from Mark Smith, Advocate, California Builders Alliance
The long-term closure of the Strait of Hormuz because of ongoing conflict in Iran poses a significant risk to global energy markets and the economy, according to a Wood Mackenzie report. The report outlines three scenarios for resolving the conflict, with the worst-case scenario predicting a global recession and prolonged high energy prices.
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Construction employment increased in 32 states and D.C. between April 2025 and April 2026, with Texas adding 18,700 jobs and Louisiana seeing the largest percentage gain at 5.8%, yet the industry faces a critical shortage requiring 349,000 new hires in 2026 to meet demand as the U.S. population of 18-to-22-year-olds has peaked and Baby Boomers' share in construction dropped from 20.6% to 14.2% between 2019 and 2023. Immigration crackdowns have exacerbated the labor shortage, with construction jobs among likely undocumented immigrants dropping 7.5% in areas with recent ICE raids according to a National Bureau of Economic Research study, creating chilling effects that discourage immigrant participation even as the industry relies on foreign-born workers comprising 35% of the construction workforce to fill gaps left by an aging labor pool and declining interest from younger generations.
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Full Story: Fortune (tiered subscription model) Associated General Contractors of America |
The Architecture Billings Index declined to 48.3 in April from 49.8 in March, indicating a decrease in billings for architecture firms amid economic uncertainty driven by inflation and higher energy prices. The American Institute of Architects notes that the index has not surpassed 50 since January 2023. However, new project inquiries increased to 57.7, and firms specializing in multifamily residential and institutional projects reported higher billings.
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Full Story: The Architect's Newspaper |
The Environmental Protection Agency has allocated nearly $2.9 billion for the replacement of lead pipes across the US and its territories, with Illinois, Ohio and New York receiving the most money. The funding, distributed through the Drinking Water State Revolving Fund, will be used to identify and replace lead service lines, which pose significant health risks, especially to children.
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Full Story: The Construction Broadsheet |
Three-fifths of contractors surveyed by the Associated General Contractors of America and HCSS experienced at least one crash in highway work zones in the past year, with over half noting increased risks. The survey highlights distracted driving, inadequate enforcement and rising safety equipment costs as major factors, and suggests increased law enforcement presence, stricter laws on distracted driving and better training to improve safety.
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Full Story: AASHTO Journal |
Minneapolis Federal Reserve President Neel Kashkari emphasized that bringing down inflation remains his top priority, despite the labor market being in "decent shape." Federal Reserve Governor Lisa Cook says she is ready to increase interest rates if inflation remains high. "After five years of above-target inflation, I am particularly attuned to the risk that elevated inflation will become embedded in price- and wage-setting behavior," Cook says.
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Full Story: CNBC (5/27), American Banker Yahoo |
US Customs and Border Protection is set to disburse $20.6 billion in tariff refunds to importers who used the new web portal to file claims. However, CBP admitted to a significant error in its previous report, overstating the amount of refund claims being processed by $10 billion. The actual amount is closer to $25 billion.
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Full Story: Bloomberg Los Angeles Times (tiered subscription model) |
Data centers have been a major growth area for construction in the first quarter of 2026, driven by the artificial intelligence boom. Companies like Tutor Perini, Granite Construction, Fluor and Jacobs have reported significant involvement in data center projects. However, the sector faces challenges such as high energy demands and public opposition, leading to legal actions in some regions.
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Full Story: Construction Dive |
ERM has partnered with Blumen Systems to expedite complex project permitting, particularly for data centers. The collaboration leverages Blumen's AI and geospatial intelligence to navigate regulatory challenges, reduce site-related risks and accelerate project development.
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Full Story: Engineering News-Record (tiered subscription model) |
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EPA proposal could ease pre-construction for non-emitting sources |
The Environmental Protection Agency has proposed a rule that would allow pre-construction to begin on non-emitting components at facilities such as power plants and data centers before a Clean Air Act permit is obtained. The proposal would revise the definition of "begin actual construction" and add a definition for "pollutant-emitting activities." The Conference Board says this could shorten project timelines, but Harvard Law School's Environmental & Energy Law Program warns it could lead to increased emissions and negative environmental effects.
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Full Story: Engineering News-Record (tiered subscription model) |
Sacramento Regional Transit plans to begin construction in 2027 on a streetcar project across Tower Bridge, scaling it down to 1.8 miles and three stops from the original 4 miles and 21 stops. Funding remains a concern, as SacRT must start building within a year to retain federal funding. The $164 million project aims to connect Sutter Health Park and Downtown Sacramento, potentially attracting 750,000 riders annually.
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Full Story: CBS News |
Section 1 of the Los Angeles D Line Subway Extension Project has opened, adding three underground stations over nearly 4 miles. The $2.4 billion, 10-year project faced challenges including tunneling under Wilshire Boulevard and through tar sands, which required frequent safety checks for gas. The construction team also unearthed more than 500 Ice Age fossils, including a nearly intact mastodon skull.
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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
