage may seem flip, but they have found that tying them to pop culture references makes motorists remember them and their meaning, and change their driving behavior.
In closing, since praise reassures individuals, it helps them neutralize doubts they have about themselves.
This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.
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