Weighing new Bureau of Economic Analysis (BEA) data, Associated Builders & Contractors reports that nonresidential fixed investment—a gross domestic product category embodying nonresidential construction activity—expanded at a seasonally adjusted rate of 5.2 percent in the second quarter, following a 7.2 percent jump in Q1. The expansion contributed more than 0.6 percentage point to GDP growth, due in large measure to increased construction equipment investment. The other two nonresidential fixed investment components—structures and intellectual property—also expanded, but at a slower pace.
“This was a good report from the perspective of nonresidential construction firms, particularly those engaged in private as opposed to public construction,” says ABC Chief Economist Anirban Basu. “The uptick in investment in construction equipment is particularly noteworthy because it signals a general belief that construction activity will continue to recover. Backlog among many nonresidential construction firms is already healthy. [The BEA data-backed] report suggests that backlog is not set to decline in any meaningful way anytime soon.”
“One might wonder why construction firms remain so busy in an economic environment still characterized by roughly 2 percent growth,” he adds. “There are many factors at work, including the ongoing boom of the e-commerce economy, which has continued to trigger demand for massive fulfillment and distribution centers even as stores close in massive numbers at America’s malls. The influx of global investment to a number of segments, including hotel and office construction, also helps explain disproportionate growth in certain private categories.”
“With global fixed-income yields remaining so low, investors from around the world are likely to continue to seek out opportunities for higher rates of return in commercial real estate, which thus far has had the impact of increasing property values and triggering construction,” Basu explains. “For the broader economy to accelerate, policymakers in Washington, will need to begin to make progress on corporate tax relief and infrastructure.”
EMPLOYER DEADLINE SET FOR USING NEW FORM I-9
The Department of Homeland Security’s U.S. Citizenship and Immigration Services office has revised Form I-9, Employment Eligibility Verification, to be used no later than September 18, 2017, and has directed to employers to continue following existing storage and retention rules for any previously completed Form 1-9. The revised form contains new nomenclature, an expanded List of Acceptable Documents for identification and birth records, plus user-friendly, drop-down menu options for employers completing the form online. E-Verify users will be able to select one of those options, linking to Form FS-240, when creating a case for an employee who has presented the document for Form I-9. The agency details the changes in a revised Handbook for Employers: Guidance for Completing Form I-9 (M-274), posted at www.uscis.gov.