from Mark Smith, Advocate, California Builders Alliance
The producer price index for inputs to new nonresidential construction rose 1.7% in April and 6.6% year over year, with energy-related inputs and metals seeing the steepest increases. The PPI for new nonresidential building construction increased only 3.6% year over year. "That gap is making it increasingly difficult for contractors to accurately price projects and raising the risk of delays, redesigns, and deferred construction activity if cost volatility persists," says Macrina Wilkins, director of market insights at the Associated General Contractors of America.
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Full Story: Associated General Contractors of America |
Multifamily construction starts have declined in the US, with only 55,000 units breaking ground in the first quarter of this year, according to Apartments.com and CoStar. The total number of units under construction fell to 579,000 at the end of the quarter, a 50% decline from the 2023 peak.
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Full Story: Bisnow (free registration) |
The consumer price index rose 0.6% in April and gained 3.8% from a year ago, marking the highest rate since May 2023, according to the Bureau of Labor Statistics. Meanwhile, a core measure that strips out the food and energy categories gained 0.4% for the month and 2.8% on a year-over-year basis.
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Full Story: CNBC (5/12), The Wall Street Journal |
Cash flow timing is limiting growth for commercial construction companies, according to a survey by Mobilization Funding. Ninety percent of respondents report passing on profitable projects because of cash flow issues, and all respondents say cash flow affects project decisions. Equipment availability is the top constraint, followed by working capital and bonding capacity, according to the survey.
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Full Story: For Construction Pros |
Construction employment increased by 9,000 jobs in April, driven by strong demand for nonresidential projects, particularly data centers, according to the Associated General Contractors of America. Nonresidential construction added 19,000 jobs, while residential construction lost 10,400. Average hourly earnings for construction workers rose to $38.73, a 4.8% increase from last year. AGC CEO Jeffrey Shoaf notes that community opposition to data center construction could impact future job growth.
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Full Story: Associated General Contractors of America |
The Dodge Momentum Index rose 6.2% in April, driven by an 8.1% increase in commercial planning and a 1.5% increase in institutional planning. Data centers were a major driver of growth, with notable projects including the $500 million Google Data Center in West Virginia and the $470 million Stargate Data Center in Texas.
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Full Story: Dodge Construction Network |
Tutor Perini projects significant growth in 2026 and 2027, fueled by megaprojects such as New York's Hudson Tunnel and California's high-speed rail. The company is also considering expanding into the data center market but remains focused on its core business. Tutor Perini reported $1.4 billion in quarterly revenue and $19.8 billion in backlog.
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Full Story: Construction Dive |
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Skanska sees minimal impact from economic, geopolitical issues |
Skanska's first-quarter earnings report shows the company has managed to navigate economic and geopolitical headwinds, including the start of the Iran War, with minimal impact. The firm reported a 5% increase in operating profit, driven by strong performance in construction, particularly in the US data center and infrastructure sectors. Skanska's backlog remains historically high, with significant projects such as the Vincent Thomas Bridge deck replacement and a new biology building at Texas A&M University.
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Full Story: Construction Dive |
WSP has reported a 4% increase in first-quarter revenue, driven by opportunities in artificial intelligence and power generation projects. CEO Alexandre L'Heureux highlights the impact of the TRC acquisition on the company's power and energy services and notes that AI tools have been rolled out to more than 30,000 employees, enhancing project quality and decision-making. WSP's backlog has reached a record CA$19.7 billion, with significant growth in sectors such as data centers, mining and digital solutions.
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Full Story: Construction Dive |
A report from CBIZ and the National Center for the Middle Market reveals a gap between construction firms' efficiency goals and technology investment. While 31% of respondents prioritize increasing efficiency, only 26% see technology investment as a key strategy. The report highlights the industry's traditional hands-on approach and reluctance to modernize, noting that technology such as AI and enterprise resource planning can enhance efficiency without replacing skilled labor.
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Full Story: For Construction Pros |
Jacobs CEO Bob Pragada says the investment cycle for AI "is still in the early stages" and that the company is doing well in it, with a large gain in business year over year. "We're seeing rising demand in semiconductors, water and energy and power as the technology and infrastructure go hand in hand," Pragada said on an earnings call.
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Full Story: Construction Dive |
AECOM has reported a 25.4% increase in profit for the fiscal second quarter, driven by investments in artificial intelligence and defense spending. AI tools have helped AECOM secure nearly $1 billion in contracts, while defense spending and power demand, particularly in nuclear fusion, have also contributed to growth. However, geopolitical instability in the Middle East has posed challenges.
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Full Story: Construction Dive |
A federal appeals court yesterday temporarily paused a lower court's ruling against the Trump administration's 10% global tariff imposed under Section 122 of the Trade Act of 1974. The tariffs, imposed in February after a Supreme Court decision to strike down most tariffs from 2025, are set to expire in July unless Congress extends them.
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Full Story: Reuters |
Hill County, Texas, has enacted a one-year moratorium on data center construction in unincorporated areas, citing public health and safety concerns. The decision, aimed at giving officials time to study the impact of data centers, comes amid a surge in data center proposals, including a notable 300-acre development by Provident Data Centers.
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Full Story: The Texas Tribune |
Data center slab design is shifting toward performance-driven construction, with an emphasis on mix optimization, subgrade engineering and placement execution as a unified system. This approach includes thicker slabs, engineered support systems, low-shrinkage mix designs, joint minimization and surface performance, setting a new standard for durability and long-term performance in concrete construction.
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Full Story: For Construction Pros |
The Federal Energy Regulatory Commission is considering a rule to extend federal oversight to large-load interconnections, driven by the rising power demands of artificial intelligence and hyperscale data centers. The rule could standardize interconnection procedures, influence how utilities manage large-load connections and raise questions about federal authority over transmission planning.
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Full Story: Engineering News-Record (tiered subscription model) |
Summer poses unique challenges for construction equipment lubrication due to higher temperatures, longer operating hours and increased exposure to dust and contaminants. Max Cundiff of Chevron says managers should not rely on the same lubrication practices used in cooler months. Instead, regularly assess operating conditions and adjust lubrication strategies accordingly, Cundiff says.
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Full Story: Construction Equipment Guide |
The San Francisco County Transportation Authority is managing a $350 million mobility project to support the development of 8,000 housing units and three new neighborhoods on Treasure Island and Yerba Buena Island in the San Francisco Bay Area. Key projects include the Yerba Buena Island West Side Bridges Seismic Retrofit Project, managed by a Golden State Bridge-Obayashi joint venture, and the Hillcrest Road Improvement Project.
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Full Story: Engineering News-Record (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