from Mark Smith, Advocate, California Builders Alliance
Nationwide immigration raids underway
The Trump administration has initiated a nationwide immigration enforcement blitz, resulting in nearly 1,000 arrests. This operation, led by Immigration and Customs Enforcement, involves multiple federal agencies and targets individuals deemed public safety and national security threats. The effort is part of a broader strategy to increase enforcement and deportation activities across the country. Full Story: CNN
How to be legally prepared for Trump 2.0
This feature is a part of “The Dotted Line” series, which takes an in-depth look at the complex legal landscape of the construction industry. To view the entire series, click here.
Just a week into his second administration, President Donald Trump has already brought a raft of changes to the legal and policy landscape for construction. He signed a deluge of executive orders in the initial days of his presidency that have massive implications for labor, materials prices, permitting and project funding. That means builders will have a lot of issues to watch and plan for this year. To help cut through the noise, here are three areas of focus for the new administration — and how to prepare for them.
Dodge reports 2% drop in starts for Dec.
Construction starts fell 2% in December to a seasonally adjusted annual rate of $1.2 trillion, according to Dodge Construction Network. Nonresidential building starts rose 2% and residential building starts increased 4% but nonbuilding starts dropped 14%. For 2024, total construction starts were up 6% compared with 2023, with residential and nonbuilding starts each rising 7% and nonresidential starts increasing 4%. Full Story: Dodge Data & Analytics
Construction groups seek clarity on federal funding freeze
A federal district court granted a temporary injunction blocking a federal funding freeze until at least Feb. 3, preventing immediate disruptions to federal support programs. The Associated General Contractors of America is seeking clarity on the freeze's impact on construction projects. The National Utility Contractors Association is concerned that critical infrastructure work, including water and broadband, could face delays without further guidance. Full Story: Engineering News-Record (tiered subscription model) BBC
Expert: Anti-DEI order can't push out DBE programs
President Donald Trump's recent executive orders aim to eliminate diversity, equity and inclusion efforts in federal contracting, but programs such as the Small Business Administration's 8a and the Department of Transportation's Disadvantaged Business Enterprise cannot be ended by executive order alone, says attorney Chris Slottee. The programs, created by Congress, have adapted to legal challenges by removing race and sex as automatic criteria, potentially shielding them from the orders. Full Story: Construction Dive
Senate confirms Duffy as transportation secretary
Sean Duffy is Senate-confirmed as transportation secretary, with a strong bipartisan vote of 77-22. The former Wisconsin congressman is set to lead the Department of Transportation with a focus on regulatory cuts and infrastructure improvements. Full Story: The Associated Press
Federal Reserve Holds Rates Steady Following Three Consecutive Cuts Since September
The AP reports the Federal Reserve “left its benchmark interest rate unchanged Wednesday after cutting it three times in a row last year, a sign of a more cautious approach as the Fed seeks to gauge where inflation is headed and what policies President Donald Trump may pursue.” The Wall Street Journal reports the decision to leave “the benchmark federal-funds rate at its current range around 4.3% followed three consecutive rate cuts beginning in September, when the rate stood around 5.3%. With interest rates now ‘significantly less restrictive’ than they were before last year’s cuts, ‘we do not need to be in a hurry to adjust our policy stance,’ said Fed Chair Jerome Powell at a news conference after the meeting.” The Washington Post reports that in a statement released following their two-day meeting, the Fed “signaled general comfort about the overall economy, even though inflation remains ‘somewhat elevated.’” The New York Times reports Powell “signaled that he was open to additional cuts at some point but was clear that ‘strong’ growth and a ‘solid’ labor market meant the central bank could take its time.” Reuters reports the decision, combined with Powell’s remarks, “put Fed policy in a holding pattern at a time when the U.S. economic landscape seems both stable and wildly uncertain – with a healthy set of macroeconomic fundamentals that have changed little in recent months, but coming decisions from the Trump administration on immigration, tariffs, taxes and other areas that could prove disruptive.” Regarding Trump’s economic policies, Bloomberg reports Powell said, “The committee is very much in the mode of waiting to see what policies are enacted. We need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be.” CNN says, “Many investors still expect the Fed to continue cutting interest rates this year, with a few estimating no rate cuts at all in 2025. But every possibility remains on the table, including additional rate hikes.” Reuters has reactions to the Fed’s moves.
US Manufacturing Output Soars In December
Reuters reported that US manufacturing output “surged in December likely as production at Boeing picked up following the end of a crippling strike by factory workers at the aerospace giant.” The Federal Reserve said on Friday that factory output “increased 0.6% last month after an upwardly revised 0.4% rebound in November.” Factory production “was unchanged on a year-on-year basis in December,” while manufacturing “has largely stabilized in recent months after the U.S. central bank started cutting interest rates.”
IMF Upgrades Growth Forecasts For US Economy
The Washington Post reported that the International Monetary Fund on Friday said the US economy “will continue to be the developed world’s best performer in 2025, easily topping Europe and Japan.” The economy “is expected to grow this year at an annual rate of 2.7 percent, half a percentage point faster than the fund projected in October.” Nonetheless, the Wall Street Journal reported that the projections “underscore a potent formula that has powered the U.S. economy through a turbulent global backdrop: a stretch of strong productivity growth, a labor market that has softened but stayed resilient, and a largely effective policy response to rising prices from the Federal Reserve.”
Health care construction market appears strong
The construction of health care facilities in the US is expected to surge in 2025 and 2026, driven by the need for modernized infrastructure. Major projects include a $2.5 billion expansion of the MD Anderson Cancer Center in Austin, Texas; a $50 million neurological hospital at the University of South Carolina; and a $450 million specialized facility in Harrisburg, Pa. Full Story: For Construction Pros
Mixed-use projects to watch amid weak multifamily market
Developers are pursuing large-scale mixed-use projects despite a significant slowdown in multifamily starts. Notable projects include the $3 billion Willets Point redevelopment in Queens by Related Cos., the $3 billion Veridea in Apex, N.C., by RXR and the $1.8 billion South Pier in Tempe, Ariz., by Cantor Fitzgerald and Silverstein Properties. Other significant developments are Park Eight Place in Houston, the Esplanade in Pittsburgh, Peoria Place in Arizona and Habitat in Los Angeles. Full Story: Construction Dive
DOT aims to tie birth rates, immigration to funding
The Department of Transportation has issued a memo that, among many things, "to the maximum extent permitted by law," aims to prioritize federal transportation funding for states with high birth and marriage rates, while also requiring local compliance with federal immigration enforcement. Some have criticized the policy as politically motivated and potentially harmful to infrastructure investments. DOT is also looking to rolls back climate initiatives and prohibits vaccine and mask mandates for recipients of federal transportation funds. Full Story: Colorado Public Radio (1/31), WVIT-TV (West Hartford, Conn.)
NLRB General Counsel Abruzzo and NLRB Member Wilcox Fired On January 27, 2025, Jennifer Abruzzo was terminated from her role as National Labor Relations Board (NLRB) General Counsel. While her term was not scheduled to end until July 2025, former President Biden set a precedent for terminating NLRB General Counsels of the opposing party in 2021 when he terminated then-General Counsel Peter Robb within hours of his inauguration. It is likely that most, if not all, of Abruzzo’s memos will be withdrawn in the coming months. Deputy General Counsel Jessica Rutter is now Acting General Counsel until a replacement is announced. In addition to terminating Jennifer Abruzzo, Trump also fired Democrat NLRB Member Gwynne Wilcox, despite a law that forbids the firing of NLRB members without evidence of neglect or malfeasance. This leaves three seats open on the NLRB and a lack of a quorum, leaving the Board unable to issue new decisions or regulations. President Trump is expected to fill at least two of the seats with Republican nominees.
Trump's pipeline directive stirs controversy, uncertainty
President Donald Trump's energy emergency declaration instructs the US Army Corps of Engineers to use emergency powers to circumvent the Clean Water Act to fast-track natural gas pipeline approvals, a decision critics say weakens water protections and invites legal challenges. States have been using the Clean Water Act to block pipeline projects for climate policy reasons rather than water quality concerns, explained American Petroleum Institute Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer, noting that the impact of the Army Corps directive remains uncertain. Full Story: E&E News
Judge Rules Against Biden PLA Mandate
A U.S. Federal Claims judge has ruled in favor of a group of construction companies that filed protests against the implementation of former President Joe Biden’s December 2023 executive order that mandated project labor agreements on federal contracts over $35 million. In a briefing earlier this month, Judge Ryan Holte of the U.S. Court of Federal Claims said the implementation of the mandate on seven contract procedures last year ignored federal agencies’ own research indicating PLAs would be anti-competitive and relied on “arbitrary and capricious” presidential policy. The Jan. 21 ruling only impacts those specific bid protests filed in 2024, but construction employer groups touted it as a win for the entire industry. It opens the door for more challenges and puts the future of the rule in question, said Dirk Haire, Washington, D.C.-based partner at Philadelphia-headquartered law firm Fox Rothschild, which represented some of the plaintiffs. Story
Changes to Retention Proposed
Senator Dave Cortese is author of Senate Bill 61, which applies the limits on retention on public works to private work. Existing law mandates that an owner must pay retention withheld from a direct contractor for private work within 45 days after completion. SB 61 introduces a limit on retention payments for such contracts. It prohibits the retention held by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from another subcontractor, from exceeding 5% of the payment for the private work.
GE Johnson to operate under DPR Construction brand
Four years after being acquired by DPR Construction, GE Johnson is adopting DPR branding. "It's the same talented builders on the job every day, but with a new name and even better reach," says Scott Miller, Mountain States business unit leader at DPR. Full Story: BizWest (Colorado)
Data interoperability key for 2025 projects
The construction sector has a critical need for data interoperability this year due to project complexity and collaboration demands. A trend towards open system technologies trend reflects the industry's shift to advancements that enhance productivity and innovation. Full Story: Construction Briefing
Scott Hollyfield's story: A call to equip jobsites with life-saving overdose medication
Scott Hollyfield is a shining example that no one is beyond hope or a second chance. His powerful testimony should serve as a wake-up call for our industry to act. Addiction doesn’t discriminate, every life is worth saving. Listen to Scott's story and visit go.agc.org/mhsp to learn more about how Naloxone/Narcan can save a life on your project or in your community.
Construction sustainability comes to the US
Skanska USA, Fluor, Burns & McDonnell and other major contractors have brought the Supply Chain Sustainability School to the US to educate construction professionals on sustainability challenges. The initiative, which has been successful in the UK, Ireland and Australia, offers free online training on topics such as energy, carbon, waste management and biodiversity. Full Story: Construction Dive
Granite wins $88M contract for Calif. highway work
Granite Construction has secured an $88 million contract from the California Department of Transportation to improve a section of Ortega Highway State Route 74. The project, funded by state and federal governments, involves widening the roadway, installing rumble strips and resurfacing to enhance safety. Work is expected to begin in April and be completed by November 2026. Full Story: The Construction Broadsheet
Photos: Calif. high-speed rail reaches milestone
New photos show California's high-speed rail project has reached a significant milestone with Dragados-Flatiron Joint Venture completing the Fargo Avenue overcrossing in Kings County, part of the track-laying phase that began this month. The project, which aims to connect the entire state by 2050, has created 14,500 construction jobs but has also faced delays and budget issues. "With aggressive goals for small business participation, including Disadvantaged Business Enterprises, Disabled Veteran Business Enterprises, and Micro-Businesses, as of October of 2024 more than 880 certified small businesses worked on the high-speed rail program statewide," a project spokesperson said. Full Story: Newsweek (tiered subscription model)
---------------------------------------------------
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
