From Mark Smith, Advocate, California Builders Alliance
As Expected, Fed Holds Rates Steady, Waiting For More Data
The AP reports the Federal Reserve “kept its key rate unchanged Wednesday as it waits for additional information on how tariffs and other potential disruptions will affect the economy this year. The Fed’s policymakers signaled they still expect to cut rates twice this year, even as they also project that President Donald Trump’s import duties will push inflation higher. They also expect growth to slow and unemployment to edge up, according to their latest quarterly projections released Wednesday.” Politico reports that in “their quarterly forecast, the majority of Fed officials still projected at least two rate cuts this year, but seven of 19 members of the rate-setting committee suggested no rate cuts might be warranted in 2025.” CNBC reports the Fed Open Market Committee statement “changed little from the May meeting. Broadly speaking, the economy grew at a ‘solid pace,’ with ‘low’ unemployment and ‘somewhat elevated’ inflation, the committee said.”
Trump’s Trade Policies Prompt Companies To Raise Prices, Cut Staff
The New York Times reports, “As President Trump’s trade policies ripple through the economy, companies are increasing prices, cutting staff, reworking supply chains and making other adjustments. They say that the moves are necessary because more consumers are starting to pull back their spending.” For example, Procter & Gamble (P&G) is set to cut 7,000 jobs, approximately 15% of its nonmanufacturing workforce, as part of its response to the financial impact of tariffs, which are anticipated to cost the company about $600 million in the current fiscal year. Meanwhile, Walmart and JetBlue are also making adjustments, with Walmart warning of price increases due to tariffs and JetBlue reducing flight schedules in response to weaker demand. These developments highlight the broader economic impact of President Trump’s trade policies, which have led to shifts in consumer spending and company operations.
Construction input prices rise in May
US construction input prices rose in May, driven largely by increases in steel and aluminum costs ahead of the June 4 tariff hike, which doubled duties on certain metal imports. The Associated General Contractors of America believes these tariffs could exacerbate cost pressure for contractors already facing escalating prices across concrete, insulation and subcontractor services. "Construction firms are in no position to absorb or push back against tariff-driven cost increases," said AGC CEO Jeffrey Shoaf. "The Trump administration should abandon plans to impose tariffs on materials that will drive up the cost of construction projects." Full Story: Construction Briefing
Survey shows disconnect between AI value, AEC readiness
A new survey by BST Global reveals that while 75% of AEC firms believe AI will boost profitability and 82% expect an AI-driven industry transformation within five years, only 20% feel "highly prepared" for adoption. Major barriers include identifying business-value use cases and managing risks, with leaders stressing the need for upskilling, new business models and long-term investment in organizational change to fully harness AI's potential. Full Story: Engineering News-Record (tiered subscription model)
Gilbane creates subsidiary focused on procurement
Gilbane Building Co. has created a procurement subsidiary, NextDirect, to streamline sourcing of mechanical and electrical systems for complex projects and reduce delays and costs. Led by former Turner Construction executive Suzanne Bennett, the division emphasizes early collaboration, supply chain transparency and lifecycle oversight. Full Story: Construction Dive
USACE to reissue permit program with modifications
The Army Corps of Engineers is set to reissue the Nationwide Permit Program, which facilitates quicker permit approvals for infrastructure projects such as pipelines and highways that could impact wetlands. A proposal would extend the five-year permits to 10 years and would add a category for projects facilitating fish passage at dams. Full Story: E&E News
Groundbreaking held for 31-story mass timber tower
Developers have broken ground on The Edison, a 31-story mass timber apartment tower in downtown Milwaukee, which will become the tallest mass timber building in the Western Hemisphere upon completion in 2027. Built by general contractor C.D. Smith with design and engineering support from HPA, HDLA, Thornton Tomasetti and Forefront Structural Engineers, the tower aims for Passive House and Living Building Challenge Core certifications. Construction emissions from materials are expected to be 54% lower than conventional materials, and operational carbon should be reduced by 45%. Full Story: BizTimes Milwaukee
Trump to keep PLA mandate but allow exemptions
The Trump administration will maintain a Biden-era rule requiring project labor agreements on large federal projects, but it will allow exemptions when PLAs hinder competitive bidding or are not cost-effective, according to the Office of Management and Budget. Full Story: Construction Dive
DOD reviews PLA use in construction contracts
The Department of Defense is reviewing construction projects to assess the necessity of project labor agreements, working with the Army Corps of Engineers and Naval Facilities Engineering Systems Command, says Dale Marks, assistant secretary of defense for energy, installations and environment. Sen. John Boozman, R-Ark., expressed concerns about rising construction costs. Full Story: Engineering News-Record (tiered subscription model)
Universities pause construction amid funding uncertainty
Several major research universities, including the University of North Carolina at Chapel Hill, Yale University, Johns Hopkins University and Washington University in St. Louis, have paused construction projects due to financial uncertainty stemming from the Trump administration's proposal to cap federal research funding reimbursement rates at 15%. This has created significant budget concerns, particularly for projects related to research infrastructure. Full Story: Inside Higher Ed
Concrete is getting smarter, greener and more high-tech
Concrete technology is evolving to meet modern construction demands, with advancements such as self-healing concrete, 3D-printed concrete, smart concrete, sustainable mixes and robotics. These innovations enhance durability, reduce carbon emissions and improve safety, as demonstrated by projects from Worcester Polytechnic Institute and CarbonCure. Full Story: AZoBuild
Brightline West begins field work for high-speed rail
Brightline West has begun field investigations along the Interstate 15 corridor in California for its $12 billion high-speed rail project connecting Las Vegas and Southern California. The work includes geotechnical borings and pavement coring primarily during the day, with some night work requiring freeway shoulder closures. Full Story: Daily Press (Victorville, 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
