As Venezuela’s government has undertaken the difficult task of recasting its budget to handle the new economic pressures — notably the precipitous fall in oil prices — construction interests are watching the developments with concern. In a nationally-televised announcement last Saturday, Venezuelan president Hugo Chavez unveiled a new initiative of austerity measures and tax hikes to meet the country’s growing budget shortfall. More than 90 percent of Venezuela’s export revenue comes from oil whose prices have plummeted more than 50% in the past nine months. Photo: Odebrecht The so-called “third bridge” over the Orinoco River in Venezuela being built by
With $5.9 billion in stimulus package money ready to go, the Dept. of Defense unveiled an expenditure plan that adds up to big opportunities for small contractors. The DOD plan, which was released to Congress on March 20, outlines nearly 3,000 projects that cover a broad mix of new construction, renovations and facility upgrades at sites in all 50 states, the District of Columbia, Guam and Puerto Rico. The plan includes $2.3 billion in work under the military construction program, with the vast majority dedicated to projects under $10 million. The plan focuses on family housing, troop housing and quality-of-life
McGraw-Hill Construction has revised its forecast for construction starts in 2009 based on the impact of federal stimulus. “Stimulus spending will shift public works from a negative to a plus,” says Robert Murray, chief economist. Highway and bridge work will be up 15% this year as opposed to a 5% to 10% decline. Environmental markets will show a 10% increase instead of a 5% decline. + Image SOURCE: MCGRAW-HILL CONSTRUCTION RESEARCH & ANALYTICS
Over the last six months, the deepening recession its accompanying credit crisis have dramatically changed the construction industry’s cost picture. Construction inflation has gone from the double-digit realm just last summer to between 2% and 6% this quarter. Ten of the 14 major industry cost indexes collected by ENR for this report posted declines during the first quarter, ranging from 0.5% to 8.4%. Slide Show Photo: Michael Moore Related Links: Renegotiations Make Bad Times Worse Labor Deals with Uncertainties Finding Cost Data on the Internet What Drives ENR’s Cost Indexes How To Use ENR’s Cost Indexes View Complete Report with
Even as Alabama transportation officials say federal stimulus money will not cover all the state’s necessary projects, the Birmingham region will soon lose access to $100 million in public transit funds because affected municipalities haven’t put together a plan after four years. The Federal Transit Administration money was set aside in a 2005 highway bill with the intent of lessening traffic in the Interstate 65 corridor between Birmingham and northern Shelby County. Disbursement was conditional on an approved plan and 20% local matching funds. Engineers are analyzing traffic-mitigation strategies, but intercommunity cooperation has not coalesced in time for a plan
People needing a new Volvo truck next year will have to pay an extra $9,600 on top of the regular price. Volvo Trucks North America says the surcharge is a result of extra costs associated with selective-catalytic reduction [SCR] in its 2010 diesel engines. SCR uses urea, a diesel exhaust fluid, to scrub nitrogen oxides from the tailpipe. New electronic controls monitor the process. U.S. Environmental Protection Agency rules dictate that by Jan. 1, all onroad diesels will have to meet near-zero NOx levels. Next year, Volvo will offer trucks with its own 11-, 13- and 16-liter engines as well
To Todd Harris, trouble at his local bank is a sign of thin times for his building contracting company, J.C. Harris & Sons, which is based in Elgin, Ill., not far from Chicago. Harris keeps an account at Amcore Bank, a mid-sized regional bank, and has even built its branch buildings. But like banks around the world, Amcore reported a loss for 2008: $97.5 million. William McManaman, Amcore’s CEO, told investors that in the last quarter of 2008, builders and developers accounted for the majority of the bank’s new bad loans. So for now, Amcore, like other banks, is about
At about the 30-day mark since President Obama signed the American Recovery and Reinvestment Act, federal agencies are releasing more of the $787-billion stimulus measure’s construction funding. The Dept. of Energy, Dept. of Transportation and U.S. Environmental Protection Agency on March 12 and 13 detailed plans to distribute more than $1 billion in stimulus aid. Photo: Amtrak Amtrak plans to replace Connecticut bridge (top). The Dept. of Energy said on March 12 that it plans to release to state and local agencies an initial installment of $777.8 million of its $7.8 billion in stimulus funds for home weatherization and aid
What a difference six months can make. During the third quarter of last year construction inflation was still reeling from the impact of record-high steel and oil prices set during the first half of 2008. By the first quarter of 2009, the inflation trend had completely reversed itself. Most major construction cost indexes tracked by ENR declined this quarter. Materials producers are frantically cutting production as prices hit rock bottom. Construction’s unemployment rate jumped into the double digits, and a severe credit crunch is pushing many subcontractors closer to the edge of bankruptcy. Related Links: Inflation Reverses Course As Recession
The three index tables on this page each represent various components of ENR’s two primary indexes. The Materials Price Index is the materials component for both of ENR’s cost indexes. The Common Labor Index is the labor component of ENR’s Construction Cost Index and the Skilled Labor Index is the labor component of ENR’s Building Cost Index. Related Links: Inflation Reverses Course As Recession Floors Prices Renegotiations Make Bad Times Worse Labor Deals with Uncertainties What Drives ENR’s Cost Indexes How To Use ENR’s Cost Indexes View Complete Report with Data and Analysis ENR only publishes cost index history tables