10 minute read
Market Watch
TORO FOUNDATION SUPPORTS CONSTRUCTION WORKFORCE DEVELOPMENT WITH DONATION
Crew Collaborative, a nonprofit organization aimed at strengthening the construction workforce, has received a $15,000 grant from The Toro Company Foundation to support its efforts. The donation will exclusively sponsor Crew Collaborative’s Classroom Talks.
“The Toro Company is committed to building the construction workforce and recognizes that successful construction careers start in the classroom,” says Judson McNeil, president of The Toro Company Foundation. “We’re proud to assist students as they begin their career planning by helping them understand all of the opportunities available in this critical field, including roles at TTC.”
The Classroom Talks sponsored by TTC and facilitated through Crew Collaborative will take place routinely throughout the school year starting in fall 2021. Students will hear from industry representatives on the various career paths offered in construction, including those that require college degrees and those that can be started following high school graduation.
Ninety percent of U.S. contractors have expressed concerns about the labor shortage, and 52% of construction workers were born before 1980, according to recent surveys. Crew Collaborative works to establish the construction community around the world to change the stigma surrounding careers in construction through education, conservation, events and advocacy. The Classroom Talks play a critical role in helping young people understand the many avenues available for a successful career in construction.
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Crew Collaborative
Commercial and multifamily construction starts regained lost ground in 2021 in most major metropolitan areas following the pandemic in 2020. According to Dodge Construction Network, the value of commercial and multifamily construction starts in the top 20 U.S. metro areas increased 18% from 2020 to 2021, compared to 16% on a national basis.
In 2021, total U.S. commercial and multifamily building starts rose 16% to $236.6 billion from 2020 levels. Commercial starts were up 8% to $120.3 billion nationally, while multifamily starts were 25% higher at $116.4 billion.
Out of the top 20 metro areas, the top 10 saw overall commercial and multifamily starts rise 18%, with only Washington, D.C., and Los Angeles posting declines. Commercial building starts were up 11% to $45.1 billion in 2021, while multifamily starts gained 25% to $48.0 billion.
The top 10 accounted for 39% of all commercial and multifamily starts in the U.S., unchanged from 2020.
The top three metro areas in 2021 were:
New York with commercial and multifamily starts at $26.8 billion, a 14% increase from 2020; Dallas with $10.7 billion in starts, an impressive 45% gain over 2020 and Miami, with $8.4 billion in starts and a 65% increase from the prior year.
The remaining top 10 metro areas:
• Washington, D.C., -9% ($8.4 billion) • Boston, +16% ($7.3 billion) • Los Angeles, -12% ($7.1 billion) • Atlanta, +49% ($6.6 billion) • Seattle, Wash., +48% ($6.2 billion) • Phoenix, +11% ($6.0 billion) • Houston, +5% ($5.5 billion).
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ECONOMY SETS RECORD AGAIN IN 2021
Economic activity in the services sector grew in November for the 18th month in a row — with the Services PMI setting a record for the fifth time in 2021 — say the nation’s purchasing and supply executives in the latest Services ISM Report on Business.
The report was issued Dec. 3 by Anthony Nieves, chair of the Institute for Supply Management(ISM) Services Business Survey Committee. The ISM Services PMI index is a set of economic indicators based off surveys of private-sector companies in the services sector, which includes construction.
In November, the Services PMI registered 69.1%, the highest reading since the inception of the index in 2008. The 12-month average is 62.1%, which reflects strong and sustained demand in the services sector, according to the report.
The November reading indicates the services sector grew for the 18th consecutive month after two months of contraction and 122 months of growth before that. A reading above 50% indicates the services sector economy is generally expanding; below 50% indicates the services sector is generally contracting.
“In November, the Services PMI registered another alltime high of 69.1%, 2.4 percentage points above October’s reading of 66.7 %, the former all-time high,” Nieves says. “Previous records were set in March (63.7%), May (64%) and July (64.1%). The data quickly explains the elevated Services PMI reading, as two of the four equally weighted subindexes that directly factor into the composite index set or tied alltime highs.
The Business Activity Index reached 74.6%, an increase of 4.8 percentage points compared to the reading of 69.8% in October, and the New Orders Index registered 69.7%, the same reading as last month’s figure. The other two subindexes are Employment and Supplier Deliveries; both also contributed positively to the Services PMI in November.
“Construction material shortages and longer lead times continue to hamper operations. Significant cost increases from labor and freight are forecast for the start of next year,” a survey respondent in the construction sector reports.”
ISM
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U.S. Environmental Protection Agency
EPA PROPOSES COMPREHENSIVE BIOFUELS PROGRAM UPDATES AND IMPROVEMENTS
To strengthen the role of the Renewable Fuel Standard (RFS) in advancing greater use of low-carbon renewable fuels, the Environmental Protection Agency (EPA) proposed a package of actions setting biofuels volumes for years 2022, 2021 and 2020, and introducing regulatory changes intended to enhance the program’s objectives. In addition, EPA is seeking public comment on a proposed decision to deny petitions to exempt small refineries from their obligations under the RFS on the grounds that petitioners failed to show that EPA has a basis under the Clean Air Act (CAA) and recent federal case law to approve them.
“Despite multiple challenging dynamics affecting the RFS program in recent years, EPA remains committed to the growth of biofuels in America as a critical strategy to secure a clean, zero-carbon energy future,” says EPA Administrator Michael S. Regan. “This package of actions will enable us to get the RFS program back in growth mode by setting ambitious levels for 2022.”
The Clean Air Act requires EPA to set annual RFS volumes of biofuels that must be used for transportation fuel for four categories of biofuels: total, advanced, cellulosic and biomass-based diesel. EPA implements the RFS program in consultation with the U.S. Department of Agriculture, the U.S. Department of Energy and consistent with direction from Congress.
For 2022, EPA is proposing the highest total volumes in history, putting the program on a stable trajectory that provides for significant growth. The proposed volumes for 2022 are more than 3.5 billion gallons higher than the volume of renewable fuel used in 2020. The proposed volume of advanced biofuel for 2022 is over one billion gallons greater than the volume used in 2020.
2022 ECONOMIC OUTLOOK FORECASTS 4.6% EXPANSION IN EQUIPMENT INVESTMENT
Low financial stress, an expanding housing sector, and increased federal spending on infrastructure are expected to propel equipment and software investment growth of 4.6% for
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2022. Annual U.S. GDP growth for 2022 is forecast at 3.5%, according to the 2022 Equipment Leasing & Finance U.S. Economic Outlook released by the Equipment Leasing & Finance Foundation.
The Foundation’s report, which is focused on the nearly $1 trillion equipment leasing and finance industry, highlights key trends in equipment investment and places them in the context of the broader U.S. economic climate, providing the U.S. macroeconomic outlook, credit market conditions and key economic indicators.
While equipment and software investment is forecast to grow 4.6% (annualized) in 2022, supply chain constraints, high inflation and tighter monetary policy are key headwinds to growth. The U.S. economy slowed in fall 2021, however, growth in Q4 likely rebounded, and the economy appears poised for an aboveaverage year in 2022.
The U.S. manufacturing sector should continue to expand at a healthy rate in 2022, although supply chain issues, hiring difficulties and high inflation could dampen industrial sector output, particularly during the first half of the year.
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The Dodge Momentum Index fell 3% in December to 166.4 (2000=100), down from the revised November reading of 170.7. The Momentum Index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. In December, commercial planning fell 4%, and institutional planning slipped 1%. Despite these declines, 2021 was a banner year for the Momentum Index, despite lingering risks of COVID-19 and low demand for some types of nonresidential buildings.
The leading commercial projects were the $300 million OKANA Resort in Oklahoma City, and a $200 million Amazon distribution center in Daytona Beach, Fla. The leading institutional project was the $250 million University of Michigan Detroit Center for Innovation in Detroit, Mich.
The Dodge Momentum Index suggests construction activity will improve in 2022 and that this growth will be more balanced than what was seen in 2021. The ever-present risks of the pandemic and tight labor force will work to counter these trends, leading to moderate growth over the new year.
Dodge Construction Network
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JOHN DEERE TO ACQUIRE MAJORITY OWNERSHIP IN E-MOBILITY BATTERY TECHNOLOGY SUPPLIER
Deere & Company has signed a definitive agreement to acquire majority ownership in Kreisel Electric, Inc. (“Kreisel”), a battery technology provider based in Rainbach im Mühlkreis, Austria. Kreisel develops high-density, highdurability electric battery modules and packs. Additionally, Kreisel has developed a charging infrastructure platform (CHIMERO) that uses this patented battery technology.
Since 2014, Kreisel has been focused on the development of immersion-cooled electric battery modules and packs for high-performance and off-highway applications. The company has a differentiated battery technology and battery-buffered charging infrastructure offering and serves a global customer base across multiple end markets, including commercial vehicles, off-highway vehicles, marine, e-motorsports and other high-performance applications.
John Deere sees demand growing for batteries as a sole- or hybrid-propulsion system for off-highway vehicles. Products in Deere’s portfolio such as turf equipment, compact utility tractors, small tractors, compact construction and some road building equipment could rely solely on batteries as a primary power source. Deere intends to continue to invest in and develop technologies to innovate, deliver value to customers and work towards a future with zero emissions propulsion systems.
The majority investment in Kreisel Electric will allow Deere to optimally integrate vehicle and powertrain designs around high-density battery packs while leveraging Kreisel’s charging technology to build out infrastructure required for customer adoption.
Kreisel Electric will retain its employees, brand name and trademark and continue to operate from its location in Austria to serve its growing customer base. The company was founded by brothers Johann, Markus and Philipp Kreisel and has approximately 160 full-time employees.
The transaction requires final regulatory approval in Austria, with closing expected to take place in approximately 60 days. Financial details are not being disclosed.
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CANCELLED: AMERICAN RENTAL ASSOCIATION’S RENTAL INNOVATION CONFERENCE & EXHIBITS
The American Rental Association (ARA) has decided to cancel its Rental Innovation Conference & Exhibits event scheduled for March 9 and 10, 2022 in Grapevine, Texas.
The decision was made due to a variety of factors. These include the continued spread of the Omicron variant of the coronavirus (COVID19), and both transmission and positivity rates in Dallas Country being categorized as “high.”
Other factors in the decision were the return of essential-travelonly restrictions for many large organizations, equipment availability issues, as well as parts and staff shortages.
The ARA is evaluating options to deliver the education program portion of the conference at a future event. Those who had already registered for the Rental Innovation Conference & Exhibits will receive a full refund
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