Welcome to Sector Insights... offering construction industry executives the latest tax, business and financial news affecting your sector... and ultimately, your success.
CONTRACTORS BENEFIT UNDER NEW TAX REFORM RULES
Ever since Congress passed the Tax Cuts and Jobs Act, much of the tax-savings attention has centered on a lower tax rate for C-corporations. But as RBF partner
Vincenzo Botta explains, other business structures can get a bite at the tax reduction apple, too.
Businesses organized as pass-through entities (as many construction companies are) can feast on the new 199a deduction. Other changes in the law mean companies can immediately expense more of the cost of certain business property. And many are now able to write off most depreciable assets in the year the assets are placed into service.
REPORT: 4.8% RISE IN CONSTRUCTION SPENDING THIS YEAR
Construction spending in 2019 is expected to continue rising - up 4.8 percent - although at a slower pace than last year's 6.5 percent growth, according to Atradius's annual Market Monitor for the global construction industry.
As the U.S. economic expansion slows down, commercial construction growth should decline slightly this year due to higher office vacancies.
Residential construction is expected to grow modestly on the back of wage growth, low unemployment and low inventories, while higher interest rates will have an adverse effect, the report said.
CONSTRUCTION EMPLOYMENT CLIMBS IN JANUARY TO 11-YEAR HIGH
Construction employment increased by 52,000 jobs in January and by 338,000 jobs, or 4.7 percent, over the past year, while the latest reading on construction spending showed moderate increases in all major categories, according to an analysis of the latest government data by the Associated General Contractors of America.
Association officials urged government officials to strengthen career and technical education programs and facilitate immigration for workers with construction skills before a worker shortage stalls completion of needed infrastructure.
WILL ECONOMIC UNCERTAINTY LEAVE CONSTRUCTION TECH IN LIMBO?
When a cooling of the economy is evidenced by a combination of risks and hints, companies typically reel in their budgets, which often leaves technology investments left hanging in the balance.
But ups and downs are inherent to the economic cycle, so it shouldn't come as a surprise that growth is gearing down after the industry's extended period of expansion. Ideally, says Kathleen Brown of ConstructionDive.com, a long-term IT strategy should account for this and look more like a straight line that cuts through the volatility.
THE PUNCH LIST
Bill Rucci recently presented a seminar about federal tax reform law to members of the Mass. chapter of
Associated Builders and Contractors at the RBF Training Center. Titled
"How the Tax Cut and Jobs Act of 2017 Will Impact Your Construction Firm," the session focused on the financial and reporting impact of new tax provisions on construction-related companies.
500 Unicorn Park Drive, Suite 101, Woburn, MA 01801