From Mark Smith, Advocate, California Builders Alliance
Payroll employment increases by 187,000 in August; unemployment rate rises to 3.8%
Total nonfarm payroll employment increased by 187,000 in August, and the unemployment rate rose to 3.8 percent. Employment continued to trend up in health care, leisure and hospitality, social assistance, and construction. Employment in transportation and warehousing declined.
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Consumer Spending Posted Strong Rise In July
The Wall Street Journal reports consumer spending was up 0.8% in July, the Department of Commerce reported on Thursday, while June’s initial reading of a 0.5% gain was revised upward to 0.6%. Adjusted for inflation, consumer spending was up 0.6% last month. Reuters reports that consumer spending “increased by the most in six months in July as Americans bought more goods and services,” but the “current pace of increase in consumer spending is...unlikely sustainable. Households are drawing down excess savings accumulated during the COVID-19 pandemic.”
Federal Reserve’s Preferred Inflation Gauge Up 0.2% In July, 3.3% Over Last Year
Reuters reports inflation “as measured by the personal consumption expenditures (PCE) price index rose 0.2% last month, matching June’s gain. Food prices climbed 0.2% and energy edged up 0.1%. In the 12 months through July, the PCE price index increased 3.3% after advancing 3.0% in June.” The core PCE, which excludes volatile food and energy prices was up 0.2% month-over-month, and 4.2% over July 2022, “after rising 4.1% in June.” The PCE index is considered a key inflation gauge by the Fed. The Hill reports the “upward move in the PCE index comes after another important price measurement, the Consumer Price Index (CPI), rose for the first time this year in July. Prices had been steadily declining since last summer.”
Danger of heat exposure gets attention from states
Exposure to extreme heat is taking a mounting toll on workers because no clear regulatory authority is in force at the federal level. However, more states are directing attention to the problem, with "a lot of positive movements that give me some hope," University of Arizona assistant professor Ladd Keith says. Full Story: The Associated Press
Permits down sharply for housing with at least 5 units
Permits issued for buildings with five or more units fell 32% in July compared with July 2022, while starts in the category edged up a seasonally adjusted 0.4%, according to data from the Department of Housing and Urban Development and the Census Bureau. Apartment completions declined 23%, while overall housing starts increased 5.9%. Full Story: Multifamily Dive
Treasurys rally on weak jobs, consumer confidence data
Treasury yields fell to their lowest levels in over a week Tuesday after disappointing data on job creation and consumer confidence reinforced the belief that the Federal Reserve will not raise interest rates further this year. "The combination [of] jobs data and consumer confidence has extended the rally [in Treasurys] significantly," BMO Capital Markets strategist Ben Jeffery wrote in a note.
Full Story: Bloomberg
Studies: Zoning code changes help boost housing
Modifications to zoning codes are proving effective at boosting the volume of housing and making it cheaper, according to several new studies. The mounting evidence suggests that "state and local officials who are concerned about housing affordability should follow the science and reform their land-use policies," writes Adam Millsap, a senior fellow for economic opportunity issues at Stand Together and Stand Together Trust. Full Story: Forbes (tiered subscription model)
Worker shortage could lead to CHIPs project delays
Many manufacturers and construction companies are hamstrung by a combination of retiring workers and a lack of interest from younger generations. There are nearly one million US job openings in construction and manufacturing, and an anticipated two million-person shortage of machinists and welders in the coming years could delay CHIPS Act-related projects. "A lot of the workforce that's been engaged in those roles is retiring and we're not replenishing the workforce with new recruits into these jobs, said Aidan Madigan-Curtis, partner at venture capital firm Eclipse, who added younger generations grew up with a different idea of a well-paying job and meaningful work. Full Story: Fox Business
New normal seen in commercial construction
Commercial construction has seen some relief from recent supply chain constraints, but there's a "new normal" emerging that is forcing the industry plan further ahead, industry observers say. CBRE's construction cost index has taken a rollercoaster ride since the lead-up to the pandemic, but the index has dropped from 14.5% last year to a forecast 5.4% for 2023. Full Story: Las Vegas Review-Journal (tiered subscription model)
Energy Dept. targets $300M for transmission projects
States and tribes as well as local governments stand to benefit from $300 million in grants to be distributed by the Energy Department for transmission and other qualifying projects. The goal is to step up construction of infrastructure needed to meet the goal of 100% clean energy by 2035. Full Story: Engineering News-Record (tiered subscription model)
US hotel project pipeline leads the world
The US accounts for 38% of the hotel construction projects currently in the pipeline globally, according to Lodging Econometrics. That puts the US in first place, with the overall project count up 3% year over year at the end June. Full Story: The Construction Broadsheet
Prefab, modular building make inroads with contractors
Prefabrication and modular construction are winning favor with contractors in response to both labor shortages and demand from clients. Industry figures attending the recent Associated General Contractors of America's IT Conference in Chicago reflected on the advantages and shared how they're exploring the prefab environment, in which "you're no longer a contractor, you're behaving like a manufacturer," says Christian Burger, president of Burger Consulting. Full Story: Engineering News-Record (tiered subscription model)
Las Vegas-to-L.A. rail could break ground this year
Brightline's high-speed rail line linking Las Vegas and Los Angeles is expected to begin construction by year-end if federal funds are forthcoming. Taylor Lane gives a rundown of what to expect from the project, which could start service in 2027. Full Story: Las Vegas Review-Journal (tiered subscription model)
Developer, site picked for naval station redevelopment
A former naval weapons station north of Concord, Calif., will be redeveloped to provide housing and commercial space, with Brookfield Properties as master developer. The city's vision calls for 13,000 housing units over the 2,300-acre site, about half of which will be a park honoring former Supreme Court Justice Thurgood Marshall. Full Story: KNTV-TV (San Francisco)/Bay City News Service
Funding advances Calif. state Route 37 project
A plan to raise California's state Route 37 30 feet above Novato Creek has advanced with the state Transportation Commission's approval of $155 million for the project. The funding from the bipartisan infrastructure law covers most of the $180 million cost of the project. Full Story: Transportation Today
Large mixed-use project in Calif. advances
A mixed-use project spanning 116 acres near Fallbrook, Calif., is advancing with clearance by the San Diego County Board of Supervisors. The Campus Park West Project, planned by developer Pappas Investments, will offer 283 condominiums, 513,000 square feet for commercial purposes, 120,000 square feet for industry and 31 acres of open space. Full Story: Times of San Diego
San Diego children's hospital building $1.4B tower
Rady Children's Hospital in San Diego has broken ground on a 500,000-square-foot intensive care unit and emergency services pavilion. The seven-story tower's cost is estimated as high as $1.4 billion, making it the largest single project in the hospital's history. Full Story: Times of San Diego
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
