from Mark Smith, Advocate, California Builders Alliance
REMINDER: California’s New Workplace Violence Prevention Plan and Training Requirements Take Effect on July 1, 2024; How to Get Ready Employers must implement a comprehensive workplace violence prevention plan (WVPP) and provide employee training on the WVPP by July 1, 2024. The WVPP requirement (under California Labor Code Section 6401.9), augments the existing obligation for California employers to create and maintain an injury and illness prevention plan and is intended to combat incidents of workplace violence, which is the second leading cause of fatal occupational injuries in the United States, according to OSHA.
California Builders Alliance and Exchange Member family: Attached is a flyer for a webinar being hosted on May 15th, 2024. Please remember to share with your members as a benefit you can provide them free of charge.
McKinsey: Trades top jobs not requiring a degree
Construction superintendent with a median annual salary of $84,600 tops a short list of jobs in demand that don't require a college degree, according to McKinsey. The trades in general offer excellent pay amid labor shortages, McKinsey notes, with even journeyman plumbers pulling in a median of $61,500. Full Story: CNBC
Payroll employment increases by 175,000 in April; unemployment rate changes little at 3.9%
Total nonfarm payroll employment increased by 175,000 in April, and the unemployment rate changed little at 3.9 percent. Job gains occurred in health care, in social assistance, and in transportation and warehousing.
Compensation costs up 1.2% Dec 2023 to Mar 2024 and up 4.2% over the year ending Mar 2024
Compensation costs increased 1.2 percent for civilian workers, seasonally adjusted, from December 2023 to March 2024. Over the year, total compensation rose 4.2 percent, wages and salaries rose 4.4 percent, and benefit costs rose 3.7 percent.
Architecture Billings Index declines in March
The American Institute of Architects' Architecture Billings Index recorded a sharp drop between February and March, with the latest reading of 43.6 down 5.6 points. AIA attributes the decline to easing but still persistent supply chain and inflation issues while also noting that new design contracts are up modestly, suggesting "that clients are interested in starting new projects but remain hesitant to sign a contract and officially commit to those projects." Full Story: The Architect's Newspaper
AGC: Construction demand rising amid labor shortage
An ongoing worker shortage isn't preventing growth in construction demand, with industry employment up 65% across 358 metro areas year over the in March, according to an analysis of federal figures by the the Associated General Contractors of America. Infrastructure, manufacturing and data centers figure prominently in the growth, although AGC notes some builders are refraining from bidding due to a lack of staff. Full Story: Construction Briefing
Fed's rate-cut stance wavers amid inflation concerns
Following a dovish pivot in December that may have helped avert a recession, Federal Reserve Chair Jerome Powell is signaling a possible hawkish shift due to persistent high inflation and robust demand. With recent data pointing toward sustained inflation pressures, the Fed may delay anticipated rate cuts, suggesting a tougher stance on monetary policy in upcoming meetings. Full Story: Bloomberg
Markets price in 20% chance of Fed hike in next year
Options markets are pricing in a one in five chance of the Federal Reserve increasing interest rates over the next 12 months, up significantly from the beginning of the year. Inflation has remained hotter than expected, which makes it a possibility the Fed could hike rates again. This has sent bond yields to a five-month high of 5.01%, while stocks experienced their longest losing streak in 18 months before making some gains on Monday. Full Story: Financial Times
A mixed outlook for construction sector financing
Lenders' macro perspective on the construction sector is brightening but remains mixed in an environment in which interest rates are expected to stay elevated for an uncertain period, writes James Bardenwerper. However, at the micro level, "the decision to finance a construction company is backed by more than just broader economic elements," with factors to be weighed including "project/portfolio diversification, new construction exposure, financial performance and surety bonding, among others," as Bardenwerper explains.
Full Story: Construction Business Owner
YOY apartment starts plunge in March
Construction starts for apartment buildings with five or more units dropped 43.7% year over year in March while pulled permits fell 20.8%, according to a report from HUD and the US Census Bureau. However, the number of such projects completed by the end of March was up 4.6% from a year earlier. Full Story: Construction Dive
Consumer Confidence Down Sharply This Month
Reuters reports the Conference Board said on Tuesday that its consumer confidence index fell to 97.0 in April, “the lowest level since July 2022, from a downwardly revised 103.1 in March. Economists polled by Reuters had forecast the index little changed at 104.0 from the previously reported 104.7.” Dana Peterson, the Conference Board’s chief economist, said, “Confidence retreated further in April as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.”
NYTimes Columnist: Current Economy “Closely Resembles” Late 90’s Boom
Paul Krugman writes at the New York Times that the early 2024 economy “closely resembled” the economic boom of the “late 1990s.” Though Americans “might not be feeling the prosperity...by the numbers, things look pretty good.” Krugman argues that inflation “has come way down since” 2022, and suggests a recent increase in monthly data “probably reflects statistical noise.” He concludes that the US may be “seeing a return to something like the economic conditions of the late 1990s – both the good, in the form of low unemployment and (maybe) strong productivity growth, and the not so good, in the form of persistently high interest rates.”
Are megaproject clients willing to finance upfront?
In a market where many contractors are shifting to smaller jobs, Tutor Perini has been able to get megaproject clients to pay upfront for materials and other expenses, according to Ron Tutor, outgoing CEO of Tutor Perini. "We demand and get mobilization payments, which means on a typical $1 billion job, if we demand 8% to 10% upfront, it means they pay us $80 million to $100 million the day we set foot on the job," says Tutor.
Full Story: Construction Dive
Report sizes up need for highway funding
A TRIP report produced in the wake of the collapse of the Francis Scott Key Bridge in Baltimore concludes that highway spending should more than double from the 2018 level to $57 billion annually over 20 years. It's part of an overall assessment of the nation's ability to sustain the movement of freight and what would be needed to address a backlog of infrastructure needs. Full Story: For Construction Pros
White House aims to streamline NEPA permitting
The White House Council on Environmental Quality on Tuesday finalized a rule updating the National Environmental Policy Act that aims to streamline permitting for infrastructure without compromising environmental integrity. In comments submitted last year, AGC expressed concern that "these revisions go well beyond NEPA's original intent and could complicate and prolong infrastructure projects." Full Story: The Hill E&E News
New rule requires federal buildings to go fossil fuel-free
The Biden administration has issued a final rule that mandates new federal buildings to phase out fossil fuel use, thwarting the natural gas industry's longstanding efforts to block the regulation. Under the rule, federal buildings built between 2025 and 2029 must cut fossil fuel use by 90%, while those built after 2030 must completely eliminate on-site fossil fuel use. Full Story: BNN Bloomberg (Canada)
Guidance issued for commercial building electrification
The Energy Department has published a set of guidelines to assist the electrification of large commercial spaces that have existing boilers. The guidelines, which acknowledge that retrofitting can be complex, offer a list of points for building owners, contractors and other stakeholders to consider to ensure the process is as smooth as possible. Full Story: Contractor Magazine
GOP pushes back on emissions mandates for trucks
Republican members of Congress are trying to use the Congressional Review Act to stop emissions reduction mandates proposed by the Biden administration for heavy-duty trucks, along with light- and medium-duty vehicles. The proposal "highlights the need for EPA to include the operational realities of trucking in their final regulation," asserted Ed Gilroy, chief advocacy and public affairs officer for the American Trucking Association. Full Story: Overdrive magazine online
Study: Companies not really ready to adopt AI
Needed infrastructure, planning and skills may all be lacking as companies in the industrial sector prepare to adopt artificial-intelligence solutions, according to research by IFS, a global cloud enterprise software company. "The lack of maturity at the data foundation layer needs to be addressed as part of an overall AI strategy, otherwise AI simply will never be the magic bullet that can turbocharge the enterprise," explains Christian Pedersen, IFS chief product officer. Full Story: Building Design+Construction
New highway stripes get Calif. drivers to slow down
Orange-and-white highway striping in place of solid white to designate a construction zone is succeeding in getting drivers' attention and encouraging them to slow down, according to the California Department of Transportation. The added orange in a pilot project is also expected to make the stripes more visible in rain and fog. Full Story: KTLA-TV (Los Angeles)
$7.1B L.A. light rail extension advances a step
A key hurdle for federal grants has been cleared for the first segment of the Southeast Gateway Line in Los Angeles with final environmental certification by the Metro Board of Directors. The $7.1 billion light rail project would extend 14.5 miles linking the A Line's Slauson station to Artesia with an expected opening in 2035. Full Story: MyNewsLA (Los Angeles)
Battery storage plant proposed in Morro Bay, Calif.
Vistra Corp. has proposed building a battery storage facility at the site of the abandoned Morro Bay Power Plant in California. Project development director David Yeager says the plan calls for three massive warehouses or 174 separate enclosures to store enough electricity for 450,000 homes. Full Story: The Tribune (San Luis Obispo, Calif.)
Plan for $1.9B in Disneyland improvements gets approved
Walt Disney Co.'s plan to invest $1.9 billion in its Disneyland Resort in Anaheim, Calif., is advancing with approval by the city. The 10-year DisneylandForward plan includes more than $100 million to the city for various infrastructure improvements, affordable housing and parks, with the overall proposal expected to create 7,800 construction jobs over its duration. Full Story: Construction Dive
Sacramento, Calif., considers campus on old arena site
An Innovation Campus that would create create 1,400 construction jobs is proposed for the now-leveled 185-acre site of the old Sleep Train Arena in Sacramento, Calif. Plans presented to the City Council for approval include a teaching hospital as part of a California Northstate University campus, a K-8 school and space for 2,500 homes, businesses and parks. Full Story: KCRA-TV (Sacramento, Calif.)
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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
