Your McCarthy Update
Marty McCarthy, CPA, CCIFP
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Focused on You. Dedicated to Your Success.
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August 16, 2021
Construction & Real Estate News
(Construction Dive) Nonresidential construction prices soar 23% year over year. Nonresidential construction input prices are up 23.4% since this time last year, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics' data released Aug. 12. For July, nonresidential construction input prices increased 0.8% since the month before. While softwood lumber saw a 29% dip in prices since last month, the cost of other types of products used in construction has continued to grow. Energy prices have experienced substantial year-over-year price increases, with the price of natural gas up 146.7%, and crude petroleum and unprocessed energy materials prices up 102.9% and 93.8%, respectively. Prices for steel mill products, which increased 10.8% in July alone, are up 108.6% for the year. Learn more.
(Construction Dive) Industry Pulse: The latest construction data and statistics. This hub is updated twice a month with the metrics that matter most to the commercial construction market. Read the latest reports.
(Construction Executive) Nonresidential construction adds only 2,900 jobs in July, but liquidity remains high. The nation’s construction industry added 11,000 jobs on net in July, according to an Associated Builders and Contractors (ABC) analysis of data released by the U.S. Bureau of Labor Statistics. Overall, the industry has recovered 886,000 (79.6%) of the jobs lost during earlier stages of the pandemic. Nonresidential construction employment expanded by 2,900 positions on net, though 100% of the gains were among nonresidential specialty trade contractors, which added 7,500 jobs. The nonresidential building (-2,500) and heavy and civil engineering (-2,100) segments both lost jobs in July. The construction unemployment rate fell to 6.1% in July. Unemployment across all industries declined from 5.9% in June to 5.4% last month. Read more.
(GlobeSt.com) Dodge Index decline raises concerns construction recovery may stall. The Dodge Momentum Index declined 6% in June to 155.8 (2000=100) in July, a 6% decline from the revised June reading of 164.9. Both components of the Dodge Data & Analytics’ Momentum Index, a monthly measure of the first report for nonresidential building projects in planning, fell in July. Commercial planning fell 3% and institutional planning dropped 9%. Read more.
(GlobeSt.com) Why opportunity zones won big in Q2. Median home price values rose annually by at least 15% nationally and increases in opportunity zones were on par with those outside of the zones. In a new report, ATTOM found that median single-family home prices increased from the second quarter of 2020 to the second quarter of 2021 in 75% of opportunity zones and rose by at least 15% in about half of those regions. Read more.
(GlobeSt.com) Return to pre-pandemic office values could be five years away. A study by from Valcre of appraisers found that more than half of respondents say the state of the U.S. office market is currently unclear, with another 30% deeming the market healthy. Nearly three-quarters of respondents say they believe asking rents are too high when compared to the current market value of office properties. Research from Newmark currently lists national pricing at $30.29 per square foot. Read more.
(Insider) 3 signs that the housing market is starting to get better after a historic affordability crisis. New data show early signs of the housing market finally easing after months of surging prices. Selling prices on Redfin fell in July — the first time they didn't set a new record in five months. Inventory is rebounding, and sales aren't happening with the same speed and bidding wars as before. Read more.
(MarketWatch) Mortgage rates rise for first time in over a month as key economic reports shift the market’s outlook. The 30-year fixed-rate mortgage averaged 2.87% for the week ending Aug. 11, up 10 basis points from the previous week, Freddie Mac FMCC, reported on August 12. It’s the first time in six weeks that the 30-year loan rose on a weekly basis. The 15-year fixed-rate mortgage increased five basis points to an average of 2.15%, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage ticked up by four basis point to an average of 2.44%. Read more.
Accounting & Tax News
(IRS) IRS provides relief for certain employers claiming the Work Opportunity Tax Credit. The IRS announced it is providing transition relief to certain employers claiming the Work Opportunity Tax Credit (WOTC). The WOTC is a federal income tax credit available to employers that hire certified members of certain groups specified in the Internal Revenue Code who face significant barriers to employment, including Designated Community Residents or Qualified Summer Youth Employees. Learn more.
(Journal of Accountancy) IRS updates car and truck depreciation limits. For passenger automobiles to which bonus first-year depreciation deduction applies and that are acquired after Sept. 27, 2017, and placed in service during calendar year 2021, the depreciation limit is $18,200 for the first tax year (an increase of $100 from 2020); $16,400 for the second tax year (an increase of $300); $9,800 for the third tax year (an increase of $100); and $5,860 for each succeeding year (an increase of $100). For passenger automobiles to which no bonus first-year depreciation applies, the depreciation limit is $10,200 for the first tax year; $16,400 for the second tax year; $9,800 for the third tax year; and $5,860 for each succeeding year. Read more.
Business & Economic News
(Business.NJ.gov) New funding matches to support New Jersey startups. Applications will open on Monday, August 16 for a $1.25 million grant funding round through the New Jersey Small Business Innovation Research (SBIR) and Small Business Technology Transfer Program (STTR) Direct Financial Assistance Program. The program provides a $25,000 to $50,000 funding match to New Jersey-based companies that have received federal SBIR/STTR grants. Register online for an informational webinar at 10 am on Thursday, August 19 and apply online before Friday, October 8, 2021. Access the Application Portal.
(Financial Management) The hidden risks and costs of ransomware. Organizations of all sizes are at risk from ransomware, which has become an increasingly common tool for cyberattackers. This podcast with a transcript provides information on how to prevent, detect, and mitigate risks of this pervasive threat. Learn more.
(SmallBizAhead) How to create a disaster recovery plan for your small business. Any small business can get turned upside down by an unexpected event whether it’s from COVID-19, a wildfire, or a hurricane. But having a disaster plan in place can help get you back in business quickly. Learn more.
(Reuters) U.S. consumers' near-term inflation expectations remain high. Median expectations for inflation over the next year stayed at a series high of 4.8% in July, following a substantial jump in June, according to the monthly survey from the New York Fed. Read more.
(The Hill) Producer prices rose in July. Producer prices rose a seasonally adjusted 1% in July and record-breaking 7.8% over the past 12 months on an unadjusted basis, according to data released on August 12 by the Labor Department. The producer price index (PPI) for final demand, which measures changes in prices charged by domestic producers to suppliers and retailers, rose at the fastest annual pace since the federal government began calculating year-over-year PPI changes in November 2010. The PPI without food, energy and trade services rose 6.1% on an unadjusted basis over the past 12 months, the highest level recorded since the series began in August 2014. Read more.
COVID-Related News
(CPA Practice Advisor) Tax credit for businesses that paid leave to workers helping family get COVID vaccination. The IRS has updated frequently asked questions (FAQs) on the paid sick and family leave tax credits under the American Rescue Plan Act of 2021 (ARP). The updates clarify that eligible employers can claim the credits for providing leave to employees to accompany a family or household member or certain other individuals to obtain immunization relating to COVID-19 or to care for a family or household member or certain other individuals recovering from the immunization. Learn more.
(Forbes) Do I need to repay the child tax credit? While millions of Americans have begun to receive the monthly child tax credit payments, they might be in for a big surprise. That’s because, unlike the stimulus payments, if you received too much, you may need to repay it. Learn why.
(Inc.) The SBA gives a break to borrowers who are appealing their PPP loan decisions. Business owners appealing their PPP loan forgiveness decisions no longer have to start paying principal and interest fees during their loan's repayment period. Read more.
(Philadelphia Business Journal) PPP loan forgiveness portal: Find out which Philadelphia-area lenders are participating. While the number of participants has grown, most lenders are opting not to use the U.S. Small Business Administration’s PPP loan forgiveness portal that was unveiled last week. Read more.
(Philadelphia Business Journal) These three SBA Covid-19 small business programs still have money. Small business owners who haven't seen the summer rebound they expected from Covid-19 or are dreading a winter dealing with the potential economic fallout of the Delta variant still have some relief funding options from a set of SBA relief programs. Read more.
(The New York Time) Biden administration extends a student loan payment pause. The Education Department announced that it would continue a moratorium on federal student loan payments through January 31, extending emergency relief for millions of borrowers that had been set to expire next month. The department said that this would be the “final extension” of the pause. Read more.
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Stay safe,
Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
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