Construction Industry Trends: December 2023 Roundup
As we rolled into the winter of 2023-2024, December was a relatively slow month for construction news. However, a few stories surfaced that the construction world should know about. The Biden administration mandated PLAs, manufacturing construction reached an all-time high, a $5 EV project found its general contractor, and Oklahoma City is looking at a proposal for a massive residential skyscraper—the tallest of its kind in the US.
Biden Administration Mandates PLAs
Things are changing for large federal construction projects. As of December 18, 2023, the Biden Administration implemented an executive order mandating Project Labor Agreements on federal projects of $35 million or more. Most experts agree that this likely encompasses the majority of large federal projects.
The executive order, which goes into effect 30 days after publishing in the Federal Register, replaces a rule put in place by the Obama administration. Under Obama, PLAs were encouraged, but not mandated.
This decision is met with mixed results. The goal of the mandate is to encourage contractors, unions, subs, and other labor groups to negotiate each project ahead of time. As a side effect, many workers will see increased wages. However, those against the executive order argue that these new rules will decrease competition and make projects more expensive.
Manufacturing Spending Continues to Rise
Reports continue to show that manufacturing construction spending is still rising. Reports released in December 2023 show that spending reached $209.78 billion in November, up from $208.76 billion in October 2023, and marking the third consecutive month of growth. Over the past four years, the industry has benefitted from a 260% increase in spending. The real boom began in late 2021, which marked the start of multi-decade highs from June 2015’s prior recent high of $88.7 billion.
Much of the spending comes as a result of the Biden administration’s CHIPs Act and Infrastructure Investment and Jobs Act. The CHIPs Act’s specific focus is on semiconductor production and technology, and increasing the domestic production of microchips.
Some examples of the largest manufacturing projects to break ground in 2023 are:
- VinFast Chatham County Electric Vehicle Plant: Raleigh, North Carolina
- ENTEK Terre Haute Battery Separator Manufacturing Plant: Terre Haute, Indiana
- First Solar Iberia Parish Solar PV Manufacturing Facility: Iberia Parish, Louisiana
Also, projects from companies like Micron ($100 billion, Clay, NY), TSMC ($40 billion, Phoenix AZ), Texas Instruments ($30 billion, Sherman, TX), Samsung ($25 billion, Taylor, TX), and Intel ($20 billion, New Albany, OH and $20 billion, Chandler AZ) are already underway throughout the country.
$5B EV Plant Project Finds Its General Contractor
American electrical vehicle manufacturer Rivian awarded its Stanton Spring, Georgia project to a general contractor. Chicago-based construction firm Clayco announced the news on its company website on December 19, 2023.
According to the press release, the EV manufacturing facility will encompass 1,800 acres dedicated to sustainable transportation while also preserving the natural environment. Rivian believes that Clayco’s dedication to innovation will help the brand achieve its goal, making the partnership a great fit.
The plant’s impact on the electric vehicle market is expected to be a big one. The plant will create around 7,500 jobs, and Rivian plans to build up to 400,000 cutting-edge electric vehicles out of the plant each year after the project’s completion. Vehicle production is expected to start in 2026.
Georgia isn’t a stranger to EV manufacturing. Gov. Brian Kemp believes this new facility is a sign of the growth and impact the state can make on the EV industry, with other manufacturing plants from LG Energy Solution and Hyundai Motor Group in Savannah and Sewon America in Rincon already in operation.
134-Floor Residential Skyscraper Proposed in OKC
The Boardwalk at Bricktown development, a $736 million project proposed in August, just took a wild upward turn. In addition to the current proposal, which includes a new arena for the Oklahoma City Thunder basketball team, a 480-key Hyatt Dream hotel, and two 23-floor apartment buildings, Matteson Capital and Thinkbox (the developers on the project) proposed a 134-floor, 1,750-feet-tall residential skyscraper project.
If built, the skyscraper project will be the second tallest building in the U.S., second only to One World Trade Center (1,776 feet). It will also unseat Central Park Tower as the tallest residential building in the US (1,550 feet). If the project is built to spec, it will double OKC’s current tallest building, the Devon Tower (884 feet). The building will house over 1,528 rental units including 48 units of affordable housing. Two floors of retail space are also part of the proposal.
Nothing has been decided, but Kenton Tsoodle, the President and CEO of the Alliance for Economic Development of Oklahoma City, states that the skyscraper portion of the project will only happen if the market is there. That’s a potentially tall order for a city of 687,000 people.
https://www.viewpoint.com/blog/construction-industry-trends-december-2023-roundup