US and CA Construction Employment Cumulative change, Feb 2020-Oct 2023, seasonally adjusted


% change


      


Feb. 2020- Oct. 2023:


   


Oct. 2022- Oct. 2023:


 


 Source: BLS




















 








 ©2023 The Associated General Contractors of America, Inc.


Two major pieces of federal legislation enacted in the past two years should finally help nonresidential construction in 2024: the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022.


as a destination for both foreigners and domestic transplants. Despite a shrinking population overall,


there is still an acute shortage of housing. But the state’s sky-high land acquisition, development, and construction costs, along with tightened lending standards, have meant that fewer single- or multi- family projects promise a high enough return to attract developers.


Multifamily Construction Market Strong In the face of such challenges, it is sur- prising that the number of multifamily building permits issued in the first nine months of 2023 held level with the num- ber issued during same span in 2022. That implies a much stronger market for multifamily construction in 2024 in California than nationally, where permits plunged 16%. Two major pieces of federal legislation


enacted in the past two years should finally help nonresidential construction in 2024. Te Infrastructure Investment and Jobs Act of 2021 promised funding


for many types of infrastructure projects. However, project awards and starts have been held back by undefined, unclear, or unworkable requirements involving U.S.-made materials, apprenticeship programs, and prevailing wages. Te Inflation Reduction Act of 2022 offers generous tax credits but requires the Internal Revenue Service to spell out very specific eligibility standards that neither the agency nor taxpayers have experience with. Some of the roadblocks to implementing these laws have been cleared away in the past few months, giving hope that more projects will break ground in 2024.


Te outlook for construction in Cali-


fornia varies across the state and across markets. On the whole, prospects are positive but not as strong as nationally.


Ken Simonson


CALIFORNIA CONSTRUCTOR JANUARY/FEBRUARY 2024


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