from Mark Smith, Advocate, California Builders Alliance
Introducing the 2024 California ballot propositions. Here’s what they would do
US construction spending up 6.4% year over year in May
US construction spending in May eased 0.1% from April but was up 6.4% from a year before at an adjusted annual rate of almost $2.14 trillion, according to the US Census Bureau. Over the first five months of the year, spending was up 8.8% from the year-earlier period. Full Story: The Construction Broadsheet
US GDP Growth Accelerated More Than Expected In Second Quarter
The AP reports that new data released Thursday by the Commerce Department showed that the US GDP “accelerated last quarter at a strong 2.8% annual pace, with consumers and businesses helping drive growth despite the pressure of continually high interest rates.” That’s up from a 1.4% growth rate in the first quarter, and above economists’ expectation for a 1.9% rate. CNBC reports, “Consumer spending helped propel the growth number higher, as did contributions from private inventory investment and nonresidential fixed investment, according to the first of three estimates the department will provide.” Bloomberg reports that government spending “contributed more to GDP compared to the first three months of the year, boosted by defense spending.” Reuters says the report “dispelled concerns that the economic expansion was in danger of an abrupt end, which had been stoked by a lackluster performance in the first quarter and in April.” The Wall Street Journal says that the new report “shouldn’t change the outlook for the Federal Reserve. Officials have signaled that they expect to hold interest rates steady at their meeting next week but could cut at their subsequent meeting, in September, if inflation continues to cool.” The Washington Post, the New York Times and the Wall Street Journal also reports.
Eurozone Inflation Slows
The AP reports inflation in the eurozone “crept lower to 2.5% in June, but remained stuck above the level favored by the European Central Bank, which is in no hurry to add more rate cuts after a first tentative reduction in its benchmark rate.” The piece explains that the figure was “down from 2.6% in May, welcome news as inflation continues to fall from its peak of 10.6% that robbed consumers of spending power and mired the European economy in months of near-zero growth.” Reuters reports ECB President Christine Lagarde “welcomed a small fall in inflation last month as a step in the right direction, even as data on Tuesday showed prices for services continued to rise nearly twice as fast as the headline figure.” She told the ECB Forum on Central Banking, “It’s heading in the right direction for the indicator that we use.” CNBC and Reuters provide coverage of additional comments from ECB officials
Industrial construction growth continuing, but cooling
Industrial space construction starts in the first half of 2024 fell by one-third year over year, according to a CommercialEdge estimate, but the decline comes only after two years of record deliveries. Looking ahead, CommercialEdge predicts further growth in the new development pipeline, albeit at a slower pace with current plans for 561.2 million square feet of new space. Full Story: Building Design+Construction
AIA index decline for 17th month, but optimism remains
The American Institute of Architects' Architecture Billings Index saw a decline for the seventeenth consecutive month in June, with a score of 46.4. Chief Economist Kermit Baker attributes this ongoing decline to elevated interest rates, high construction costs, and weak property values. Despite the current downturn, there is optimism for improvement once interest rates ease, potentially by December. Full Story: The Architect's Newspaper
Why costs climb for public construction projects
Public projects come with a minefield of potential setbacks that include estimation complications, permitting delays, contentious public feedback, legal challenges and unpredictability in the actual construction process, Jared Brey writes. All of that creates an environment that makes cost overruns seemingly inevitable. Self-imposed decisions, such as cutting a project into phases or adding excess customization, can exacerbate the overall cost of public construction. Full Story: Governing
What the Chevron decision could mean for AEC companies
The Supreme Court's decision to overturn a 40-year-old landmark case, colloquially known as Chevron, which created a legal test for when federal courts must defer to a government agency's interpretation of a law or statute, "will definitely put more pressure on Congress to clarify intent when crafting new laws," says Brian Turmail from the Associated General Contractors of America. "It will also encourage agencies to tack closer to the statute than they have done in the past few years, which is something that AGC of America has long advocated," Turmail added. Full Story: Engineering News-Record (tiered subscription model)
Gavin Newsom orders California officials to clear homeless encampments
Gov. Gavin Newsom answers questions about homelessness after releasing his $297 billion state budget for the 2023-24 fiscal year on Tuesday, Jan. 10, 2023, in Sacramento.
Gov. Gavin Newsom ordered state agencies to begin sweeping homeless encampments on public property, using newfound authority after the U.S. Supreme Court’s OK last month.
In an executive order issued Thursday morning, the governor directs agencies to remove encampments that pose a risk to “life, health and safety.”
How to take advantage of energy project tax credits
Construction businesses can avail themselves of a 30% investment tax credit on clean energy projects offered under the Inflation Reduction Act of 2022 if they meet prevailing wage and apprenticeship requirements. Shawn Daray and Marisa Del Turco examine the requirements and responsibilities in detail. Full Story: Construction Business Owner
6 US cities crack top 10 most expensive to build in
The latest International Construction Market Survey from Turner & Townsend has found building projects in US cities are more expensive than anywhere else in the world for the second consecutive year. The cities occupy six of the top 10 spots in terms of cost, with New York City and San Francisco ranked first and second, respectively. Full Story: Daily Commercial News (Ontario)
N.Y. closer to banning fossil fuels in new buildings
Building code officials in New York are accepting public comment on a potential update in the 2025 code that would mandate that, by 2026, new buildings higher than seven stories implement all-electric cooking and heating, and those under seven stories would do the same by 2029. Buildings are said to be the biggest culprit of annual greenhouse gas emissions in the state. Full Story: Public News Service
Study to focus on job site head injuries, helmets
Researchers at Virginia Tech are turning from athletic helmets to construction helmets in a bid to reduce the risk of head injuries at work. The goal is development of a rating system and insights into the kinds of head injuries that occur on construction sites with lab-based testing that draws on injury data. Full Story: Construction Dive
Buttigieg: Infrastructure funds shored up supply chain
The Biden administration's commitment to infrastructure spending has been a key factor in minimizing supply chain disruptions, said Department of Transportation Secretary Pete Buttigieg during a recent address at an industry event, noting the importance of port development and efficient border crossing. Buttigieg also cited the role of public-private partnerships and a federal initiative to reduce roadway fatalities and injuries. Full Story: Supply Chain Dive
Political loophole could undermine heat safety
Congress passed a law in 1972 that allows OSHA to enforce rules on private companies, but not public entities, and today that means construction workers on public projects in 23 states aren't covered by OSHA regulations. That includes recent rules on heat protection. Full Story: E&E News
University course focuses on AI in construction
A semester-long course at Florida International University is introducing students to artificial intelligence and its uses in construction. Course instructor Lufan Wang describes AI as a transformative technology as she encourages students to explore its possibilities as they gain a greater understanding and ability to communicate with it. Full Story: Florida International University
Calif. county scales down office plans
Officials in Sonoma County, Calif., have decided to proceed with downsized plans for a new county office building to be supplemented by acquisition of existing office space. The county estimates a cost of $308 million for the new, pared-back building, which will come with a mixed-use development nearby. Full Story: The Press Democrat (Santa Rosa, Calif.)
Sacramento, Calif., airport to begin renovations
Sacramento International Airport will begin construction next month on a pedestrian walkway that is the first phase of a $1.3 billion renovation plan. The airport plans to add at least six new gates to Terminal B, an additional garage and new centers for car rental and ground transportation by 2028. Full Story: The Sacramento Bee (Calif.) (tiered subscription model)
Klamath River dam removals to finish early
Completion as soon as next month is now forecast for the largest-ever US dam-removal project, six weeks ahead of a mid-October deadline, according to the Klamath River Renewal Corp. The $500 million project along the California-Oregon border is removing three hydroelectric dams on the Klamath to restore natural flow, with a fourth dam having been eliminated last year. Full Story: San Francisco Chronicle (tiered subscription model)
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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
