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News|February 3, 2022

February 2022 – Construction Industry News

A look at the top news and happenings shaping the construction industry in California.

Civil Contractors Weigh in on Economy, Worker Shortage and Sustainability in Dodge Report

A recent report from Dodge Construction Network finds that civil contractors are optimistic about the construction economy in the civil sector in 2022 but are increasingly concerned about the shortage of skilled workers to help meet growth needs.

The Civil Quarterly, produced in partnership with Infotech, Hexagon, Command Alkon, and Digital Construction Workers, revealed that nearly three-quarters (73%) of civil contractors said they were highly confident about finding work in 2022. Approximately half expect their businesses to experience revenue and profit margin increases in 2022.

Counterbalancing that optimism, however, is a concern cited by 72% of the civil contractors who said they expect a high degree of difficulty in finding skilled workers. That represents a major increase over the 58% who reported that concern one year ago. An overwhelming 89% said they believe that the cost of workers will increase in the first half of 2022 — far more than the 66% who reported that expectation just one year ago.

Some of the other key takeaways from the survey:

  • 54% of civil contractors said that difficulty in finding workers is impacting their ability to meet project schedule requirements.
  • 53% report that the increased cost of those workers makes it difficult for them to meet their project budgets.
  • When it comes to worker recruitment and retention, most contractors surveyed said they believe that good benefits and a reputation for high pay are the best ways to recruit workers, with a greater emphasis on high pay to help recruit workers under 30 years of age.
  • The top three ways civil firms use to recruit workers are traditional advertisements, working with industry organizations (such as AGC), and working with local trade unions.
  • In addition to examining industry optimism and worker recruitment, the study looked at sustainability in the sector and found that green construction is still an emerging practice for civil contractors. Only 25% report that they have used a green standard or rating system on their civil projects in the last five years.
  • Civil engineers are more invested in sustainability than civil contractors according to the study, with over half (55%) of civil engineers saying they believe that demonstrating that they can build sustainably gives them a competitive advantage compared to 29% of civil contractors.

 

California Share of National Infrastructure Funding Will Help Address Deficit Bridges and Much More

California will receive nearly $850 million in initial funding and an estimated $4.2 billion over five years for bridge repair as part of the federal bipartisan infrastructure law passed by Congress in December. The law represents the single largest dedicated bridge investment since the construction of the interstate highway system, according to a release by the U.S. Department of Transportation.

Caltrans said the state in concert with local transportation agencies will deploy the funds to improve nearly 1,500 California bridges rated in “poor” condition.

California inspects every bridge in the state at least every two years, rating each as “good,” “fair,” or “poor” based on their condition and prioritizing their maintenance on this basis. This January, Governor Gavin Newsom unveiled his 2022-23 budget, The California Blueprint, which includes major investments in transportation and infrastructure. It proposes a nearly $15 billion investment spanning a wide array of transportation and infrastructure improvements that also includes rail and transit projects, airport infrastructure development, and more.

Caltrans noted that the federal bridge funding that was recently announced by U.S. DOT builds on progress already made with California SB 1, the Road Repair and Accountability Act of 2017, which provides approximately $5 billion in transportation funding annually, split between state and local agencies through 2027.

“With more than 26,000 bridges in California – including some of the busiest and most iconic in the nation – we thank the Biden-Harris Administration for this historic investment to make our bridges more resilient and create thousands of good-paying, middle-class jobs for California,” said Gov. Newsom in a statement released with the funding news.

 

California Transportation Commission Elects New Leaders

The California Transportation Commission recently elected Lee Ann Eager as its Chair and Carl Guardino as its Vice Chair, effective March 1, 2022.

Lee Ann Eager was first appointed to the Commission in June 2020 by Gov. Newsom. She is President and CEO of the Fresno County Economic Development Corporation (EDC), where she is responsible for guiding programs and initiatives to drive inclusive economic growth throughout Fresno County.

Eager plays a key strategic and leadership role within Fresno County’s local landscape, working with stakeholders within the private, public, philanthropic, and academic sectors, nationally and internationally. She has been a vocal proponent of high-speed rail for the past 10 years, working closely with the trades and workforce partners to align training and employment opportunities for Fresno’s residents. She serves as Co-Chair of Fresno Works, an initiative to galvanize investments around high-speed rail in Fresno County, and she is on the board of California State University Fresno’s Transportation Institute promoting innovation in transportation throughout the San Joaquin Valley.

“As Chair, my highest priorities are to continue the Commission’s work toward enhancing equity and climate considerations in transportation funding decisions; bringing our state’s transportation system up to a state of good repair, and ensuring all areas of the state have efficient mobility options for people and goods movement,” she said in a release by CTC. “I also look forward to maintaining our strong partnerships with transportation agencies, advocates, and community members.”

Carl Guardino was appointed by Gov. Arnold Schwarzenegger to a four-year term in 2007, reappointed twice by Gov. Jerry Brown, and in 2019, Governor Gavin Newsom appointed him to his fourth consecutive four-year term.

He serves as the Executive Vice President of Global Government Affairs and Policy for Bloom Energy. Prior to joining Bloom Energy, Guardino served for nearly 24 years as the President and CEO of the Silicon Valley Leadership Group, a public policy trade association that represents more than 350 of Silicon Valley’s most respected employers.

Guardino’s transportation leadership includes successful management of ballot Measures A & B in 1996 that funded 19 key road and rail improvements. In 2000, he co-managed a traffic relief initiative that will generate some $7.5 billion in local funds to bring Bay Area Rapid Transit (BART) to Santa Clara County. In 2008, he managed the successful Measure B (BART) campaign which authorized a 1/8-cent sales tax for 30 years to fund a 16-mile Santa Clara County BART extension. He led a 3-year effort that culminated in “Measure B” on the November 2016 ballot, which will generate an additional $6.5 billion in local funds for traffic relief improvements. In June of 2018, he co-led the Bay Area’s first 9-County transportation measure – Regional Measure 3 – which will generate $4.5 billion in its first 25 years.

The California Transportation Commission is an independent public agency responsible for programming and allocating state and federal transportation funds used in the construction of highway, intercity passenger rail, active transportation, transit, and aeronautic improvements throughout California. For more information, go to www.catc.ca.gov.

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