Rise in Construction Starts

Construction's tentative recovery appears to be gaining more confidence. The dollar value of total construction starts in 2012 increased 6% over 2011's level, according to McGraw-Hill Construction's Dodge. That follows a 1% annual increase in 2011.

Most of last year's increase came from a 29% jump in residential construction, which, at $163 billion, accounted for 35% of all new construction last year. The dollar value of non-building construction was up 2% last year, while the nonresidential building total declined 9%. The non-residential building market included annual declines of 14% for school construction and 6% for health-care work. Last year's starts also were dampened by a 33% drop in manufacturing work. These negatives were offset by gains in the commercial sector, including annual increases of 10% for stores, 14% for hotels and 15% for warehouses. By far, the biggest boost came from the residential sector, including a 30% increase in multifamily housing.

Unemployment Rates Ease

Unemployment in the construction industry averaged 13.9% in 2012, according to the U.S. Bureau of Labor Statistics' year-end data. It was down from a 16.4% average the previous year and a 20.6% average in 2010 but still well above 2008's rate of 10.6%. On average, 1.13 million construction workers were unemployed and actively looking for work in 2011. BLS reports that construction employment rose in 139 out of 335 metropolitan areas last year but declined in 131. "Private-sector demand is having a positive impact in a growing number of metro areas," says Ken Simonson, chief economist for the Associated General Contractors of America. "Unfortunately, construction employment in almost as many metro areas appears to be suffering from declining public-sector demand."

Congress OKs $50.5 Billion for Superstorm Sandy Rebuilding

Three months after Superstorm Sandy slammed into the mid-Atlantic coast, Congress has cleared a $50.5-billion package to help New Jersey, New York and other states rebuild. Final congressional action on the bill came on Jan. 28, when the Senate approved it 62-36. Construction-related funds include $10.9 billion for the Federal Transit Administration and $5.4 billion for the Army Corps of Engineers civil-works program.

The bill also allots $2 billion to the Federal Highway Administration for road and bridge repair and $600 million to the Environmental Protection Agency for wastewater-treatment and drinking-water facilities. Projects also could be financed through the bill's $11.5 billion to the Federal Emergency Management Agency's disaster relief fund and $16 billion for Housing and Urban Development Dept. community development grants.

Ray LaHood Will Leave DOT

Raymond H. "Ray" LaHood, who has led the U.S. Transportation Dept. since 2009, has announced he is leaving his post after a successor is confirmed. Speculation about LaHood's departure and rumors about possible successors have circulated for weeks. Among the names mentioned are Los Angeles Mayor Antonio Villaraigosa (D), National Transportation Safety Board Chairman Deborah Hersman, former Michigan Gov. Jennifer Granholm (D) and former Pennsylvania Gov. Edward Rendell (D).

DOE Mismanaged $700-Million Technology Program, Says IG

The U.S. Energy Dept. failed to properly manage a $700-million program to demonstrate the use of smart-grid technology, with millions of dollars in questionable spending, says the agency's inspector general. The funding, which Congress authorized DOE to distribute under the 2009 stimulus, was meant to advance innovative technologies, such as smart electricity meters, automated distribution systems and grid-scale energy-storage systems. In a Jan. 23 report, the IG said its review of 11 projects "identified weaknesses" in reimbursement requests, cost-share contributions and internal DOE coordination. The IG says two recipients received $9.9 million based on estimated costs and not actual costs and that another was reimbursed $2.4 million for energy-storage units that had not yet been manufactured.