While 2021 construction projects appear to be almost where they were in the first half of last year, residential work is enjoying a booming nearly 20% increase over the same period in 2020.
So says a new report just issued by Dodge Data & Analytics, showing that the residential sector has particularly been fueled by large multi-family housing projects in the nation’s largest urban areas. In contrast, the study, 2Q Cost Report Economics, shows that non-residential starts for the first five months of this year were actually down by 5% over early 2020, with decreases particularly recorded in the hotel, office, and retail sectors. One non-residential bright spot: public construction, particularly in environmental and utility-scale projects, which is up by 8%. A separate study published by the same company, the Dodge Momentum Index, shows an overall decline of 5% last month in nonresidential building projects currently in the planning stage. According to a Dodge press release the decline in June was the result of “losses in both institutional planning, which fell 7%, and commercial planning, which lost 4%.” A wavering demand for retail and hotel projects, coupled with continued labor shortages, have only added to the challenges faced by the industry. Even so, the Index is not only well above where it was exactly a year ago, it is actually nearing a 13-year high. By Garry Boulard
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![]() One of the tallest and most iconic buildings in downtown Phoenix may soon be in line for a major upgrading. Members of the Phoenix City Council have voted in favor of purchasing for $46.5 million the Wells Fargo Plaza building at 100 West Washington Street. The 27-floor structure is expected to be used for 911 operators and dispatchers, and may also eventually provide a new headquarters for the Phoenix Police Department. As planned, the building will also house a number of other city departments that are currently located in various locations in the downtown area. In repurposing the structure, which was completed in the fall of 1971, the council also approved spending $90 million to upgrade it, carving out new high-tech space for police operations. Phoenix officials say the project, which has been talked about for several years, will save money for the city, noting previous estimates of up to $350 million to build a new facility. Currently city dispatchers and operators work out of two separate facilities, one of which has space and structural issues. With a floor area in excess of 419,000 square feet, the Wells Fargo building, designed in the Brutalist style, is the 11th tallest building in Phoenix. The structure, lauded at the time of its completion as the tallest building in Arizona, was originally opened as the First National Bank Plaza. More specific plans for the Wells Fargo building’s repurposing are expected to be announced after the purchase agreement is finalized this fall. By Garry Boulard Three aging rural water systems in Arizona will soon be seeing long-awaited upgrades thanks to a new federal grant.
The U.S. Department of Agriculture has announced that it is committing some $7.2 million to help three communities build a modern new water treatment center, as well as a new storage tank and complete redevelopment of a distribution system. The funding is more specifically coming out of the USDA’s Water and Waste Disposal Loan and Grant Program, which is designed to help towns and rural areas with populations of less than 10,000 upgrade their drinking water, sanitary waste disposal, and storm water drainage systems. The funding also applies to tribal land rural areas as well as colonias. In the latest round of announced funding through the program, the southwestern Arizona town of Tacna, which has a population of around 600 people, is receiving $4.8 million to build a new water treatment and distribution system. Other localities with populations in the hundreds and also based in Yavapai County are being targeted for funds: the White House Ranch community is set to receive $1.6 million for the installation of a new ion exchange nitrate removal system, as well as a storage tank. At the same time the village of Pinehurst is getting $500,000 to build a new water distribution system. By Garry Boulard ![]() Regional government officials are hoping that the massive infrastructure bill now nearing a vote in Congress will allow for greater flexibility in prioritizing area transportation projects. So says a new report just issued by the Brookings Institute, which, based on interviews with regional leaders across the country, notes that previous federal infrastructure initiatives have often been too restrictive in what projects are ultimately selected for funding. Noting that most regional leaders “already coordinate with each other on infrastructure and economic development planning,” the Brookings report suggests that Congress and interested federal agencies should “work together to help communities bundle federal funding to grow these efforts.” The survey also indicates that nearly half of the regional leaders questioned said “outdated funding priorities” have frustrated their previous infrastructure efforts, with 35% complaining that funding pathways “rarely reach regions and localities.” Just under 30% of the respondents pointed to climate resilience and environment justice as their primary infrastructure funding priority, followed by 24% who picked the expansion of broadband. While not denying the huge impact that federal funding has had on regional infrastructure projects, the Brookings report nevertheless adds that Washington should begin a series of talks with regional leaders in order to explore “how new rules can support long-range regional goals and allow metropolitan leaders to coordinate multiple federal funding flows.” President Biden and a group of bipartisan lawmakers have tentatively agreed to push for a $1.2 trillion infrastructure bill, with the Senate expected to vote on the legislation early next month. By Garry Boulard ![]() Studies are underway for the construction of a 5,000 square-foot building that would go up in downtown Grand Junction and serve as a transit hub for city residents. As proposed, the building would be built between Ute Avenue and First Street and would house waiting and ticketing areas, as well as bathrooms. While still very much in the talking and studying stage with invested parties including the City of Grand Junction and the Colorado Department of Transportation, the transit hub is being seen as an answer to a number of pressing transportation issues in the area, including the need for a modern bus stop. As discussed, the hub may additionally include a covered plaza as well as a parking lot that could include electric vehicle charging stations. Funding for the project could come from a variety of sources, including a Rebuilding American Infrastructure with Sustainability and Equity grant. Earlier this spring the Department of Transportation announced that it has available some $1 billion in funding for those grants to support innovative road, rail, transit, and port projects. It is thought that it could cost around $37 million to build the Grand Junction transit hub, with land for the project to be donated by the city. For now, city officials are waiting to see how much funding can be secured at the federal level before beginning the actual planning stage. By Garry Boulard ![]() Planning is still underway for the construction of a 71-acre water park in on the northwest side of Maricopa, Arizona. The project, PHX Surf Park, is expected to include two large wave pools, water slides, a bike track, lazy river, and both restaurants and stores. It is expected that the park, to go up on currently vacant desert land near the intersection of Smith Enke Road and Loma Road, will be built in multiple phases. According to pre-application papers submitted by the developer, PHX Surf LLC of Maricopa, the project is described as one that will offer “advanced active entertainment, progressive surfing experiences, water play, related retail and dining, concert and open space, and hospitality.” More specifically, the project could also see the construction of a hotel, sand volleyball courts, a bike pump trail, and a tiny house village anchored by its own clubhouse. Members of the Maricopa City Council have now voted in favor of allowing for the purchase of three parcels of land at the site in order to build the project. In a statement, Maricopa Mayor Christian Price said the project represents the city’s “first dabble into the tourism industry. We don’t have a Grand Canyon; we don’t have a snow-capped mountain that people come to, so we have to get creative.” In so doing, the council also established a timetable of roughly four months for both the developer and the City of Maricopa to do their respective due diligence for the project. If either the city or PHX Surf should decide within that four-month period to not move ahead with the project, they can opt out of the land purchase contracts. By Garry Boulard Construction wages are slated to see an overall increase of 3.2% by the end of the year, according to a new survey.
The company PAS Incorporated, which is based in Saline, Michigan and tracks wage, salary, and benefit trends, arrived at that figure after conducting interviews with more than 290 construction companies. In the company’s just released Construction/Construction Management Staff Salary Survey, it is noted that in the past year all industries, despite the pandemic, saw staff salaries increase by 2.9%. That figure is expected to increase this year by another 2.9%. Other sources are forecasting construction industry wage increases this year of anywhere from 3% to 3.4%. The PAS survey comes as various reports are indicating that construction companies across the country are in dire need of more workers. Many of those companies, notes the publication Business Insider, are “struggling to keep pace with the surging demand for homes and home improvements during the pandemic.” In order to secure more workers, continues the publication, many companies have “started offering higher wages and improved benefits.” According to the site Payscale.com, project managers currently earn on average around $78,000; followed by construction superintendents at $77,000; project engineers at $65,000; and assistant project managers at $63,000. By Garry Boulard ![]() As a means to both start and complete a series of construction and infrastructure projects, the City of El Paso is contemplating the use of certificates of obligation to fund those efforts. Members of the El Paso City Council are currently reviewing the possibility of issuing up to $96 million in such certificates. The certificates are part of a significantly larger $1 billion budget for fiscal year 2022. Certificates of obligation have proven to be particularly popular with cities and counties in Texas because, unlike general obligation bonds, the certificates don’t require voter approval. While the El Paso council, on a 6 to 2 vote, has opted to go the certificates route, it has also scheduled a public hearing for August 24, allowing for input on what infrastructure projects should be prioritized. The certificates are expected to be generally used for street construction and upgrades, as well as park improvements, and the building of the proposed Mexican American Cultural Center, among other projects. According to research issued by the Texas Public Policy Foundation, certificates of obligation were originally primarily used only for emergency spending, but in recent years increasingly targeted park, swimming pool, and public art projects at the city and county level. By Garry Boulard ![]() In a city that has often been plagued with flooding, plans are underway for the construction of a new drainage pipe system. The City of Greeley says it wants to replace its current drainage system, parts of which were built in the 1920s. As planned, construction of the new system will stretch roughly one mile from the banks of the Poudre River to downtown Greeley and could take up to 5 years to fully complete. It is thought that it will cost at least $40 million to build the new system, with $15 million expected to be spent during the first year of the project. Due to the limitations of its current drainage system, the downtown Greeley area especially has been subject to flooding. Earlier this month a particularly heavy rainstorm dropped between 1.4 and 4 inches of rain in less than an hour, flooding area businesses and homes. According to city sources, that downfall was the equivalent of 100 million gallons of water. The Greeley City Council is expected to vote shortly on a proposal to build a new $40 million system. Earlier this spring, the city embarked on what it calls the East 8th Street Improvement Project, designed to expand a busy thoroughfare, and in the process improve area drainage and utility systems. By Garry Boulard Although the national construction industry has added more than 875,000 new jobs since the worst days of the pandemic a year ago, it still saw a loss of 7,000 jobs last month.
According to a new report issued by the Associated Builders and Contractors, the real drag on construction jobs is coming out of the nonresidential sector which saw a decline of 22,600 positions in June. Nonresidential specialty trade contractors comprised the majority of that loss, accounting for a decline of 14,800 jobs, followed by the heavy and civil engineering sector, which was off by 10,900 jobs. In a statement, Anirban Basu, chief economist with the ABC, said, “Contractors and other economic stakeholders should be concerned by ongoing labor market dysfunctions, including an inordinate level of difficulty finding workers, elevated numbers of people quitting their jobs, and rising wages.” Comparing where the industry is today to the beginning of the pandemic a year ago, the latest Bureau of Labor Statistics numbers show nonresidential building employment up by 45,000; heavy and civil engineering with an increase of 18,900; and residential building up by 193,700. The most recent leveling off of wage growth, continued Basu, may be attributable to “disproportionate numbers of entry-level workers” returning to work now that enhanced unemployment benefits in some states have expired. “The entry of these workers in large numbers would tend to suppress average wage measures,” Banu continued, adding, “Most contractors are likely continuing to experience substantial upward wage pressure.” By Garry Boulard |
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