from Mark Smith, Advocate, California Builders Alliance
Recovery Progress: California Numbers Show Substantial Weakening
The August numbers show substantial weakening in the state numbers. Nonfarm jobs (seasonally adjusted) were up by 23,100, but July’s respectable gain of 27,900 was slashed to only 8,900 in the monthly revision.
The preliminary benchmark revisions for March 2023 further indicate that the overall 2023 job numbers will likely be lower than previously reported to date. California showed the largest revision among the states, with the adjustment putting total nonfarm jobs 197,800 lower (-1.1%). This outcome indicates average jobs growth from April 2022 to March 2023 would plunge from 29,900 monthly to only 13,400. California’s adjustment also represents about two-thirds of the total preliminary revision (-306,000) to the national numbers. Both Texas (-15,000) and Florida (-9,700) showed much lower change.
The preliminary benchmark revisions are done only for March 2023 from the actual job counts from the Quarterly Census of Employment and Wages. The results will be broadened in the annual revisions to be released in March 2024 for the period 2019 through 2023.
The employment numbers were even more disappointing. Total employment (seasonally adjusted) dropped the second month in a row, down 27,900. The August number essentially reversed the 2023 gains, putting employment just below the June 2022 total.
House Speaker Warns Republicans About Impact Of Shut Down
Reuters reports that House Speaker McCarthy “warned members of his caucus on Thursday that they could suffer a political toll if they allow the government to shut down early next month amid a fight over spending.” He told reports following a closed-door party meeting, “Nobody wins in a government shutdown.” McCarthy “said that after this weekend he plans to keep the House in session until it passes funding to keep the government funded past Sept. 30, when its current funding expires.” Rep. Don Bacon (R-NE), “a moderate voice in the caucus, sounded a similar note.” He said, “It’s a mistake to shut down the government. It’s so shortsighted to be pushing for a shutdown. So whatever I can do to stop it I am.”
Axios reports that McCarthy, “increasingly vexed with hardliners in his party blocking his efforts to pass government funding bills, is challenging his detractors to make good on their threats to try to remove him.” Speaking during a closed-door GOP conference meeting Thursday morning, McCarthy said, “If you want to file the motion [to vacate], file the f***ing motion.” Rep. Matt Gaetz (R-FL) said, “Sounds like [Speaker McCarthy] is having a total normal one – not rattled at all.” Bloomberg reports similarly.
Also reporting are the Wall Street Journal and Politico.
Rep. Chip Roy Working On Plan To Avoid Shutdown Bloomberg reports that Rep. Chip Roy (R-TX) “is working to find a compromise spending bill that would allow Congress to avoid a government shutdown, according to a person familiar with his efforts.” Bloomberg says “Roy and his allies are trying to garner enough support for a package containing a modified Defense spending bill, a Justice Department spending bill with gun policy provisions and a border bill that would also fund the government in the short-term.” The proposal “would be unacceptable to the Democratic-led Senate but passing it in the House could be the first step to a compromise stopgap bill.”
Yellen "feeling very good" about odds for soft landing
Treasury Secretary Janet Yellen has expressed confidence that the economy will experience a soft landing with inflation. "I am feeling very good about that prediction. I think you'd have to say we're on a path that looks exactly like that," Yellen said while returning from a Group of 20 summit in New Delhi. Yellen has also said China has "policy space" to address economic troubles, which are having global ramifications.
Full Story: Bloomberg Financial Times
AGC seeks means to cut CO2 without harping on ESG
The Associated General Contractors of America's new Task Force on Decarbonization and Carbon Reporting is focusing on hands-on action to develop a playbook on carbon reporting for the construction industry this year. The goal is to serve a key component of the environmental, social and governance movement without explicitly promoting it while setting aside climate skepticism with practical steps to curb carbon emissions before and during construction. Full Story: TriplePundit
Senate bill seeks higher minimum wage, E-Verify mandate
The national minimum wage would increase to $11 an hour and all employers would have to use E-Verify under a Senate bill introduced by six Republicans. The E-Verify requirement would be phased in, beginning with companies employing at least 10,000 workers, and would impose penalties for violations. Full Story: Construction Dive
Inflation up 3.7% year over year in Aug.
The consumer price index increased 3.7% in August compared with August 2022, according to the Labor Department, marking the second consecutive increase and the biggest one in 2023. Markets largely shrugged off the increase Wednesday, with Treasury yields declining and the S&P 500 closing up slightly. Full Story: CNBC Financial Times Yahoo The Wall Street Journal
Construction earnings outpace inflation
Median weekly earnings reached a record high in April for full-time construction and extraction jobs, with roofer helpers experiencing the fastest-growing wages among trades, according to the Bureau of Labor Statistics. The $982 median figure was up 7.6% year over year, when inflation was at 4.9%, although over a five-year period, construction wages were down 2% when adjusted for inflation.
Full Story: St. Joseph News-Press (Mo.) (tiered subscription model)/Lattice Publishing
August jobless rates up in 10 states, down in 2; payroll jobs up in 5 states, down in 3
In August, unemployment rates were higher in 10 states, lower in 2 states, and stable in 38 states and the District of Columbia. Nonfarm payroll employment increased in 5 states, decreased in 3 states, and was essentially unchanged in 42 states and the District.
PPI for final demand advances 0.7% in August; goods rise 2.0%, services increase 0.2%
The Producer Price Index for final demand increased 0.7 percent in August. Prices for final demand goods rose 2.0 percent, and the index for final demand services advanced 0.2 percent. Prices for final demand moved up 1.6 percent for the 12 months ended in August.
CPI for all items rises 0.6% in August; gasoline and shelter up
In August, the Consumer Price Index for All Urban Consumers increased 0.6 percent, seasonally adjusted, and rose 3.7 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.3 percent in August (SA); up 4.3 percent over the year (NSA).
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Architecture Billings Index slips in Aug.
A slight softening is marked in August's Architecture Billings Index with a score of 48.1, extending a string of subgrowth figures to 11 months. Gains were reported in the commercial/industrial sector, but the institutional and multifamily components were down in the index by the American Institute of Architects. Full Story: Archinect
Aug. new-home construction lowest since June 2022
High mortgage rates weighed on the market for new homes as construction declined in August, according to the Census Bureau. New-home construction fell to the lowest level since June 2022, with an 11% decline compared with July. Full Story: News 12 Bronx (New York City) (tiered subscription model)
Nonresidential boosts construction starts in Aug.
A 40% jump in the nonresidential category anchored a 6% increase in total construction starts in August for a seasonally adjusted annual rate of $1.3 trillion, according to Dodge Construction Network. Manufacturing and transportation construction boosted the nonresidential gain, overcoming a 1% decline in residential and a 14% decline in nonbuilding. Full Story: Dodge Data & Analytics
Commercial developers turn to private lending
Private lending might be costlier but avoids institutional lenders' underwriting process and, as such, has attracted the attention of more commercial developers. The problem is traced to higher interest rates, as well as higher costs for materials. Full Story: Miami Today
Amtrak triples annual infrastructure spending
To double ridership by 2040, Amtrak is tripling annual investment to $6 billion by fiscal 2025. Overall, $50 billion in infrastructure spending is planned, says Laura Mason, executive vice president of capital delivery. Mason's department is doubling in size to handle the added work. Full Story: Engineering News-Record (tiered subscription model)
AGC: Increase in construction costs driven by diesel
A jump in diesel prices lifted nonresidential construction costs by 1.1% in August compared with July, according to an analysis by the Associated General Contractors of America. AGC also notes a continued shortage of qualified labor, as well as a 34.6% price surge for diesel that Chief Economist Ken Simonson says has since continued. Full Story: Bulk Transporter
Outlook bright for US gas supplies, but hurdles remain
As estimates of future US gas supplies continue to rise, attention is turning to the need to address potential growth barriers, including inadequate pipeline infrastructure, permitting delays and labor shortages. These challenges can cause wells to remain inactive for extended periods, according to Potential Gas Committee President Kristin Carter. Full Story: Energy Intelligence
EPA accelerates local project reviews over water issues
The Environmental Protection Agency has streamlined its process for project reviews as the agency restores local reviews of federal permits for projects that affect water resources. The EPA responded to complaints from the construction industry and others regarding potential delays because of lengthy reviews of infrastructure projects. Full Story: Engineering News-Record (tiered subscription model)
Union work specified for $1.3B Calif. airport project
The Sacramento County, Calif., Board of Supervisors has overridden concerns about higher costs and specified that primarily union members will carry out construction for a $1.3 billion project at Sacramento International Airport. Opponents say the project labor agreement will discourage nonunion contractors from bidding for the renovation and expansion work. Full Story: The Sacramento Bee (Calif.) (tiered subscription model)
$100M yearly sought to upgrade US-Mexican sewage plant
The International Wastewater Treatment Plant in the San Diego area would receive $100 million annually for construction to renew and expand the facility under legislation introduced by Rep. Scott Peters, D-Calif. Mexico and the US jointly run the plant, which has been sending pollution into the Pacific Ocean, requiring beach closures. Full Story: Times of San Diego
U. of Calif. campus adds building with lecture halls
A $70 million classroom and lecture hall building at the University of California at Santa Barbara is ready to go. C.W. Driver has finished the 95,000-square-foot facility, which includes five lecture halls and 32 spaces serving a variety of functions. Full Story: Construction Dive
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
