It’s been a long year but we survived it. The elections are over and the world is looking ahead to see what emerges and evolves.
As you might expect all the industry associations have published congratulatory statements to president-elect Donald Trump. I have participated in a Wells Fargo webinar that looked at the some of the possibilities we could expect in the coming year under a new administration. The projections are positive especially for our infrastructure.
ASCE – Civil Engineers Urge President-Elect Trump To Fulfill Vow To Invest In America’s Infrastructure
The following is a statement by Norma Jean Mattei, Ph.D., P.E., F. SEI., F. ASCE, president of the American Society of Civil Engineers (ASCE), on the election of Donald J. Trump as the next President of the United States:
“The American Society of Civil Engineers (ASCE) congratulates President-elect Trump upon his election and urges prompt action on his ambitious plan to repair and modernize our nation’s infrastructure and foster economic growth. Infrastructure is the very backbone of our nation’s economy, yet ASCE’s 2013 Report Card for America’s Infrastructure gave the nation’s infrastructure a cumulative grade of ‘D+.’ An economic study we released earlier this year found that the U.S. is on track to invest only half of what is needed in infrastructure over the next decade. A continued failure to act will result in significant consequences for our economy and for American families, who lose $3,400 a year due to aging infrastructure.
“If invested wisely, President-elect Trump’s proposed $1 trillion investment in infrastructure represents an important step toward closing the investment gap to raise the grade and achieve a globally competitive American infrastructure system fit for the 21st century. ASCE and its 150,000 members call on President-elect Trump and the 115th Congress to prioritize infrastructure repair, replacement, and modernization, to improve our economy, public health, and safety, so that every family, community, and business can thrive.”
The American Road & Transportation Builders Association (ARTBA) President & CEO Pete Ruane Statement on the Election of Donald Trump:
“President-elect Trump will have a ‘can do’ industry as his partner in rebuilding and expanding the nation’s transportation infrastructure to make it again second to none. Give us the proper resources and the new jobs and innovative solutions will take off.
“Republicans in Congress should heed the call of their party’s leader and make urgently-needed improvements of national infrastructure networks a top priority in early 2017.
“Despite a highly partisan political environment, Republicans and Democrats have routinely worked in a bipartisan manner to support infrastructure legislation. All sides should view a long-term infrastructure package as an opportunity for the two parties to come together and make meaningful progress for the American people.”
Other industry associations and organizations have published similar statements. The timing couldn’t be better for CONEXPO CON/AGG 2017, Las Vegas, Nevada March 7-11, 2017.
The Association of Equipment Manufacturers (AEM) and the Committee for European Construction Equipment (CECE) have signed a cooperative agreement that will help promote visibility for AEM exhibitions worldwide and a positive global business environment for exhibitors as well as visitors.
Sigrid de Vries, CECE secretary general, and Megan Tanel, AEM senior vice president, signed the CECE International Exhibition Partnership Programme agreement during AEM’s recent annual conference of member companies.
CECE represents the European construction equipment sector and its 13 national construction equipment manufacturing associations.
AEM is the North American-based international business group representing the off-road equipment manufacturing industry. A key service is organizing global trade exhibitions, including CONEXPO-CON/AGG, held every three years in Las Vegas, USA.
Under the agreement, AEM becomes a gold-level participant in CECE’s Exhibition Partner Programme, which provides promotional and other business-development services.
Construction equipment trade exhibitions play a vital role in encouraging and enhancing business relationships for manufacturers, suppliers, service providers and customers, and CECE explains it offers this coveted patronage to a limited number of leading sector exhibitions to fortify relations and contribute to successful trade fairs.
Longtime cooperation between CECE & AEM
Bernd Holz, CECE president and director of Ammann Verdichtung GmbH and Ammann sales director Europe, stated: “AEM and CECE are key partners on the international stage, both with regard to cooperation on regulatory matters as well as fostering business opportunities through major trade exhibitions around the world. With the new partnership agreement, we underline and reinforce our long-standing relations, keeping a clear focus on both our member companies’ needs. I’m looking forward to a successful partnership.”
Michael A. Haberman, AEM chair and president of Gradall Industries, stated: “AEM has enjoyed a longstanding and very good relationship with CECE as we work on behalf of equipment manufacturers and service providers towards an improved business environment around the globe for all industry stakeholders. AEM trade shows are known as industry gathering places providing unparalleled ROI and this valued CECE support strengthens that relationship and our future endeavors.”
Job Gains Support FOMC Move
Nonfarm payrolls rose 178,000 in November. Job growth has averaged 176,000 over the past three months, with private sector payrolls up an average of 165,000 amid strength in the service sector, especially professional & business services (top chart). These gains are consistent with solid consumer spending and continued economic growth. Aggregate hours worked are up a healthy 2.7 percent annualized over the past three months.
The unemployment rate declined to 4.6 percent as the labor force participation rate once again slid. On balance, these results remain within the FOMC’s range for full employment and indicate the labor market continues to tighten. The U-6 unemployment rate, a focus of President- elect Donald Trump, declined to 9.3 percent, marking a new cycle low.
In contrast, manufacturing payrolls were down 4,000 in November. The distinction between nondurables (up over the past year) and durables (down over the same period) persists. The factory sector continues to face the usual headwinds, including a strong dollar and sluggish growth abroad, but recent data suggest manufacturing has begun to firm, which should bode well for payrolls in this sector going forward. Construction jobs rose 19,000 in November and these gains are consistent with improvement in housing and nonresidential construction.
Wage Growth Soft in November, Real Wages Up Over the Year
Average hourly earnings disappointed in November, declining 0.1 percent. Earnings are still up 2.5 percent over the past year and add to the evidence of a tightening labor market. Wage gains remain widespread across industries (middle chart). Over the past year, wage gains of 2.5 percent exceeded the rise in the Consumer Price Index of 1.6 percent, thereby resulting in real wage gains and providing support for improved consumer spending. Wages in sectors such as leisure & hospitality, information and construction have recorded strong gains over the past year.
Unit Labor Costs and Profits as the Business Cycle Ages
Rising labor compensation in the face of small gains in labor productivity gives rise to higher unit labor costs and profit pressures in an aging business cycle. A tighter labor market should prompt a continued strengthening in wage growth now that we are in the range of full employment, and this is what we have witnessed over the past year. Given the absence of a pickup in productivity growth, rising unit labor costs will force companies to either accept lower profit margins or pass the costs onto consumers through higher prices. A combination of the two is typical, with profit growth slowing and inflation rising when the economy reached full employment in previous cycles (bottom chart). A third door remains open if the economy can pick up the pace of growth—we shall see.
* Last week the US Geological Survey hosted a public briefing on its work to develop a database on the greenhouse gas emissions associated with extraction of fossil fuels from federal lands. In January 2015, Interior Secretary Jewell asked the USGS to establish and maintain such a public database. The meeting provided a briefing on the basic methods, data sources, and likely format and content of project output. Results and data were not presented; watch for that information next year. USGS data covered carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) emissions.
* Oregon’s Department of Environmental Quality is conducting a study on how a market-based approach to reducing greenhouse gas emissions might work in Oregon. DEQ has to report to the State legislature when it reconvenes in February. DEQ has released a “partial draft study” for public review. The work so far is focused on a “cap-and-trade” program that would be compatible with the Western Climate Initiative’s multi-jurisdiction carbon market. Comments on the draft are due December 22, the same day as a public meeting.
* Cushy gubmint jobs: “Religious Compensatory Time.” Who knew, right? Federal employees can adjust work schedules to earn time off for religious purposes via compensatory time, earned in advance or repaid after the religious observance. EPA’s Inspector General reports that one extremely devout EPA employee received a retirement payout of $32,469 for accumulated religious compensatory time. Thirteen co-workers received a total of $41,045. Without policy changes, future payments could total up to $81,927. Pretty soon that turns into real money, huh? The IG does write, however, that that first employee did “earn” his/her time; now I feel better. 😀