from Mark Smith, Advocate, California Builders Alliance
SUNNY DISPOSITION, CLOUDY REPUTATION
The LA Times brings us the latest episode in America's favorite drama: “Everybody Loves (or Hates) California.” Spoiler alert: We’ve still got some pull, but the state itself should probably come with a trigger warning for Republicans. First up, California as a role model? 39% of U.S. residents are chuckling at the thought, probably while sipping less expensive coffee in a state with more reasonable rent. A paltry 15% are waving California flags, and let’s be honest, they might just be in Maryland saddled with a horrifically ugly flagand they like our bear. The remaining 46% are on the fence, enjoying our weather and cultural hegemony from a distance. Now, let's talk about where everyone agrees: the Golden State's golden price tag. A whopping 87% agree that it’s too expensive to live here. (They’re not wrong!) Diversity? 76% nod approvingly. Tourist destination? 65% are packing their bags, probably for the Instagram opportunities. But only 37% think it’s a good idea to raise a family here, and let's not forget the 52% who believe it’s an unsafe place across the board. Considering moving? Only the bold 23% are willing to brave the wild west of real estate and politics, primarily drawn by jobs and that eternal sunshine. The rest — 77% — are giving a hard pass, their reasons ranging from lifestyle mismatches to not vibing with our unique blend of azure politics with a few red polka dots. Now, for the juicy bit: We’re a partisan piñata. Troublingly, nearly 50% of Republicans across the country believe that California is “not really American,” according to the poll. Perhaps we should take those concerns with a boulder-sized grain of salt though: Nearly a third of GOP respondents believe that California — the land of Yosemite, Big Sur, Sequoia and the Mendocino coast — has a “worse natural environment than most states.” A third of Republicans also believe that the home of the UC system, Stanford, Cal Tech and USC has “worse colleges and universities than most states.”
Payroll employment rises by 275,000 in February; unemployment rate increases to 3.9%
Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.
Federal Reserve’s Preferred Inflation Gauge Showed Strong Uptick In Prices Last Month
CNBC reports that according to data released Thursday by the Department of Commerce, the Personal Consumption Expenditures price index in January rose 0.3% on a monthly basis and 2.4% on an annual basis. The core PCE, which excludes volatile food and energy expenditures “increased 0.4% for the month and 2.8% from a year ago.” In the overall PCE, Food prices “accelerated 0.5%, offset by a 1.4% slide in energy. On a year-over-year basis, food was up 1.4% while energy fell 4.9%.” Axios says the PCE “confirms that a trend of cooler price increases that defined much of last year came to a halt last month – a warning that beating inflation might take longer than previously thought.” Bloomberg notes that the core PCE is the Federal Reserve’s “preferred gauge of underlying inflation,” and its increase helps “explain policymakers’ patient approach to start cutting interest rates.” In its reporting, the New York Times portrays the new data as a sign that inflation continues to “cool,” highlighting the drop in the core PCE’s annual reading to 2.8% in January from 2.9% in December. Still, the Times says that overall, “the data provide further evidence that while inflation continues to come down, the path back to normal could remain at least somewhat bumpy.” Still, Reuters reports that Federal Reserve bankers “are looking through recent data showing price pressures rebounded last month, and are focusing instead on overall progress on inflation that they say will likely set the table for interest-rate cuts later this year.” The Wall Street Journal compares and contrasts the PCE with the more highly cited CPI, released monthly by the Department of Labor. The Journal says that PCE prices “run cooler” than the CPI, and the gap in recent reports “has been especially large,” noting that while the core PCE pegged annual inflation at 2.8% in January, the core CPI had it at 3.9%. The AP also reports.
Outlook upbeat for infrastructure projects in 2024
Total US construction spending rose 14% last year, according to the Census Bureau, and the outlook for infrastructure spending remains positive for this year with federal money on the way, contractors say. An AGC survey found 32% of contractors expecting higher water and sewer project values while 30% were optimistic for transportation projects.
Full Story: Construction Dive
Construction spending takes surprising fall in Jan.
Construction spending drooped by 0.2% in January, according to the Commerce Department, although it also registered an 11.7% year-over-year rise. The fall surprised economists taking part in a poll, who predicted a 0.2% rise for the month.
Full Story: Reuters
Fed's Bostic anticipates Q3 interest-rate cut
Raphael Bostic, president of the Federal Reserve Bank of Atlanta, predicts that the Fed will likely implement its first interest-rate cut in the third quarter, followed by a pause to evaluate its impact on the economy. Bostic also expressed concerns about potential excessive exuberance among businesses after the rate cut, which could fuel inflationary pressures. "I would probably not anticipate they would be back-to-back" cuts, Bostic said. "Given the uncertainty, I think there is some appeal to acting and then seeing how participants in the markets, businesses leaders and families respond to that."
Full Story: Bloomberg
Wells Fargo CFO laments over commercial real estate
There's a long way to go before persistent pressure can be relieved in the commercial real estate market, according to Wells Fargo CFO Michael Santomassimo. It's a "long movie" that is just "a little past the opening credits," Santomassimo says, noting the bank's greatest difficulty in the office sector even as multi-family and some other asset classes are doing well.
Full Story: CFO Dive
Congress prepares to pass spending package
Congress appears ready to approve the first of two appropriations bills to fund the government to the end of the fiscal year in September. The first bill includes small funding cuts and increases for various infrastructure programs touching on transportation, housing, the military, civil works and Veterans Affairs.
Full Story: Engineering News-Record (tiered subscription model)
New "joint employer" rule suspended as ruling impends
The definition of a "joint employer" is the key consideration for a federal court in Texas as contractors await a decision on the Biden administration's widened standard. The Associated General Contractors of America is part of a coalition challenging the redefinition, saying it runs afoul of the National Labor Relations Act, and a stay is now in place until March 11.
Full Story: Engineering News-Record (tiered subscription model)
FHWA proposes discontinuing Buy America waiver
The Federal Highway Administration has proposed suspending a longstanding general waiver of Buy America requirements for manufactured products used in highway projects receiving financial assistance from the federal government. The proposed rule would not alter current Buy America requirements for iron, steel, cementitious products, aggregates and aggregate binding agents and additives.
Full Story: Department of Transportation/Federal Highway Administration
SEC approves climate rule without Scope 3 requirement
The Securities and Exchange Commission has voted 3-2 in favor of a climate disclosure rule for public companies that differs in key aspects from the original proposal. The final version omits a provision that would have required companies to report on Scope 3 emissions, which occur within a business' supply chain. The final rule also eases Scope 1 and Scope 2 disclosure requirements, meaning businesses have to report these emissions only when they are material to investors.
Full Story: The Wall Street Journal Bloomberg The Associated Press The New York Times
How construction is going electric
Lower fuel and operational costs plus federal and state tax incentives are among the factors driving adoption of electrically powered construction equipment, but barriers remain such as upfront costs and lack of charging infrastructure. The outlook remains positive, however, as Carol Brzozowski examines some of the latest electric offerings and the prospect of wider adoption.
Full Story: For Construction Pros
How one builder commits to recruiting women
Community programs for girls and ensuring 30% representation of women on project teams are just a couple of ways that builder Suffolk hopes to raise the female proportion of its workforce to 38% from the current 28%. In an interview, Maureen Henson, Suffolk's vice president of people and culture for the Southeast, discusses the company's commitment, including its Rebuild the Ratio initiative to "engage in meaningful partnerships nationally with organizations committed to growing women's representation in STEM."
Full Story: Builder
Bechtel donates $7M to suicide prevention group
Over the next five years, Bechtel will give $7 million -- the highest single donation in the Bechtel Group Foundation's history -- to the American Foundation for Suicide Prevention to design programs aiming to prevent suicide in the construction industry. The industry should apply lessons from physical safety plans to efforts to address mental health, says Brendan Bechtel, CEO of Bechtel.
Full Story: Construction Dive
US led world in hotel project pipelines in Q4
With 5,964 projects in the pipeline, the US led a record high for such projects globally in the fourth quarter, according to Lodging Econometrics. The global count came to 15,196, a 7% increase with the US accounting for more than one-third of the total, boosted by lower interest rates and particularly active markets in Atlanta and Dallas.
Full Story: Hotel Dive
Tutor Perini posts $171M loss for 2023 on legal disputes
The megaproject contractor said most of the charges related to settlements on legacy projects have been resolved
L.A. Dodgers Stadium gondola plan advances
A disputed $500 million gondola system linking Los Angeles Dodger Stadium parking lots with the city's Union Station has won conditional approval by the Metro's board of directors. The route would extend 1.2 miles, carrying gondolas more than 100 feet above Alameda Street, with construction concluding 25 months after it begins as early as this year.
Full Story: Urbanize Media/Los Angeles
---------------------------------------------------
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
