Tag Archive for 'pavement'

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ABC Reports: Nonresidential Spending Thrives in Strong November Spending Report

Nonresidential construction surged in November, according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors (ABC). Nonresidential spending expanded to $712.4 billion on a seasonally adjusted, annualized rate in November, representing the highest level of spending in eight years.

October’s figure was upwardly revised by 1 percent (from $699.7 billion to $706.5 billion), while September’s figure was upwardly revised by 0.8 percent (from $701.7 billion to $707.2 billion).  A bit more than half of the 16 subsectors experienced spending increases in November.

“Today’s strong spending report contributed to a bright short-term outlook for the commercial and industrial construction sectors,” said ABC Chief Economist Anirban Basu. “Nonresidential construction spending is up approximately 5 percent on a year-over-year basis, and momentum should build further.

“With a new presidential administration coming to Washington there is a presumption that the economic dynamics of the near-term future will be markedly different than they have been,” said Basu. “If the last few weeks are any indication, the 2017 economy will be associated with tax cuts, more government spending, less financial regulation, faster economic growth, a stronger U.S. dollar, robust stock market performance and greater overall CEO confidence. That should translate into improved construction spending moving forward.

“It should be noted that data for November largely reflect the economic dynamics of the past,” said Basu. “Many construction firms have reported that they remain busy but have become concerned that work could dry up in certain markets in 2017 or 2018. This has been due to a combination of factors, including evidence of overbuilding in segments such as lodging and office buildings, even in Tier 1 markets like New York and Miami.

“Some are of course unnerved by prospects for shrinking exports given a stronger U.S. dollar, larger budget deficits and rising interest rates,” said Basu. “These are legitimate concerns and may ultimately serve to suppress U.S. economic dynamism. However, for now, the nonresidential construction outlook remains promising. The major source of uncertainty regarding the near-term outlook stems from whether the incoming administration will successfully pass an infrastructure package and how quickly such legislation would translate into stepped-up public construction spending.”

The Long Long Highway A Mill and Pave Project Rehabs a Section of an OK Road

Site-K Construction Zone Adds Nasdaq GlobeNews RSS Feed

Site-K Construction Zone Adds Nasdaq GlobeNews RSS Feed

ABC Predicts Modest Growth for 2017 Nonresidential Construction Sector; Warns of Vulnerability for Contractors

Associated Builders and Contractors (ABC) forecasts a slowdown of growth in the U.S. commercial and industrial construction industries in 2017. While contractors are vulnerable to rising commodity prices and potential interest rate increases in 2017, the middling consumer-led recovery should still lead to modest growth in construction spending and employment.

“The U.S. economy continues to expand amid a weak global economy and, despite risks to the construction industry, nonresidential spending should expand 3.5 percent in 2017,” said ABC Chief Economist Anirban Basu. “For more than two years, the Federal Reserve has been able to focus heavily on stimulating economic growth and moving the nation toward full employment. However, as commodity prices, including energy prices, firm up and labor costs march higher, the Federal Reserve will need to be more concerned about rising inflation expectations going forward. Associated increases in interest rates could have significantly negative impacts on certain asset prices, including stocks, bonds, commercial real estate and apartment buildings.

“Contractors also should be prepared for increases in commodity prices, which could translate into further stagnation in construction spending volumes if the purchasers of construction services are not prepared for related cost increases,” warned Basu. “Additionally, data from the U.S. Bureau of Labor Statistics indicate that construction job openings stand at a 10-year high and that average hourly earnings for construction workers rose above $28 per hour in 2016. The demand for construction workers is positioned to remain high and is likely to increase already significant wage pressures.

“However, there is a bullish scenario,” said Basu. “According to the Bureau of Economic Analysis, the average age of all fixed assets, including structures such as factories and hospitals, stands at 23 years—the oldest on record tracing back to 1925—and there is a collective awareness among American enterprises that they will need to replace much of their capital stock in future years. In addition, now rising energy prices could produce more investment and rising earnings—potentially translating into better support for asset prices, ongoing hiring and consumer spending.

“Despite some headwinds, many construction firms continue to report that they remain busy and ABC’s most recent Construction Confidence Index revealed that while construction firm leaders are not quite as confident as they were in prior quarters, most continue to expect growth in sales, margins and staffing levels,” concluded Basu.

Basu’s full forecast is available in the December issue of ABC’s Construction Executive magazine, along with the regional outlook for commercial and industrial construction by Dr. Bernard Markstein, president and chief economist of Markstein Advisors, who conducts state-level economic analysis for ABC.

Tom Ewing’s Environmental Update

* Git-‘r-done; well, someday, maybe. A Federal Highway Environmental Impact Statement notice caught my eye last week for an Interstate project in New Hampshire, for which FHWA plans a “Supplemental Draft Environmental Impact Statement (SDEIS).” That’ll light a spark! After all, project planning started in 1985, just 31 years ago. A “notice of intent” was published in 1998. A draft EIS in 2007. A public hearing was held in 2007. “Project development was subsequently delayed for several years,” reads the notice. The Governor reactivated the project in 2015. This new EIS should be done in September 2017. Whaddya think: construction starts October 1, 2017…?

* DOT holds a workshop next week on application of high-power batteries in maritime transportation. The workshop will be used to enhance Agency and industry stakeholders’ understanding of the state of technology, potential design requirements for electric powered and hybrid electric vessels, and areas for future research, development and demonstration projects. The agenda will cover alternative energy technologies for propulsion and auxiliary systems, with a view toward greater efficiency, lower costs and reduced air emissions.

* California’s largest utilities release plans next month to start heavy duty transportation electrification (TE). The Public Utilities Commission then needs to approve or disapprove the plans. Last summer the PUC released a 45 page guidance for the utilities. Here’s a bit of an understatement: “The electric utilities will need to think outside of the box on how they can provide electricity to fuel vehicles, integrate and maximize the use of renewable energy, and accelerate the adoption of TE in order to achieve the multiple objectives outlined by SB 350, namely: reduce dependence on petroleum, meet air quality standards, lower GHG emissions, and achieve the goals set forth in the Charge Ahead California Initiative in the Health and Safety Code.” Think anybody’s staying late at the office, maybe working Christmas day *😀?

Tom Ewing