Capitol Update - July 29/2022

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from Mark Smith, Advocate, California Builders Alliance 

Bill mandates breaks every 4 hours for construction workers

New legislation would require U.S. construction employers to allow workers to take a paid 15-minute break every four hours year-round. Representative Sylvia Garcia (D-Houston) filed the Construction Injury Prevention Act Wednesday to help address heat-related illness and death among construction workers. OSHA’s recordkeeping of heat-related deaths is incomplete, but at least 384 workers have died from heat exposure in the past decade — many of them construction workers, according to an analysis of federal data by NPR and Columbia Journalism Investigations. The study found that Latinos accounted for a third of all heat-related fatalities since 2010, though they comprise only 17% of the workforce. “I introduced this bill to protect the construction workers who are building a better America across our nation and the Houston region,” said Garcia in a press release. “I’ve heard far too many horror stories from workers who have been seriously injured due to employers not allowing rest breaks. These cruel business practices hurt minorities and Latino communities, like those in my district, the most.”  


June jobless rates down in 10 states, up in 2; payroll jobs up in 13 states, down in 2 

In June, unemployment rates were lower in 10 states and the District of Columbia, higher in 2 states, and stable in 38 states. Nonfarm payroll employment increased in 13 states, decreased in 2 states, and was essentially unchanged in 35 states and the District.  HTML | PDF | RSS | Charts


Inflation percentages expected to ease

Inflation will soon become less painful for contractors as the basis for measuring current rising prices will reflect earlier price increases and reduce the percentage gain calculated over time, says ConstructConnect Chief Economist Alex Carrick. But "no matter what happens with inflation, it's going to be a more expensive world, period," Carrick said, while also noting the near-term prospect of many ultra-large projects. Full Story: Daily Commercial News (Ontario) 


Federal Reserve report signals slowing construction demand

Some construction activity has begun to slow in various regions around the country as commodity pricing, building permit applications and even calls for construction workers eased, according to the latest Beige Book reading, the Federal Reserve’s informal measure of economic activity. Ken Simonson, chief economist for the Associated General Contractors of America, noted several aspects reflecting lower demand for construction, including nine of the 12 Fed districts reporting “noted moderation in prices for construction inputs such as lumber and steel,” in his latest Data DIGest report.  In San Francisco, commercial real estate permits and construction slowed; in Dallas, there was less demand for construction workers, according to staffing agencies; in Kansas City, financing for multifamily construction tightened, leading to fewer projects starting in recent weeks.  


Nonresidential construction starts fall 14%; ABI outlook cloudy

Nonresidential construction starts plummeted 14% in June, as project owners became spooked by the likelihood of recession in an era of rising interest raise and continued volatility in materials pricing, according to Dodge Data and Analytics. The decline was broad, with commercial starts in sectors such as retail, warehouses and offices down 16%, manufacturing starts off 14% and institutional starts including education, healthcare and public buildings falling 12%.  “Construction markets are getting jittery as the odds of recession increase,” said Richard Branch, chief economist for Dodge. “While projects are still moving through the planning process, the velocity has downshifted, reflecting uncertainties over how rising interest rates will impact the economy, construction material prices and ultimately, construction starts.”

Analysts: Fed's inflation fight will further strain economy

Analysts say more economic pain will accompany the Federal Reserve's efforts to tame inflation, with a recession and higher rates of joblessness needed to materially ease rising prices. Michael Gapen, chief US economist at Bank of America, has predicted a mild recession beginning the second half of the year and says: "We have to curb things domestically to help us get where we want to go on inflation." Full Story: BNN Bloomberg (Canada)


House bill could change EPA's authority over emissions

Rep. Alexandria Ocasio-Cortez, D-N.Y., is seeking buy-in for a bill that would codify the Environmental Protection Agency's oversight of greenhouse gas emissions and potentially hamstring the Supreme Court's ruling in the West Virginia v. EPA case. "It's also quite short because all that it seeks to do is to update the language on generational shifting cited by the Supreme Court in their EPA ruling," said Ocasio-Cortez. Full Story: E&E News 


$200K reward leads to worker's termination for noose at federal project

The consortium running the $6.5 billion Uranium Processing Facility construction site at the federal Y-12 facility in Tennessee fired a worker after tips from a $200,000 reward hotline connected the person to a noose discovered there in June. “Our organization offered a substantial reward for the proper identification of the individual or individuals involved in the incident,” North America’s Building Trades Unions President Sean McGarvey said in a statement. “Based on tips provided to the NABTU reward line, the individual has been identified, and his employment has been terminated.” An NABTU spokesperson told Construction Dive payment of the reward was in process, and that the outcome shows offering rewards to identify the perpetrators of these kinds of actions works. “The tips brought the person to justice,” Betsy Barrett, director of marketing and communications for NABTU, said.  


Companies next year plan biggest average pay raise since 2008

U.S. companies facing a tight labor market, high turnover and the biggest price pressures in 40 years plan in 2023 to raise worker pay on average by 4.1% — the largest increase in 15 years, according to Willis Towers Watson (WTW). Nearly three out of four companies (73%) attribute their planned pay increases to the need to attract and retain employees in a highly competitive labor market, WTW said Thursday, describing a survey of 1,430 companies. Almost half of respondents (46%) cited employee expectations for higher pay as a cushion against inflation. “With a possible recession looming, continued high inflation and employers grappling with talent supply challenges, organizations need to get more creative to address attraction and retention challenges,” according to Catherine Hartmann, global practice leader of work, rewards and careers at WTW.  


Recession likely to begin in first quarter 2023: Fannie Mae

The U.S. economy will likely tip into recession during the first quarter of 2023 and shrink 0.4% for the full year as the combination of high inflation and tightening monetary policy bedevils consumers and businesses, Fannie Mae economists said. Citing the same headwinds, Fannie Mae marked down its forecast for growth this year to 0.1% from 1.2%. “The economy slowed significantly, though unevenly, in the first half of 2022 on the expectation that the [Federal Reserve] will aggressively raise interest rates,” Fannie Mae Chief Economist Douglas Duncan said. “Consumer confidence measures increasingly indicated dissatisfaction with current levels of inflation, offering support to the Fed’s aggressive posture.” The consumer price index (CPI) during 2022 will likely rise 5.7%, Fannie Mae said, noting that higher-than-expected price pressures in June pose an “upside risk” to its forecast.  

Dodge economist: Recession may be 'fairly short'

New York City-based data consortium Dodge Construction Network revealed a new quarterly report on Tuesday morning that’s focused on the state of the construction industry in the broader economy. The new report details the economic turmoil gripping the construction industry, caused by sky-high inflation and rising interest rates. It’s not all bad news: The report notes that the $1.2 trillion Infrastructure Investment and Jobs Act will be a vehicle for significant investment into the nonresidential construction industry, and will create opportunities for contractors to gain work.


Dodge: Resilience taking on new importance in projects

More than 8 in 10 civil contractors and 9 in 10 civil engineers say they have worked on projects with a resilience priority, according to the latest edition of The Civil Quarterly from Dodge Construction Network. Those priorities most commonly include flood resilience, hardening against attacks and sustaining functionality during or after a disaster. Full Story: Dodge Data & Analytics   


AGC analysis: Major gains in construction input prices

Prices of materials and services in nonresidential construction surged 16.8% in June from a year before, including a 1.1% gain from May to June, according to an analysis of US figures by the Associated General Contractors of America. However, prices for some metal and wood materials edged down in the latest monthly comparison, AGC notes. Full Story: The Construction Broadsheet  


Survey: Supply chains remain tangled

Supply chain problems have failed to improve over the past three months, according to a survey of corporate economists, and in construction, some material prices have eased but others continue to climb, notes Ken Simonson, chief economist at Associated General Contractors of America. The insights come as the Federal Reserve faces a critical decision on interest-rate hikes. Full Story: Marketplace


SCOTUS may not take kindly to climate declaration

A climate emergency declaration is still possible from President Joe Biden, but it would probably be greeted with a variety of legal challenges and might not stand up in the Supreme Court. SCOTUS recently flexed its muscle in the West Virginia v. EPA case and showed "skepticism about delegations of power from Congress to the executive," said David Bookbinder of the Niskanen Center. Full Story: E&E News


How to be positioned for a K-shaped economic recovery

A bevy of difficulties currently beset the economy and the construction industry, and only a K-shaped recovery is likely -- with some sectors doing well while others lag, writes Garry Bartecki from GB Financial Services. Bartecki advises on how to prepare for this mixed scenario in terms of equipment, insurance and finances. Full Story: For Construction Pros  


Boring Co. misses proposal deadline on San Bernardino project

Although it originally proposed the idea for a tunnel connecting a Metrolink train station to Ontario International Airport in Southern California, the odds that The Boring Co. will be selected to do the work on the project look slim. The Elon Musk-owned tunneling company failed to meet a proposal deadline earlier this year, the San Bernardino County Transportation Authority confirmed to Construction Dive. This means there is a chance that the company may not participate in the construction of the 4-mile-long transit loop connecting the Rancho Cucamonga, California, Metrolink station to the airport located 38 miles west of Los Angeles, said Tim Watkins, chief of legislative public affairs for SBCTA. Watkins said he couldn’t speculate on the reason for the missed deadline.  


Balfour Beatty reels $235M in Calif. contracts

School districts in California, the San Diego County government and the Marine Corps over the past six weeks have awarded a total of $235 million in contracts to Balfour Beatty. The largest one is a $99 million lease-leaseback contract to construct a new secondary school for the Fontana, Calif., school district. Full Story: Construction Dive 


Bureau of Land Management OKs California solar project
The Bureau of Land Management gave the final go-ahead Wednesday for construction to begin on the 2,600-acre Oberon Solar Project in Southern California. Oberon Solar LLC, a subsidiary of Beaverton, Oregon-based Intersect Power, will build it on BLM-managed land near Desert Center in eastern Riverside County. The Oberon project will produce enough energy to power 146,000 homes and create 750 union construction jobs, BLM said in a press release.  The project is part of a BLM and state partnership to create a 22.5-million-acre renewable energy zone over seven counties in the Mojave and Colorado deserts. The Desert Renewable Energy Conservation Plan aims to streamline clean energy development in balance with desert ecosystem conservation and recreation, though the Oberon build has proven controversial with some environmentalists. 


3 Calif. solar projects get federal green light

The Bureau of Land Management has approved three solar energy projects planned for the deserts of Southern California. The Oberon Solar Project will add 500 megawatts of renewable energy and 500MW of battery storage, while projects in Arica and Victory Pass will produce 265MW and 200MW, respectively, with 400MW of battery storage. Full Story: Engineering News-Record (tiered subscription model)    


Construction underway on San Diego water purification

Eleven construction projects are now underway on a $1.5 billion initiative in San Diego to provide purified recycled water and reduce by almost half the waste the city discharges into the Pacific Ocean. The first phase of work will produce 30 million gallons of water daily by 2025, and the second phase will produce a further 53 million gallons a day by 2035. Full Story: KFMB-TV (San Diego)  


A look at the entertainment, stadium project pipeline

A $3 billion mixed-use development by Nuquest Ventures in Anaheim, Calif., heads a list of the country's top 10 major entertainment facility construction projects now being planned. The $6 billion Lincoln Yards project in Chicago tops a list of stadiums and arenas in various phases of design.  Full Story: Daily Commercial News (Ontario)



Mark Smith
California Builders Alliance
5370 Elvas Avenue ǀ Sacramento, CA 95819
Cell: 916.335.5072