from Mark Smith, Advocate, California Builders Alliance
Contractors expect strong 2025 despite tariff concerns
A new report from the Associated General Contractors of America and Sage reveals contractors are optimistic about 2025, driven by lower interest rates and a favorable regulatory environment, according to a survey by the Associated General Contractors of America. Respondents believe the markets for water infrastructure and data centers are particularly strong, while retail and private office construction seem less promising. Seventy-one percent of respondents cite worker quality as a top concern, with 64% noting a shortage of workers and subcontractors and 61% worried about rising labor costs. Material costs also remain a concern, particularly regarding potential tariffs. Full Story: Daily Journal of Commerce (Portland, Ore.) Nebraska Public Media WPBF-TV (Palm Beach Gardens, Fla.)
Construction job openings fall 40% YOY in Nov.
Construction job openings saw a significant decline in November, with a 40% drop compared to the same month in 2023, according to the Bureau of Labor Statistics. Despite a slight uptick of 17,000 positions from October to November, the overall number of open jobs remained much lower than the previous year. Full Story: Construction Dive
Construction employment up, but challenges persist
Construction employment rose in 234 of 358 metro areas from November 2023 to November 2024, with Houston-The Woodlands-Sugar Land, Texas, and Anchorage, Alaska, areas leading the gains, according to the Associated General Contractors of America. However, without workforce authorization reform, contractors will continue struggling to find qualified workers in 2025, since Ken Simonson, chief economist at AGC. Full Story: Associated General Contractors of America
Construction spending flat in November as jobs rise
Construction spending in November remained flat at $2.15 trillion, with private nonresidential spending up 1.7% year over year and public construction up 4.6%, according to the Census Bureau. Meanwhile, construction employment increased in 65% of metro areas, with significant gains in Houston and Northern Virginia, according to the Bureau of Labor Statistics. Full Story: Construction Citizen
Contractors face labor shortage amid job growth
Construction employment rose in 65% of metro areas between November 2023 and November 2024, with significant gains in Houston and Northern Virginia, according to the Associated General Contractors of America. However, contractors are struggling to fill craft positions, especially as retirement-age workers leave the industry. AGC is calling for increased federal funding for skills training to address the shortage. Full Story: The Air Conditioning, Heating and Refrigeration News
3 ways construction can avoid a $40T shortfall
The global construction industry faces a cumulative $40 trillion shortfall in meeting demand by 2040 due to labor shortages, poor productivity growth and limited adoption of modern techniques like modular construction, according to McKinsey. Analysts partners suggest companies can address these challenges by upskilling the workforce, building robust supplier ecosystems and reforming project management practices to boost efficiency and innovation. Full Story: Construction Dive
Dodge Momentum Index jumps 10.2% on commercial planning
The Dodge Momentum Index increased 10.2% in December, driven by a 14.2% rise in commercial planning, particularly for data centers and warehouses. Institutional planning rose 2.5%. Major projects included the Powerhouse 95 data center in Virginia and the OhioHealth Outpatient Cancer Center in Ohio. Full Story: Dodge Data & Analytics
Are you ready for up to $800M in annual tariffs?
US tariffs under President-elect Donald Trump could reach $800 billion annually, significantly impacting construction costs, according to a PwC roundtable. Companies are advised to analyze and adjust supply chains, invest in AI and consider mergers and acquisitions to mitigate the effects. Full Story: Construction Briefing
Experts: Trump policies might not be overly inflationary
Economists, including former presidential advisers, have revised their initial assessment of President-elect Donald Trump's economic plans, suggesting they may not be as inflationary as originally thought. However, these experts warn that any attempt by Trump to exert control over the Federal Reserve could potentially reignite price pressures. Despite uncertainties surrounding Trump's upcoming presidency, he will inherit an economy with strong growth, low unemployment, and reduced inflation, though his proposed policies on tariffs, taxes, and immigration could still impact economic conditions. Full Story: Reuters
Trump's return could lead to more infrastructure P3s
The construction industry is optimistic about infrastructure under President-elect Donald Trump, despite concerns about tariffs and deportation. Trump is expected to focus public-private partnerships, traditional infrastructure projects and rural areas while potentially altering fundings for Infrastructure Investment and Jobs Act, experts say. The administration might also expedite permitting by weakening the National Environmental Policy Act and increase oversight to reduce fraud and waste. Full Story: Construction Dive
Trump vows to reverse Biden's offshore drilling ban
President-elect Donald Trump has pledged to reverse President Joe Biden's recent ban on offshore drilling along most of the US coastline on his first day in office. Biden's ban, issued under the Outer Continental Shelf Lands Act, protects 625 million acres of ocean. Trump's attempt to reverse a similar ban by the Obama administration was struck down by a federal court, requiring congressional action. Full Story: CNBC
US natural gas poised for growth under Trump
The US natural gas industry is poised for significant growth as new LNG hubs are expected to come online with President-elect Donald Trump set to take office. The industry anticipates a supportive administration that will fast-track infrastructure projects, potentially leading to increased exports and development. Despite previous constraints due to public aversion and permitting challenges, the market is optimistic about future LNG facilities and their ability to meet global demand. Full Story: The Wall Street Journal
Trump plan to halt wind development draws criticism
President-elect Donald Trump on Tuesday reaffirmed plans to halt wind projects, saying that "[w]e're going to try and have a policy where no windmills are being built" because "[y]ou don't want energy that needs subsidy." Fossil fuel subsidies, meanwhile, rose to record highs in 2022, per the International Energy Agency. However, experts have questioned Trump's ability to slow wind development. Full Story: The Hill
Turner, Mortenson kick off 2025 with new CEOs
Tutor Perini has appointed Gary Smalley as CEO, recognizing his nearly decade-long contributions to the company's growth and profitability, while Ronald Tutor transitions to executive chairman. Meanwhile, at Mortenson, new CEO Derek Cunz is focused on continuing the company's enduring culture of innovation, DEI efforts and long-term growth strategy. Full Story: Construction Dive Construction Briefing
ESOPs could be attractive amid tax uncertainty
Construction company owners are proactively planning for succession amid potential tax changes that could reduce the lifetime estate and gift tax exemption from nearly $14 million to $7 million per person in 2026. Employee stock ownership plans are a popular tool, offering tax advantages and facilitating smoother transitions. "The combination of high exemption levels, flexible ESOP structures and the industry's strong collaborative culture creates an opportunity for thoughtful transition planning that benefits owners, employees and company legacy," writes Anita Mahamed, a partner at Wipfli. Full Story: Construction Dive
Handyperson Exemption to Increase to $1,000 in 2025
SACRAMENTO, CA – A new law will raise the threshold for work requiring a contractor’s license from $500 to $1,000.
Assembly Bill 2622 (Carrillo, Chapter 240, Statutes of 2024), effective January 1, 2025, will allow an unlicensed person to complete small projects up to $1,000 without obtaining a contractor’s license if they do not hire workers and no building permits are needed. If a consumer’s project under $1,000 requires workers or permits, a contractor’s license in the appropriate license classification is required.
The new law states that a person who is not licensed may advertise for construction work if the total contract price for labor, materials, and all other items on a project is less than $1,000. The $1,000 includes all costs associated with the project. The advertisement must state the person is not licensed.
As with any home improvement construction project, CSLB cautions that a down payment should not exceed 10 percent of the contract price, and any subsequent payments should not exceed the value of the work completed or the materials delivered.
If an unlicensed person provides a bid greater than $1,000, performs work requiring a permit, or employs any workers, that person is subject to legal action. Penalties for unlicensed contracting include administrative fines of up to $15,000, jail sentences of up to six months, and fines up to $5,000. Repeat offenders may face a mandatory 90-day jail sentence and a fine of $5,000 or 20 percent of the contract price, whichever is greater.
California sets $310B plan for high-speed rail network
California has unveiled a $310 billion plan to build a high-speed, zero-emission rail system over 25 years, connecting major cities and reducing reliance on cars and air travel. The project, which could create up to 900,000 jobs, aims to increase rail travel by 18%, shifting 200 million daily passenger miles from highways. Full Story: Construction Briefing
Nev.-to-SoCal high-speed rail project close to construction
Brightline West is moving closer to construction on its $12 billion high-speed rail project connecting Southern Nevada and Southern California, with plans to begin in 2025 and have the system operational by the 2028 Los Angeles Olympics. According to Nevada Department of Transportation Director Tracy Larkin Thomason, the project is advancing through permitting, design and estimation work, alongside geotechnical surveys and right-of-way preparations, ensuring readiness for simultaneous civil construction across multiple work zones. Full Story: Las Vegas Review-Journal (tiered subscription model)
Interior Dept. allocates $514M for Western water projects
The Department of the Interior is investing $514 million in water infrastructure projects across four Western states, aiming to provide clean drinking water to communities. The Arkansas Valley Conduit project in Colorado receives the largest share, $250 million, to replace contaminated groundwater and deliver safe water to 50,000 people. Other significant projects include the Sites Reservoir Project and B.F. Sisk Dam Raise in California. Full Story: The Construction Broadsheet
Kiewit-Parsons finishes $1.5B Calif. light rail project
A joint venture of Kiewit and Parsons has reached substantial completion on a $1.5 billion light rail line between Glendora, Calif., and Pomona, Calif., on time and on budget despite challenges such as the pandemic and extreme weather conditions. The design-build project, which received significant funding from Los Angeles County's Measure M and Measure R sales taxes, included the construction of new light-rail systems, four stations, and multiple infrastructure enhancements. Full Story: The Construction Broadsheet
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Mark Smith
Advocate
California Builders Alliance
5370 Elvas Avenue ǀ Sacramento, CA 95819
Cell: 916.335.5072
Email: mark.smith@calbuilders.org
Email: mark@smithpolicygroup.com
