Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Unemployment continues at record levels
Unprecedented — 38.6 million in nine weeks. That's what the latest statistics for unemployment claims has come to. Nearly 39 million. A number that economists say could place the nation's jobless rate at or near 20%.
The latest wave of layoff numbers placed the tab at 2.4 million filing for unemployment recently, bringing the job market collapse unprecedented in its speed in less than two months. Nevada, Michigan and Hawaii led the states with the highest number of unemployed in April. Despite the country beginning to reopen, millions of Americans remain unemployed; some of them permanently.
Home construction plunges in April
Home construction across the nation plunged more than 30% in April as the coronavirus took its toll. The Commerce Department reports ground breakings dropped to its lowest level in five years at a seasonally adjusted rate of 891,000. Single family home construction fell over 24% to a level of 650,000, and no region of the country was sparred from the notable decline as the northeast dropped 46%, in the west by 43.4%, the midwest by 14.9% and the south by 26%.
Zillow calls it the largest monthly housing start decline in history, and it's likely to continue as evidenced by the latest report from the Architectural Billings Index which plummeted to 29.5 for April from a norm of 50 indicating a total decrease in design services — the greatest drop ever.
AGC unimpressed with virus aid spending
As construction continues it’s slow recovery AGC has come out pooh poohing the latest endeavor by democrats in the House of Representatives calling for another $3 trillion in virus aid spending. Specifically, AGC says while the bill is designed to stimulate the economy and includes benefits for construction firms and workers it fails to address some of the biggest challenges.
AGC CEO Stephen Sandherr says the democrats endeavor needs to address the situation that has developed over Paycheck Protection Program funding in that contractors complain that workers are earning so much in federal stay at home money they are refusing to return to their jobs thus hampering ongoing construction projects from proceeding.
Future of construction looks negative
AGC Chief Economist Ken Simonson, in an economic impact address with ConstructConnect, recently outlined a poor picture for the future. Releasing the latest survey of 800 AGC members Simonson said 67% report having a project delayed or cancelled since early March, citing the loss of 975,000 construction jobs — or 13% — since the virus outbreak began.
Simonson noted that 20% of construction projects slated to begin in May, June or later had been cancelled. He told the ConstructConnect audience he does not foresee construction keeping pace with other parts of the economy recovering any time soon.
ConstructConnect then projected a drop in summer construction starts by 27.4%. The entity then said GDP will be off by around 6%, and the quarter to quarter change is expected to decline an estimated 25% to 30%. It also estimated that put in place construction would fall some 6% to 8%.
Infrastructure construction presses on
Reopen, renew and revitalize. That's the slogan of the new campaign being pursued by ARTBA, the American Road and Transportation Builders Association. It's designed to encourage the Congress to make new infrastructure investments as the major catalyst for economic recovery from the COVID-19 virus.
Pushed by the Transportation Construction Coalition, the ARTBA campaign seeks a robust multi-year transportation bill from Congress that improves infrastructure, increases construction jobs and keeps the nation moving.
The states of California, Illinois, Iowa, Kansas and Florida are expanding their highway improvement efforts during the pandemic by taking advantage of lower traffic volumes. Florida DOT will accelerate schedules on more than 40 projects statewide with some expected to be completed two months early. FDOT says the accelerated work on $2.1 billion in projects should shave off 650 total contract days.
Meanwhile, the governor of Illinois has ordered $26 million in grant funding to be used to accelerate infrastructure projects to begin this summer. California reports a $54 billion budget deficit but has ordered Caltrans to accelerate highway projects. Funding from fuel taxes is expected to decline by $1.8 billion in the golden state, but highway improvements are continuing.
Dams break flooding central Michigan
An estimated 10,000 residents were forced to evacuate a large part of central Michigan recently as two dams gave way under unrelenting water pressure from rising rivers. The dams on the same river, the Tittabawasee, decimated the city of Midland — a community of 42,000 people — leaving behind 9-foot water levels.
Dow Chemical has a large complex on the riverbank under threat from the flooding. In 2018, the Federal Energy Regulatory Commission, FERC, revoked the dam license’s from the company that owned them, and they were in a sales process when the breech occurred.
In closing, the word communication comes from the Latin communico, meaning to share.
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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