December 2019

By Greg Sitek 

December is many things…

Probably the busiest month of the year. Certainly, one of the most traveled with the holiday shopping, visits and celebrations. It’s also that time when we start collecting the detailed information that goes into closing out the year’s activities – domestic, business and work related. It’s that time when circumstances force us to reflect on our lives as we gather the information and details to do these things. 

How has construction done for the year?

Actually not bad… According to the The Dodge Momentum Index it increased 6.9% in October to 152.6 (2000=100) from the revised September reading of 142.7. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. October’s increase was due entirely to a recovery in institutional planning projects, which had stepped back over the previous few months. Institutional planning moved 22.8% higher in the month while commercial planning lost 0.5%. 

Despite the October increase, institutional projects entering planning remain 4.3% lower on a year-over-year basis compared to October 2018. Commercial projects meanwhile are 14.3% higher than October 2018 as several mega projects have entered the early stages of planning over the last several months. The overall Momentum Index is 6.7% higher than a year ago, although its level remains below the July 2018 peak.

In October, 24 projects each with a value of $100 million or more entered planning. The leading institutional projects were the $470 million Orlando Health Hospital in Lake Mary FL and a $356 million renovation project at the Rockrimmon Elementary School in Colorado Springs CO. The leading commercial projects were a $250 million office building in Brooklyn NY and the $188 million Spirit Airlines Headquarters in Dania Beach FL.

As for our highways, there is or soon will be a bill in the senate for a new bill meanwhile, according to ARTBA The Senate passed a bundle of – FY 2020 spending bills, H.R. 3055 including one funding the U.S. Department of Transportation programs – in a modest sign of progress toward implementing full-year spending levels before the current spending law expires Nov. 21.  The House passed its version of the package June 25.

The Senate-passed legislation contains full-funding at authorized levels for highway and airport construction programs but falls short for public transportation capital grant programs.  Following recent precedent and in accordance with the two-year bipartisan budget agreement reached in July, the legislation also includes additional funding from the General Fund on highway, transit and airport programs beyond the authorized spending levels. More information available at 

http://www.site-kconstructionzone.com/?p=17393

While the new highway bill still remains a “wishful thought” Voters in 19 states Nov. 5 sent a decisive message of support for transportation investment, approving almost 90 percent of 305 state and local transportation ballot measures, also according to ARTBA.
 
In total, the 270 approved initiatives are expected to generate over $9.6 billion in one-time and recurring revenue, according to the analysis conducted by the American Road & Transportation Builders Association’s Transportation Investment Advocacy Center™ (ARTBA-TIAC). Two measures in Texas are still pending.
 
“The ballot results are a great reminder infrastructure investment remains one of the few areas where red states, blue states, Republicans and Democrats can all come together,” ARTBA President Dave Bauer said.  “It should also demonstrate to lawmakers on Capitol Hill that the public will be on board for the passage of a long-term bill that significantly boosts highway and transit investment at the federal level.”
 
A complete report and an all-new interactive dashboard that filters results by state, mode, year and type of initiative are available at the Center’s flagship website: www.transportationinvestment.org or http://www.site-kconstructionzone.com/?p=17400

And, AGC reported similar good news, Construction employment increased by 10,000 jobs in October and by 148,000, or 2.0 percent, over the past 12 months, while construction spending decreased by 2.0 percent from September 2018 to September 2019, according to an analysis of new government data by the Associated General Contractors of America. Association officials said demand for construction is being undermined by uncertainty and tariffs that are part of a series of trade disputes with China, the European Union and other countries.

“The construction industry is still adding workers at a faster clip than the overall economy but growth has slowed as private nonresidential and multifamily construction spending shrinks,” said Ken Simonson, the association’s chief economist. “At the same time, public investment and a recent pickup in single-family homebuilding have helped employment to grow.” See full report at https://www.agc.org.

As we close the books on 2019 we can look back a say, “It really wasn’t a bad year for the industry and the economy.” Of course that begs the question, “What will 2020 look like?”  We’ll have to wait and see. Meanwhile, enjoy the holiday season and have a Merry Christmas and Happy New year.

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