from Mark Smith, Advocate, California Builders Alliance
Fed Policymakers Back Gradual Rate Cuts As Powell Prepares For Key Jackson Hole Speech
The Washington Post says, “Financial markets, economic officials, businesses and households nationwide are eager for any hints about when the Federal Reserve will ease up on the economy and cut interest rates.” This week may offer “the surest signal yet,” when Federal Reserve Chair Powell “delivers what will be his most important speech of the year on Friday morning. Analysts broadly expect that long-awaited cuts will begin at the Fed’s next meeting in September. Still, no one knows yet whether central bankers will opt for a more aggressive cut...or simply lower rates by a more typical quarter of a percentage point.” Powell “is unlikely to give much in the way of detailed specifics, if his track record is any guide. Instead, he’ll probably aim for carefully calibrated remarks that leave plenty of options on the table.” Similarly, the New York Times says while Powell “could use his speech to confirm that a rate cut is imminent ... most economists think that he will avoid detailing just how much and how quickly rates are likely to drop.” Meanwhile, Bloombergreports that in recent interviews, two other Federal Reserve officials – Boston Fed President Susan Collins and Philadelphia Fed President Patrick Harker – have been more explicit, saying they believe “it’s appropriate for the US central bank to begin lowering interest rates soon, and that the pace of subsequent cutting should be ‘gradual’ and ‘methodical.’” Still, “Neither provided more precision on what the terms mean for the frequency of cuts.”
Fed's Musalem: Rate cut could be necessary in Sept.
Federal Reserve Bank of St. Louis President Alberto Musalem could support a rate cut as soon as the central bank's September meeting. "The time may be nearing when an adjustment ... may be appropriate," Musalem said, given that labor markets no longer appear to be a threat to inflation.
Full Story: The Wall Street Journal (8/15), MarketWatch (tiered subscription model)
Economic data sets stage for Fed meeting
Economic data shows inflation has slowed, the labor market remains stable and the economy is not headed toward a recession. This sets the stage for a critical meeting this week for Federal Reserve policymakers in Jackson Hole, Wyo. Fed Chair Jerome Powell is largely expected to map out a course but likely wants to "give himself a little bit of room," says Quincy Krosby, chief global strategist at LPL Financial.
Full Story: CNBC Barron's Financial Times Bloomberg
Stress index posts sharp drop with rate cut expected
With lower interest rates in prospect, the number of construction project abandonments fell by 23.7% in July, according to the latest Project Stress Index from Cincinnati-based ConstructConnect. The overall index was down 14.2% for the month, including a 6.8% decline in delayed bid activity and a 10.6% drop in work put on hold, as "project owners are more convinced now than ever before that the Federal Reserve is destined to cut interest rates both sharply and in the immediate future," says Michael Guckes, ConstructConnect chief economist.
Full Story: Construction Dive
Architecture Billings Index shows slower rate of decline
The Architecture Billings Index for registered another decline at 48.2 in July, albeit a slower one than in previous months. American Institute of Architects economists have expressed confidence in the future with the growing likelihood of interest rate cuts.
Full Story: The Architect's Newspaper
Retail Theft Bill Package Signed Into Law
The California Builders Alliance has advocated in support of the package of 10 bills introduced by legislative leaders and signed into law by the Governor Newsom late last week as it will help protect businesses, enhance public safety, and promote a thriving commercial sector. The package includes new laws that crack down on shoplifting, theft from a vehicle, organized theft, and online marketplaces where these stolen goods are sometimes resold. While the passage of this legislative package marks significant progress, it doesn't fix the problem created with Proposition 47, thus the need to also pass Proposition 36 on the November 2024 ballot. However, we applaud the Governor and Legislature for their efforts to address this critical problem impacting our state.
How DOT staffing, contractor prevalence affect road costs
A university study has found an inverse correlation between staffing levels at state departments of transportation and road project costs. Another factor driving US transportation costs is less competition among contractors, as there are fewer of them. While there was a wide variation across states, in general, better-staffed DOTs produce lower-cost projects. Staffing in many departments has suffered significantly over the past 20 years.
Full Story: Construction Dive
US highways could become clean energy corridors
The US has built out a vast highway network under the Federal Aid Highway Act and now it's time to put that same infrastructure and land to work housing co-located renewables and transmission, assert Allie Kelly of The Ray and Pat Cummens of Esri. The setup is ideal because highways are already flanked by empty parcels where cumbersome reviews and eminent domain wouldn't be a concern, and leveraging them could help clear up interconnection queues quickly. The Ray and Esri have already developed a solar project alongside Interstate 85 in Georgia and are working on several similar projects in Maryland, Pennsylvania, Maine, Wisconsin, Minnesota and Florida.
Full Story: Cipher
Heat stress study continues in Aug.
Two hundred Midwest construction workers will be participating this month in the next phase of a major study on heat stress, according to project organizers. La Isla Network is leading the study in concert with Turner Construction, Flatiron Construction, Liberty Mutual Insurance and the Turner Construction Co. Foundation as well as Indiana University and the University of New Mexico.
Full Story: Safety + Health
How concrete makers plan to slash carbon emissions
The concrete industry is pulling out all the stops to try to reduce climate-damaging emissions. Mitchell Keller looks at various approaches to the challenge, including the search for a replacement for carbon-intensive Portland cement and reusing old concrete.
Full Story: Construction Briefing
Boise, Idaho, seeks contractors for $550M water project
Boise, Idaho, has issued a request for proposals as it seeks a construction manager/general contractor for the city's planned Recycled Water Program Improvement project. The work is estimated at $550 million and will include a transmission system, a recycled water facility to handle 6 million gallons of used industrial water daily and a groundwater recharge facility.
Full Story: The Construction Broadsheet
How AI is gaining traction in construction
Artificial intelligence and machine learning are gaining ground and expanding the scope of their applications across the construction industry. Mary K. Pratt looks at examples in 12 areas, including design, back-office tasks, market analysis and sustainability.
Full Story: TechTarget
$400M project to upgrade border sewage treatment
The International Boundary and Water Commission has awarded the International Wastewater Treatment Plant in California's Tijuana River Valley a $400 million contract for much-needed upgrades. The project is expected to take about five years and double treatment capacity to 50 million gallons a day with a peak hydraulic flow capacity of 75 million gallons per day.
Full Story: BorderReport
Long-awaited LAX train project marks progress
The last four train cars have arrived for Los Angeles International Airport's $2 billion train system as the project aims for a January 2026 opening. Construction has been underway for more than five years on the Automated People Mover, which in total will be served by 44 train cars.
Full Story: KCBS-TV/KCAL-TV (Los Angeles)
Photos reveal progress on Calif. casino complex
Photos show progress in first-phase casino construction at the future Hard Rock Hotel & Casino Tejon complex in Mettler, Calif. When finished as expected late next year the complex will span 700,000 square feet offering 400 hotel rooms, convention space and an entertainment venue.
Full Story: KGET-TV (Bakersfield. Calif.)
$2B NBA Intuit Dome opens in Inglewood, Calif.
A concert celebrated the opening last week of the $2 billion Intuit Dome in Inglewood, Calif., the NBA's newest arena. The event marked the end of nearly three years of construction by a joint venture of AECOM Hunt and Turner on a venue that offers 17,700 seats, five basketball courts, a training center and outdoor plaza.
Full Story: Construction Dive
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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
