Reports of solid profits and prospects by some of the construction industry’s largest publicly traded power, environmental and infrastructure giants had to be music to Wall Street’s ears. The good news was delivered at Credit Suisse’s engineering and construction conference, held on June 4 in New York City. Fluor Corp. has a strong balance sheet and $2.3 billion in cash, Vice President Kenneth Lockwood told analysts and investors. “We think we’re doing well in a challenging environment,” he said. The firm reported $5.5 billion in first-quarter project awards, a $29.1-billion backlog and very little debt. Lockwood is optimistic about winning
Nevada’s 2009 biannual Legislature adjourned this month without addressing a looming $7-billion transportation funding shortfall over the next decade. Highway construction spending may be slashed, despite a 103% increase in traffic between 1990 and 2005. Legislators were reluctant to increase fuel taxes, and Gov. Jim Gibbons (R) threatened to veto an increase. Transportation officials recommended adjusting the vehicle registration depreciation schedule to redirect funds for highways, a move that would generate about $47 million per year. Instead, lawmakers used the idea to fill the state’s general fund. The Nevada Dept. of Transportation expects its 2010-11 capital improvement program to be
Even as the Obama administration looks to pump more stimulus money into the marketplace, contractors are pointing to challenges of turning existing funds into new or saved jobs. Firms report some stimulus progress in stabilizing their workforce, but nonresidential construction job losses won’t end in 2009. While construction job losses slowed last month to 59,000, industry unemployment is now at 19.2%, compared to 9.4% overall in the U.S., says Ken Simonson, Associated General Contractors’ chief economist. “Homebuilding has hit bottom, but nonresidential still has a ways to fall,” he adds. Simonson points to “ominous signs,” such as architect-engineer employment, down
Through the first four months of 2009 the total value of construction starts reached $117 billion, which was 39% less than the first four months of last year, according to McGraw-Hill Construction. “The pattern of construction starts over the past two months suggests a transition from extended declines to more of an up-and-down pattern, which generally takes place when a bottom gets established,” says Robert Murray, MHC’s chief economist. “This process of establishing a bottom is still in its early stages.” The public-works market is expected to see more strength as the impact of the stimulus bill begins to emerge.
Contractors are feeling the impact of the changing economy, but many are failing to prepare for what may not be just a normal recession, according to industry management consultant FMI Corp. in a new report. In its survey conducted in February of 230 executives of U.S. construction firms in various revenue categories and market segments, Raleigh, N.C.-based FMI says respondents anticipate much uncertainty ahead. Three-quarters of respondents foresee workforce cuts, and 77% expect profits to drop. While 74% of firms have boosted business development in the last six months, only 56% are formally evaluating their capabilities and constraints and only
Federal agencies are not relying enough on each other’s contractor past-performance data in making new awards, due to the unreliability of the information or difficulty assessing its relevance, says a new study by the U.S. Government Accountability Office. The report, requested by Henry Waxman (D-Calif.), chairman of the House Energy and Commerce Committee, says even with the creation in 2002 of a governmentwide retrieval system for such data, its use is not widespread. It reviewed 62 fiscal 2007 and 2008 solicitations in the Depts. of Energy, Defense and Homeland Security, among oth- ers, and interviewed 121 contracting officials.
The pace of contracting for American Recovery and Reinvestment Act funds is picking up in the highway and transit sectors. A new House Transportation and Infrastructure Committee report on the economic-stimulus legislation shows as of April 30, 2,901 highway and transit projects, valued at almost $10 billion, have been put out for bid in 50 states, territories and the District of Columbia. It adds that 1,099 of those projects, totaling $3.5 billion, are under contract. The committee report, released on May 21, says work has started on 545 projects, totaling $2.1 billion. The new figures show gains from March 31
In the American Recovery and Reinvestment Act’s first 77 days on the books, only $28.5 billion of the law’s $787.2-billion total has turned into actual outlays. Few of those hard dollars have flowed into construction programs. ARRA outlays by the Dept. of Transportation, Environmental Protection Agency and General Services Administration for buildings totaled only $42.5 million as of May 12. Sources: Congressional Budget Office, Office of The Vice President, Quarterly Report On ARRA The Obama administration’s first quarterly report on the economic stimulus, released on May 13, says obligations—binding spending agreements—totaled more than $88 billion as of May 5, which
People age 55 and over, who as a group have taken the hardest hit to their net worth in the slumping economy, are waiting out the recession. When they return as homebuyers, they will not be looking for the same kind of house they would have been a year ago, say housing experts. The value of baby boomers’ homes currently is equivalent to 2003 prices. That has softened the formerly solid baby-boomer and senior market and has homebuilders scrambling to figure out what boomers and seniors will want and how to deliver it. That market’s numbers are significant: More than
The Dept. of Housing and Urban Development has announced plans for $995 million in American Recovery and Reinvestment Act discretionary grants to upgrade public housing units and the National Science Foundation is seeking applicants for $200 million in ARRA aid to rehabilitate academic research facilities at colleges and universities. Related Links: HUD's Notice of Funding Availability HUD on May 11 said it will award a total $995 billion in ARRA Public Housing Capital Funds in four categories: $600 million for energy-efficiency improvements; $200 million for projects delayed for lack of funding; $100 millin to "transform" old public housing projects through
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