Capitol Update - January 14, 2022

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from Mark Smith, Advocate, California Builders Alliance 
Supreme Court blocks OSHA vaccine mandate for large employers

The U.S. Supreme Court issued a stay on the Occupational Safety and Health Administration's COVID-19 vaccination emergency temporary standard in a per curiam decision published Thursday. "OSHA has never before imposed such a mandate," the court said. "Nor has Congress. Indeed, although Congress has enacted significant legislation addressing the COVID–19 pandemic, it has declined to enact any measure similar to what OSHA has promulgated here." Associate Justices Neil Gorsuch, Samuel Alito and Clarence Thomas issued an opinion concurring in the decision while Associate Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented. However, the court issued a separate per curiam opinion dissolving injunctions placed on a vaccination mandate for healthcare workers issued by the Centers for Medicare and Medicaid Services. 

PPI for final demand advances 0.2% in December; services rise 0.5%, goods decrease 0.4% 

The Producer Price Index for final demand increased 0.2 percent in December, as prices for final demand services advanced 0.5 percent and the index for final demand goods decreased 0.4 percent. Final demand prices rose 9.7 percent in 2021.  

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CPI for all items rises 0.5% in December; shelter and used cars and trucks up, energy down 

In December, the Consumer Price Index for All Urban Consumers rose 0.5 percent, seasonally adjusted, and rose 7.0 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.6 percent in December (SA); up 5.5 percent over the year (NSA). 

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Construction added 22K jobs in Dec., 160K in 2021

Most construction sectors experienced job gains in December as the industry grew by 22,000 jobs, according to the Bureau of Labor Statistics. It was the fourth consecutive month of improvement and rounded out a year in which the industry added 160,000 jobs. Full Story: Engineering News-Record (tiered subscription model) 

Powell: High inflation threatens economic recovery

Sustained inflation is a "severe threat" to the labor market, and the economy no longer needs easy-money policies that supported it earlier in the pandemic, Federal Reserve Chair Jerome Powell said in his Senate confirmation hearing. "It is really time for us to begin to move away from those emergency pandemic settings to a more normal level," Powell said. "It's a long road to normal from where we are." Full Story: The Wall Street Journal  The Associated Press 

Cautious optimism hangs over 2022 construction season

Ken Simonson, chief economist for the Associated General Contractors of America, says he is "nervously optimistic" about the construction industry's prospects for 2022, citing an upswing in nonresidential construction and an improved outlook for material prices marked by price volatility instead of a steadily upward trend. Simonson is more concerned about contractors' ability to combat an endemic labor shortage amid a shifting vaccine mandate landscape. Full Story: Construction Dive (1/10)

Experts fear some areas can't compete for project funds

Academic experts have expressed concern that the nature of the competitive and discretionary grants under the bipartisan infrastructure law could lead to rural areas not getting an even share of funds. They fear the grants are structured in a way that naturally favors large metro areas with greater bandwidth to properly procure federal aid. Full Story: Governing 

2022's biggest construction conferences

While the COVID-19 omicron variant continues to spread, with vaccinations and booster shots available, many in-person conventions are back on for this year. Read on for a list of major construction conferences, their dates and locations and a short description of what they offer. Please check conference websites as time goes on, as plans are subject to change. 

7 things we know (so far) about the infrastructure act

With the signing of the Infrastructure Investment and Jobs Act, 2022 is shaping up to be a huge year for infrastructure. About $125 billion of these new federal funds will be available for procurement, according to Federal News Network, and it's important for contractors to understand where they're directed, the strings attached, when they will be disbursed and more.

While details are still emerging about the IIJA, here are seven things to keep in mind: 

Report: Materials prices soared 20% in 2021

Although the prices of some raw materials fell in December, costs are still sky high for contractors looking to purchase them, according to a new analysis by the Associated General Contractors of America. Overall, the price of construction materials jumped nearly 20% in 2021, the group said Thursday. The price index for steel mill products rose 0.2 % in December, its smallest rise in 15 months, but soared 127.2% over 12 months, according to a press release from the AGC shared with Construction Dive. The index for diesel fuel declined 5.3% for the month but increased 54.9% for the year. The index for aluminum mill shapes slid 4.9% in December but rose 29.8% over 12 months, while the index for copper and brass mill shapes fell 3.3% in December but rose 23.4% over the year. With an influx of new civil projects on the horizon with funding from the federal infrastructure act, contractor optimism is high for the coming year, according to a separate member surveyfrom the AGC. The association found that 74% of surveyed firms planned to hire in 2022 despite supply chain issues and other challenges. 

Congressional panels working on a new WRDA

The US Army Corps of Engineers will be in line for billions of dollars of funding as key congressional committees formulate a new Water Resources Development Act. The corps is recommending 14 projects, the largest of which is a Texas coastal protection plan that includes a $26.1 billion storm surge barrier system on Galveston Bay. Full Story: Engineering News-Record (tiered subscription model) 

Contractor optimism high entering 2022, per AGC report 

Contractors are optimistic for 2022, according to a member survey from the Associated General Contractors of America. The net reading — or percentage of respondents who expect the available dollar value of new work to expand compared to the percentage who expect it to shrink — is positive for 15 out of 17 categories from AGC's survey. That is a stark turnaround from 2021, where respondents had negative expectations in most sectors. Indicative of that optimistic outlook, AGC found 74% of firms intend to hire in 2022, despite supply chain challenges that are slowing project starts and previous labor shortages. 

NLRB may redefine independent contractor

A narrower definition of what constitutes an independent contractor may be forthcoming as the National Labor Relations Board weighs whether to change the parameters established under the Trump administration. A new definition could open the door to more unionization, according to D. Albert Brannen, partner in the Atlanta law firm Fisher & Phillips. Full Story: The Construction Broadsheet   

How higher rents, rising values will drive multifamily construction in 2022

While the COVID-19 pandemic has hammered many areas of commercial real estate, the multifamily sector has emerged as a clear winner. Although apartment rents plummeted in the early months of the pandemic, they quickly recovered in early 2021. These rent increases set the stage for an equally robust sales market that drove up the prices of apartment communities. Rent and valuation growth, taken together, create fertile ground for development. But just because apartments are making money doesn't mean the year ahead will be easy. Industry executives, particularly on the development side, see a number of challenges and opportunities in the new year. Here, Construction Dive looks at the most important factors for the multifamily sector in 2022. The apartment industry's COVID-19 slump didn't last long. In the first quarter of 2021, demand doubled the usual 25,000 units normally seen during that time of the year. By the summer, the apartment industry was seeing record-high rent increases. However, Joe Lubeck, CEO of Florida-based apartment owner and manager American Landmark Apartments, doesn't think these double-digit increases are sustainable into 2022, particularly with inflation.  "People are paying more for food, and more for gas and everything else," he said. Jay Parsons, vice president and deputy chief economist at RealPage, agrees that rent growth may moderate this year.  "We're forecasting national growth in the high single digits," Parsons said. "Those are still big numbers by comparison of most years, but we probably won't be touching the 16% or 17% range we saw [in 2021]." In some metros, another factor limiting growth could be rent control legislation. Measures capping increases emerged in a number of markets around the country. For example, in November, Minneapolis voters gave the city council the ability to put rent controls in place, while St. Paul residents passed a ballot measure to cap most rent increases at 3% annually. 

Calif. area in for a busy construction season

The last full year of construction on Southern California's 405 Freeway upgrade is one of several road projects planned in the Orange County region. Others include widening of the 5 Freeway and the Orange County streetcar. Full Story: The Orange County Register (Anaheim, Calif.) (tiered subscription model) 

Calif. budget targets ports for $2.3B in spending

California Gov. Gavin Newsom is looking to make its supply chain more resilient through $2.3 billion for seaport upgrades, $1.2 billion of which would be used for projects such as railyard expansion, bridges and efforts to negate emissions. Passage of Newsom's budget would put the state roughly in line with the federal government's investment in port infrastructure. Full Story: The Maritime Executive 

A look at 7 billion-dollar-plus hospital projects

A 15-year medical campus project at the University of California at San Diego valued at $2.5 billion to $3 billion has the highest price tag among seven $1 billion-plus construction projects at hospitals and health systems announced in the past three months. Marissa Plescia summarizes this and the six others. Full Story: Becker's Hospital Review



Mark Smith


California Builders Alliance

5370 Elvas Avenue ǀ Sacramento, CA 95819
Cell: 916.335.5072


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