Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Dodge Data outlook negative
Dodge Data has compiled an outlook for construction into the second quarter of the year, and it's not good. Second quarter home sales could probably fall by 50% compared to quarter one, bringing the nation back to levels last seen during the 2008-2009 recession, according to Dodge Chief Economist Richard Branch. And the outlook is dependent upon stay at home-stay in place requirements.
Essentially since the spring and summer home selling seasons are gone, according to Dodge Analytics, with single family starts down 10% this year and picking up with 5% growth in 2021. Multifamily starts were behind single family when the year began, at a 19% drop, and it's likely that sector will not recover as quickly as the year progresses.
The analysis sees office starts dropping 13%, retail space down 33% and hotel and motel construction off 31%.. Dodge also claims it sees owners and developers facing increased financial difficulty.
Home building faces difficulties
The Commerce Department reports that the nation's home building industry lost 22% of its starts in March. Ground breaking occurred at a seasonally adjusted rate of 1.2 million units, down from its 1.56 million pace the previous month. Single family home construction lost 17.5% while apartment and condo starts were off by a staggering 32% from February.
Commerce also reported that half built homes were left abandoned in 6% of cases, leaving behind the prospect of half built housing developments in the months ahead. Fear is emanating from homebuilders evidenced by the National Assocation of Home Builders/Wells Fargo Confidence Index which shows a plunge this month of 42 points. The Index, now at 30, represents its single biggest monthly change in history as any index below 50 indicates a decline in the market.
Unemployment continues to increase
What took nine and a half years to build up disintegrated in just a little more than a month. We're talking about the 26 million jobs that have dissolved since the coronavirus epidemic began in March. Construction employment declined in 20 states and the District of Columbia. California, which normally leads the nation in jobs, lost 11,600 in March — the most of any state.
Unemployment is expected now to top 10% — highest of the 2008-2009 recession.
Construction benefits from Paycheck Protection Program
The Small Business Administration's Paycheck Protection Program paid out nearly $45 billion to some 177 claimants in construction before the fund ran dry April 13 — more than any other industry. ABC reports that 14% of the $247 billion spent went to small business contractors with 500 or fewer employees. Seventy percent of the loans approved went for less than $150,000.
The Associated General Contractors of America's Chief Economist Ken Simonson says 74% of contractors are reporting cancellations of upcoming projects and shortages of materials and causing layoffs to upwards of 40% of firms.
ARTBA bridge report
ARTBA has released its seventh annual National Bridge Report from an analysis of U.S. Transportation Department database. The road and transportation builders association says there are now 230,000 bridges in need of major repair or replacement in the U.S. Thirty-seven percent of all the roadway bridges in the nation, 46,000, are deemed structurally deficient or in poor condition.
ARTBA officials say economic recovery from the coronavirus comes with strategic road and bridge improvements that support direct job creation and retention while enhancing U.S. productivity for years to come.
Highway construction down with less vehicles traveling
The coronavirus quarantine that has covered all but a handful of states has resulted in a tremendous reduction in the amount of vehicle miles traveled. Georgia reports that vehicle miles traveled across the state since March 20 dropped 62%. States report major changes in the number of traffic accidents reported, but it also carries a tremendous loss in the amount of revenue derived from lost fuel taxes and roadway fees.
Missouri has decided to forgo planned highway improvements on eight projects as the amount of highway traffic has dropped by 35% since February and its source of highway funding — fuel taxes — have dropped substantially as pump prices have taken a tumble.
Fines levied in Hard Rock Hotel collapse
Recalling the October 2019 partial collapse of the Hard Rock Hotel in downtown New Orleans OSHA has recently completed its months-long investigation of the incident. The result totals over $315,000 in fines to 11 construction firms involved in the building project. The largest fine of more than $154,000 has been lodged against Heaslip Engineering Group for violations of design.
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