Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
According to current budget baseline projections the nation's Highway Trust Fund will be dry by next year. The Independent Congressional Budget (CBO) Office claims that without any congressional action spending will exceed income by $18 billion in 2021 and will grow to $502 billion in 2030. Over the nine year period CBO projects a Highway Trust Fund budget deficit of $2.3 trillion.
Funding levels for the Highway Trust Fund, which pay for highway construction projects and transit system operations, are set to expire September 30. Eighty-eight construction oriented trade groups have signed a joint letter to the Congress urging a one year extension of the FAST Act.
Lawmakers are said to be considering a continuing resolution to cover existing fund payments, but nothing concrete has occurred.
Pandemic continues to affect construction numbers
The nation's unemployment level has dropped to 8.4% as a result of more jobs opening up in the pipeline. The recovery from a high of 10.2% in August remains high with about half the 22 million jobs lost during the pandemic now recovered. The latest unemployment jobs level has been holding steady in the 800,000 range.
1.4 million new jobs were added in August, a reduction from the 1.7 million recovered in July with the Labor Department reporting that many jobs have been lost forever.
Construction gained 16,000 jobs in August, but the Bureau of Labor Statistics reports the industry has lost 294,000 jobs overall. Associated Builders and Contractors reports that construction has gained 658,000 jobs, or 60%, since the virus struck.
If the unemployment rate keeps dropping as economists anticipate it could reach the 7% level by November.
The latest contractor survey by AGC finds some interesting results as they relate to the coronavirus pandemic. Harm to the nation's contruction industry is widespread according to those who build. Sixty-two percent report project delays or cancellations while 51% say they having problems finding craft workers to fill the jobs necessary during the pandemic.
The survey, conducted by AGC and Autodesk, paints a picture of an industry in need of immediate recovery measures. AGC Chief Economist Ken Simonson points out that over the past 12 months 41% of firms have reduced workforce as a result and 38% report that it will take at least six months to reach the level of business volume attained a year ago.
The latest from Dodge Data indicates that the report for nonresidential building projects in planning is inching upwards. The August summary shows the Dodge increased 1.8% to 126.5 on its scale. The commercial component rose 3.3% while institiutional dropped 1.2%. Dodge Analytics says its monthly report incidates that construction is slowly recovering but unsteady.
Lumber mill shutdowns combined with increased demand has sent lumber prices nationwide soaring. The price for September delivery has risen 3.1% to $641.60 per thousand board feet, a jump of $19 since August and to its highest level since 2018. The cost of lumber dropped substantially last spring when mills closed at the height of the pandemic, and when they reopened in July the price began to rise and hasn’t stopped.
Residential do-it-yourself projects along with remodeling projects are said to be leading the price escalation.
A planned $600 million expansion of the Orange County Convention Center in Orlando, FL, is not going to happen. The loss of millions in tax revenue derived from convention goers and tourists in the area has forced officials to backtrack from the planned project. Already at 7 million square feet, the Orange County Center is the second largest in the U.S.
The collapse of hotel and tourist taxes as a result of the pandemic forced county officials to cancel the planned addition of a million square feet until further notice.
The pandemic has not caused any problems with an ongoing effort to construct a mass timber project in Milwaukee, WI. A 25-story, 259-unit apartment building known as Ascent is underway in the beer city. Using layers of wood pressed together to create columns, beams and other building frame components the mass timber structure is said to be the tallest of its kind in the world. Among other features it creates a lower carbon footprint than conventional construction and is able to display exposed wood interiors.
The $80 million structure should be completed in 2022.
In closing, adversity is the springboard to great achievement.
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