from Mark Smith, Advocate, California Builders Alliance
Introducing the 2024 California ballot propositions. Here’s what they would do
Weaker labor market stokes fears of a downturn, spurs market sell-off
Employers added 114,000 jobs in July and the unemployment rate spiked to 4.3 percent, reflecting a weaker-than-expected labor market that is stoking fears that interest rates have been too high for too long.
With the unemployment rate now at its highest since coming out of the pandemic downturn in 2021, economists, banking analysts and investors warned that recession signals are flashing.
Financial markets on Friday reflected worries that the Federal Reserve missed an opportunity to save the economy from a downfall by holding out for a September rate cut, reversing recent optimism about the strength of the economy. All three of the major stock indexes fell significantly throughout the day, with the S&P 500 closing down 1.8 percent and the tech-heavy Nasdaq composite index down by 2.4 percent by market’s close Friday.
US Productivity Growth Accelerated In Second Quarter
The New York Times reports that US worker productivity “grew at a 2.3 percent annual rate in the second quarter, the U.S. Bureau of Labor Statistics reported on Thursday, surpassing economists’ expectations. The pickup was a major improvement upon the sluggish 0.4 percent rate in the first quarter. And on a yearly basis, productivity increased 2.7 percent.”
Investors watch for Fed hints of Sept. rate cut
Investors are closely watching the Federal Reserve for signals of an interest-rate cut in September, as the central bank is expected to maintain its benchmark rate at 5.25% to 5.5% during a policy meeting that begins today. Improved inflation data and economic slowdown indicators have brought the Fed closer to considering a rate reduction. However, Fed officials, including Chair Jerome Powell, have emphasized the need for confidence in inflation trends before making such a move. Upcoming economic data and the potential impact on the labor market will influence the Fed's decision-making. Full Story: The Wall Street Journal Reuters
Fed's high rates have mixed impact on US economy
The Federal Reserve's high interest rates over the past year have cooled the US economy but also brought about other issues. Higher-income households and corporations have benefited from a booming stock market and rising home values, while consumer spending remains resilient. However, higher borrowing costs have led to increased unemployment, small businesses struggling with loans and lower-income households falling behind on payments. Full Story: Bloomberg
Job openings in construction down 19% in June
A slowdown in residential construction burdened by high interest rates contributed to a 19% drop in construction industry job openings between May and June, according to the Bureau of Labor Statistics. The year-over-year decline was sharper, at 29%, but the recent lower rate of layoffs indicates an expectation that workers will continue to be needed, observes Ken Simonson, chief economist for Associated General Contractors of America. Full Story: Construction Dive
Bipartisan House Tax Package Fails In Senate
The Washington Post reports that Senate Republicans “blocked legislation Thursday to cut taxes for working families and extend some corporate tax breaks, dooming a bipartisan compromise that the House had overwhelmingly approved and raising the stakes on taxes for this fall’s elections.” The legislation failed on a cloture vote 48-44, far short of the 60 votes needed to advance. The New York Times reports, “Business groups loved it and hoped Congress would again allow companies to immediately deduct the full cost of capital investments and research expenses from their tax bills. And anti-poverty activists cheered its expansion of federal support for parents with children.” However, GOP senators “worried that the bill’s expansion of the child tax credit veered into creating a new welfare program.” The Wall Street Journalreports that the bill, which is backed by President Biden, passed the House 357-70. Other sources covering the story include, the AP, Roll Call, Bloomberg, Politico, Bloomberg and the Wall Street Journal.
EPA defends wider definition of wetlands
The EPA has defended its latest waters of the US rule in court against a challenge by 24 states, led by West Virginia. The states argue that the rule violates the ruling in Sackett v. EPA and the Clean Water Act. The EPA and the Army Corps of Engineers maintain that their interpretation of wetlands is consistent with legal requirements, despite the states' claims that wetlands must be wet to qualify for protection. Full Story: Bloomberg Law
Contech deals surge in H1 as dollar total eases
New deals in the construction technology sector were up 18% in the first half from a year before, although the total investment eased 1.6% to about $1.23 billion, according to a report by Cemex Ventures. Regionally, North America maintained a clear lead, accounting for 55% of the total, followed by Europe with 30%. Full Story: Construction Dive
States may step into vacuum left by federal agencies
States may take on a bigger role on policies affecting their economies after the Supreme Court struck down the Chevron rule and weakened the regulatory authority of federal agencies, writes Erin Norman, senior messaging strategist at the State Policy Network. "Housing, education, land use and transportation are examples of areas where federal rule makers might step aside and let states manage necessary regulations." Full Story: Governing
Dragados and Flatiron Construction are being combined into one unit by Spain's ACS Group as the company integrates its North American civil engineering and construction businesses. Under the new arrangement ACS will own 61.8% and Germany's Hochtief 38.2% of the newly combined company of Flatiron-Dragados. Full Story: Engineering News-Record (tiered subscription model)
Digital solutions govern work site, equipment access
Digital tools are available for the common practice of managing access to work sites and the less common practice of restricting access to equipment. Kevin Noonan, product development manager at United Rentals, examines how these solutions work with coded badges and ignitions locks and what future solutions may offer in the form of seamless, end-to-end site security. Full Story: For Construction Pros
Report: New transmission lines being added at slower pace
New transmission lines have been added at a significantly slower pace in recent years, according to a report from Grid Strategies. While an average of 1,700 miles of transmission lines were added annually in the early 2010s, the pace fell to 925 miles per year from 2015 to 2019 and 350 miles from 2020 to 2023 as the lion's share of utility spending is now used on lower voltage, transmission projects meant to bolster reliability. Full Story: Utility Dive
Senators seek bipartisan deal on permitting reform
Sens. Joe Manchin, I-W.Va. and John Barrasso, R-Wyo., recently introduced the Energy Permitting Reform Act of 2024. The legislation seeks to limit lawsuits related to energy permitting decisions and shorten the energy permitting process. The bill comes at a critical time following the White House Council on Environmental Quality new requirements to the already complicated National Environmental Policy Act permitting process. Learn more and read AGC's summary.
McCarthy lifts dirt at $3.7B hospital tower
A recent groundbreaking marked the start of construction on a $3.7 billion University of California Davis Health California Tower in Sacramento. The project's general contractor, McCarthy, is working under a design-build contract on the project, which when finished will enclose 910,000 square feet over 14 stories offering a five-story pavilion and 334 private patient rooms. Full Story: Construction Dive
Construction begins on $3.57B Calif. light-rail project
Utility lines are being moved as construction begins on the $3.57 billion light-rail project in Southern California's San Fernando Valley. The work is expected to be stepped up in the fall for a project planned in two phases over seven years, with the completed line to extend 6.7 miles from Van Nuys to Pacoima. Full Story: Los Angeles Daily News
Land purchase advances Sacramento development plan
Plans for a master-planned community in Sacramento, Calif., are moving forward with the developers' acquisition of a site from the NBA's Sacramento Kings. Argent Development's Innovation Park would eventually span 183 acres providing 2,500 housing units with a mix of single-family homes, town homes, condominiums and apartments. Full Story: Multifamily Dive
Latest section of Calif. highway upgrade announced
The latest work zone as part of a $280 million roadway upgrade project in Northern California will extend from the Yolo Causeway through West Sacramento on Interstate 80 and US Highway 50, the state Department of Transportation announced. Speed limits will be reduced to protect work crews. Full Story: KTXL-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
