Latest California Construction Industry News

Latest California Construction Industry News

Here are a few of the latest news stories in the industry as it relates to California:

Interior Department Supports Improved California Water Delivery

The U.S. Department of the Interior verified that it plans to continue to work with the California state government on the massive “California WaterFix” project. The statement is a reversal of the Trump Administration’s recent comments that it did not support the massive project. WaterFix includes Building large tunnels under the Sacramento-San Joaquin delta along with a diversion point on the Sacramento River to improve the state’s water delivery capability. The Interior Department stated on October 25 that it “shares the goals of the state of California to deliver water with more certainty, eliminating the risks to the California water supply, and improving the environment” but that it “does not expect to participate in the construction or funding of the CA WaterFix.”

Puente Energy Project Deal Falls Through

The deal that was bringing a new natural-gas peaking plant to Ventura County, in the works since 2012, began to fall apart this October after local officials, with the support of environmental groups, determined that the plant was unnecessary and it did not meet state-wide clean energy objectives. NRG Energy was to build and operate the plant and they had navigated through most of the permitting and regulatory requirements needed for the project to move forward.

Border Wall Segments Prototypes in San Diego

The Trump Administration’s border wall is closer to reality with prototyping activities in San Diego. Once completed, the government will review the prototypes on a variety of criteria, including the ability to withstand blows from sledgehammers, pick-axes, and other hand tools. Each prototype has a value of up to $500,000.

Construction Industry Trends

The construction industry continues to thrive despite a labor shortage resulting in part from the Great Recession. Experts now expect to see improved growth over the new few years. Yet, many companies are anxious to see how the new president and his policies will affect the industry.


Improved Growth

Experts predict spending on total construction will increase in 2017 by 6.3 percent over 2016, and by 7.2 percent in 2018. Total nonresidential construction spending anticipates a 5.5 percent increase this year. Investors, developers and builders are cautiously optimistic. To counter the effects of e-commerce, the retail industry is now working to make the shopping experience more enjoyable, and therefore a reason for people to shop at local malls. That, experts say, should help fuel continued growth.

Off-site/Modular Construction

Modular construction, a process in which a building is constructed off-site under virtually identical circumstances as on-site projects, has been around for decades. Business owners have only recently developed a serious interest in it given the number of high-profile projects in the past few years. Owners also realize modular can be done in a shorter amount of time for less money.


Two technologies that will be the rave of the construction industry include augmented reality (AR) and virtual reality (VR). A digital recreation of the real world, VR is generally experienced through the use of special headsets or visors. A couple of VR headsets to have reached the construction market recently are the Oculus Rift and the HTC Vive. This technology is used more off-site by architects and engineers while AR, which involves placing a single piece of virtual, or digitally simulated, information to a specific point in reality, has greater use on construction sites.

A Labor Shortage

Construction has experienced a labor shortage for some time now, and industry sources expect it to worsen. The good news is mainly for construction workers, since labor shortages are driving up construction costs. The labor shortage will also result in longer construction schedules.

Constructions Costs Will Rise

Commercial construction costs will increase this year by three to 4.5 percent in six major markets across the U.S., including three in the Midwest, Mortenson’s quarterly Construction Cost Index predicts. Consequently, it adds, construction costs nationwide should go up as well. This all is due largely to rising labor costs caused by the current labor shortage.

We at CALTEC pride ourselves on our work. As a general contractor able to handle any construction project, we can answer any question you have on the subject. For more information on emerging trends in the construction industry, please contact us.