Tag Archive for 'Associated Builders and Contractors'

ABC Reports: Construction Materials Prices Inch Higher in June

CEU2“Prices for inputs to construction industries have now risen in five of the year’s first six months.” —ABC Chief Economist Anirban Basu.

PPI July 2014Overall construction materials prices increased by 0.1 percent in June and are up 1.9 percent year over year, according to the July 16 producer price index release by the U.S. Department of Labor. Nonresidential construction materials prices also expanded 0.1 percent for the month and are 1.4 percent higher than one year ago.

“Prices for inputs to construction industries have now risen in five of the year’s first six months,” said Associated Builders and Contractors Chief Economist Anirban Basu. “This marks a significant departure from the previous year’s remarkable stability. Recent monthly gains have been modest—0.1 percent in June and unchanged in May; however, the surprisingly upbeat economic news from China (Chinese GDP grew 7.5 percent in the second quarter), along with a slew of large construction starts in specific regions of the U.S., suggest that prices may continue to rise—albeit modestly— through the second half of 2014.

“A number of international conflicts could apply upward pressure on material prices,” said Basu. “The Middle East is as turbulent as ever and as construction volume increases, any supply-related disruptions could lead to a period of meaningful price inflation.

“The effects of the metal financing scandal at Qingdao port in China—the world’s seventh busiest port— are also yet to be seen,” said Basu. “In May, Chinese authorities launched an investigation into Decheng Mining, a private metals trading firm that used fraudulent warehouse receipts to obtain several loans against a single cargo of metal. As more firms take legal actual against Decheng, we simply do not know the extent to which the financing fraud will impact the metals market.”

Crude energy materials prices expanded 1.2 percent in June and are 6 percent higher than one year ago. Natural gas prices fell by 1.5 percent in June and have now fallen in three of the past four months. Overall, the nation’s wholesale goods prices expanded by 0.4 percent in June and are up 1.9 percent year over year.

The following materials prices increased in June.

Crude petroleum prices increased 3.2 percent in June and are up 5.6 percent from June 2013.

Crude energy materials prices expanded by 1.2 percent in June and are 6.0 percent higher year-over-year.

Softwood lumber prices expanded 2.3 percent and are 7.3 percent higher than one year ago.

Prices for plumbing fixtures expanded 0.4 percent in June and are up 2.4 percent on a year-over-year basis.

Concrete products prices expanded 0.4 percent in June and are up 3.5 percent on a yearly basis.

Steel mill products prices rose 0.5 percent for the month and are 4.1 percent higher than one year ago.

Five of the 11 key construction inputs did not experience price increases for the month.

Prices for prepared asphalt, tar roofing, and siding declined 1 percent for the month and are down 6.6 percent on a year-over-year basis.

Fabricated structural metal product prices remained flat for the month but have increased 1.3 percent on a year-over-year basis.

Iron and steel prices declined 0.2 percent in June but are up 4.6 percent from the same time last year.

Nonferrous wire and cable prices remained flat on a monthly basis but are down 1.6 percent from June 2013.

Natural gas prices shed 1.5 percent in June but are 12.9 percent higher than one year ago.

To view the previous PPI report, click HERE

ABC Reports: Construction Adds Jobs in June but Nonresidential is Sluggish

CEU2“Given that the economy added over 200,000 jobs for the fifth consecutive month in June, there is some optimism about improvement in the second quarter; however, the lack of monthly construction employment growth, particularly in the nonresidential sector, is troubling.”—ABC Chief Economist Anirban Basu.

Employment_7.3The U.S. construction industry added 6,000 jobs in June, according to the Bureau of Labor Statistics (BLS) July 3 report; however, nonresidential construction added only 700 of those jobs and the heavy and civil engineering sector lost 700 jobs.

“Although nonresidential construction’s performance is somewhat disappointing, the general tenor of today’s employment report is upbeat. It is worth noting that nonresidential construction tends to lag that of the overall economy,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Today’s jobs number are largely of a reflection of the softer growth recorded by the U.S. economy for much of last year and during the initial months of 2014.

“Given that the economy added over 200,000 jobs for the fifth consecutive month in June, there is some optimism about improvement in the second quarter; however, the lack of monthly construction employment growth, particularly in the nonresidential sector, is troubling.” said Basu.

“Although the national construction unemployment rate stands at 8.2 percent on a non-seasonally adjusted basis, there are parts of the nation in which unemployment is far lower,” Basu said. “In fact, there are emerging shortages of industrial construction workers in growing segments of the south, which will trigger large increases in wages and per diems during the year ahead. By contrast, there are communities in which construction unemployment remains well above the 8.2 percent average, suggesting that wage inflation will only be meaningfully experienced in certain communities.”

According to the BLS household survey, the national unemployment rate fell to 6.1 percent in June, reaching its lowest level since September 2008. The civilian labor force expanded by 81,000 in June.

Individual sectors saw the following changes:

Nonresidential building construction employment increased by 2,100 jobs for the month but is up by 22,200 jobs, or 3.3 percent, since June 2013.

Residential building construction employment rose by 4,500 jobs in June and is up by 50,600 jobs, or 8.3 percent, on an annual basis.

Nonresidential specialty trade contractors lost 1,400 jobs for the month but employment in that category is up by 29,500 jobs, or 1.4 percent, from the same time last year.

Residential specialty trade contractors gained 2100 jobs in June and have added 55,700 jobs, or 3.6 percent, since June 2013.

The heavy and civil engineering construction segment lost 700 jobs in June but job totals are up by 28,300, or 3.2 percent, on a year-over-year basis.

To view the previous Spending report, click here

ABC Reports: Nonresidential Construction Spending Continues to Expand in May

CEU2“Today’s release helps confirm ABC’s notion that the winter decline in nonresidential construction spending was largely due to unusually harsh weather as opposed to shifting economic fundamentals.”—ABC Chief Economist Anirban Basu.

Spending_7 1Nonresidential construction spending expanded in May for the second consecutive month (based on revised data), according to a July 1 release from the U.S. Census Bureau. Nonresidential construction spending rose 1.1 percent on a monthly basis in May and has increased 6.4 percent on a year-over-year basis. Spending for the month totaled $596.2 billion on a seasonally adjusted, annualized basis. Additionally, nonresidential construction spending for April was revised upward from $570.6 billion to $589.9 billion.

“Nonresidential construction spending is now at its highest level since October 2009, though that does not account for the cost of inflation,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “Today’s release helps confirm ABC’s notion that the winter decline in nonresidential construction spending was largely due to unusually harsh weather as opposed to shifting economic fundamentals.”

“ABC’s economic forecast continues to call for ongoing healing in the industry,” said Basu. “Given recent hiccups in U.S. macroeconomic performance, as measured by gross domestic product, and public funding constraints, gradual recovery is perhaps the best the overall industry can anticipate.”

Eleven of 16 nonresidential construction subsectors posted increases in spending in May.

Office-related construction spending grew 0.6 percent in May and is up 18.9 percent from the same time one year ago.

Construction spending in the transportation category expanded 2.2 percent on a monthly basis and has risen 7.5 percent on a year-over-year basis.

Religious spending grew 1.4 percent for the month, but is down 3.9 percent from the same time last year.

Sewage and waste disposal-related construction spending gained 4 percent for the month, but has fallen 1.3 percent on an annual basis.

Amusement and recreation-related construction spending expanded 3.1 percent on a monthly basis and is up 8.5 percent from the same time last year.

Conservation and development-related construction spending increased 1.2 percent for the month and is up 16 percent on a yearly basis.

Highway and street-related construction spending expanded 0.7 percent in May and is up 2.3 percent compared to the same time last year.

Communication construction spending grew 2.3 percent for the month, but is down 1.1 percent from the same time one year ago.

Public safety-related construction spending expanded 0.3 percent on a monthly basis, but has declined 10.9 percent on a year-over-year basis.

Power construction spending grew 3.9 percent for the month and was 25.9 percent higher than the same time last year.

Spending in the water supply category expanded 8.5 percent for the month and is unchanged year over year.

Spending in five nonresidential construction subsectors declined in May.

Manufacturing-related spending fell 1.4 percent on a monthly basis, but is up 6.3 percent compared to the same time last year.

Health care-related construction spending fell 1.6 percent for the month and is down 10.1 percent from May 2013.

Education-related construction spending fell 0.5 percent for the month and is down 0.8 percent on a year-over-year basis.

Commercial construction spending fell 1.1 percent in May, but is up 4.6 percent on a year-over-year basis.

Lodging construction spending is down 1.2 percent on a monthly basis, but is up 11.4 percent on an annual basis.

To view the previous Spending report, click here.

ABC Celebrates Supreme Court’s Recess Appointment Ruling

image007Associated Builders and Contractors (ABC) today celebrated the Supreme Court’s decision in National Labor Relations Board v. Noel Canning that President Obama unconstitutionally bypassed the U. S. Senate by appointing Sharon Block, Richard Griffin and Terrence Flynn to fill National Labor Relations Board (NLRB) vacancies.

“By upholding the U.S. Court of Appeals’ decision, the Supreme Court has reaffirmed the Senate’s role in the executive appointment process,” said ABC Vice President of Government Affairs Geoff Burr. “Today’s ruling overturning President Obama’s illegal recess appointments to the NLRB is a victory for ABC, the Constitution and our system of checks and balances, and it serves as a clear rejection of the president’s unprecedented expansion of executive authority.

The original case was brought by Noel Canning, a Washington state bottling company, which challenged an NLRB decision that it must enter into a collective bargaining agreement with a labor union. The ABC-led Coalition for a Democratic Workplace intervened in the case and, last January, the U.S. Court of Appeals for the D.C. Circuit ruled that the president violated the Constitution when he bypassed the Senate to fill NLRB vacancies.

In addition to reaffirming the legislative branch’s role in the presidential appointee confirmation process, today’s Supreme Court ruling jeopardizes the legal status of more than 1,000 Board actions over the past two years.

ASCE Reports on Gas Tax Increase, Highway Trust Fund Shortfall, Important Bill Stall

Our transportation infrastructure has become a major issue as current funding faces a serious shortfall. More than halfway through the year and most road repairs are still waiting to be started let alone completed. If the country faces another winter like the one that just passed, we’ll need tanks or half-tracks to navigate the pot-hole dominated transportation infrastructure. The American Society of Civil Engineers (ASCE) as well as other associations, such as American Road & Transportation Builders Association (ARTBA) and Association of Equipment Manufacturers (AEM), are growing more concerned as Congress continues to battle over possible solutions to this problem.

Over the years a number of solutions have been proposed and all have been rejected because party politics are more important than user needs. ASCE has posted a number of statements on this situartion.

{08d819bc-1d22-4dd2-80f4-4bea43d54eb4}_ASCE_GovernmentRelations_WashingtonBipartisan Senate Duo Calls for Gas Tax Increase

U.S. Senators Chris Murphy (D-CT) and Bob Corker (R-TN) released a plan on Wednesday to raise the federal fuels tax and index it to inflation. Their proposal would increase the gasoline and diesel fuel tax (currently at 18.4 cents and 24.4 cents per-gallon, respectively) by 6 cents per gallon in each of the next two years, for a total rise of 12 cents, and index that tax to inflation using the Consumer Price Index (CPI). The plan would also include a tax relief offset to minimize the fiscal strain placed on consumers and businesses from any future rate hike. ASCE Executive Director Patrick Natale, P.E., applauded the announcement, calling it, “an encouraging step to improve our economy and raise the grades on the nation’s surface transportation infrastructure.” It is estimated that the proposal would raise enough revenue to fund federal surface transportation programs at current levels, and provide for a very slight increase in the out years because of indexing.

Late last year, ASCE supported legislation introduced by Congressman Earl Blumenauer (D-OR), H.R. 3636, the “UPDATE Act of 2013,” which would increase the fuels tax by 15 cents per gallon over the course of three years and also index it for inflation. This Congress marks the first time, in a long time, that both the House and Senate have openly discussed, and had members endorse, increases in the federal gas tax. Prospects of this Congress actually enacting such a measure remain unclear, though the best chance may be in the interim legislative period known as the “lame duck” session which begins after the November election and could stretch until the end of December. ASCE will continue to urge Congress to enact legislation that provides a significant, long-term sustainable funding source for surface transportation programs and projects.

New Report Looks for Solutions to the Highway Trust Fund Shortfall

On Wednesday, joining a chorus of advocates looking to move on the Highway Trust Fund, the Committee for a Responsible Federal Budget (CRFB) released a new report looking for solutions.

In the paper, CRFB calls for a long-term solution, which brings highway spending and revenue in line. Short of that, they also suggest that transferring money into the Trust Fund from general revenue would be acceptable if and only if that transfer is fully paid for with other spending cuts or revenue increases. The paper includes a huge number of potential options to help close the Highway Trust Fund shortfall that help add to the policy debate on Capitol Hill.

Read the report

Senate Debate on Combined Transportation, Science Appropriations Bill Stalls

On Thursday, the U.S. Senate pulled three fiscal year (FY) appropriations bills – Commerce, Justice and Science; Transportation, Housing and Urban Development; and Agriculture – from the floor because there was not agreement on how to proceed with votes over amendments. The Senate had originally planned to debate the bills into next week with hope of speedy passage. The U.S. House of Representatives has already held votes on Commerce, Justice and Science, and Transportation, but has not yet passed Agriculture.

On Transportation, the House approved legislation to fund the U.S. Department of Transportation (USDOT) at a slightly lower amount than is contained in the Senate bill. Both the House and Senate provide $40.3 billion for highways, and the House provides $600 million less for transit, $450 million less for TIGER grants, $130 million less for the Federal Aviation Administration (FAA) and $200 million less for Amtrak.

The Commerce, Justice and Science section provides a total of $51.2 billion in proposed discretionary budget authority for programs at the Departments of Commerce and Justice, the National Science Foundation (NSF) and the National Aeronautics and Space Administration (NASA). This is a decrease of $398 million below the fiscal year 2014 level and is funded at the same amount as the bill that cleared the House, although the two chambers’ versions differ in details. Specifically, the Senate bill provides:

• $7.2 billion for NSF, an increase of $83 million over fiscal year 2014. The House version provides $7.4 billion.
• $900 million for NIST, $50 million above the fiscal year 2014 enacted level. The House version contains $856 million for NIST.
• $17.9 for NASA, $254 million above the fiscal year 2014 enacted level. The House version also funds NASA $17.9 billion.

Should the Senate quickly resume debate and adopt these appropriations bills and should the House approve Agriculture, there exists sufficient time before the August recess for both chambers to remedy any differences and enact legislation on-time before the start of the new fiscal year on October 1. However, if recent history is any indicator, it is more likely that an appropriations patch, or “continuing resolution”, of some short-term length will be required this fall.

ASCE has been urging Congress to agree on a fix for the Highway Trust Fund which is facing insolvency in the next couple of months. Appropriations bills and current enacted funding levels will be inadequate to prevent a funding crisis if there is not enough money in the trust fund to provide project reimbursements. That is why ASCE is urging the public to act now and tell their Members of Congress to “Fix the Trust Fund“.