Good morning, readers.
When I covered the energy and manufacturing sectors in Houston, I heard a lot of talk about the approaching labor cliff, as the aging skilled workforce that manned refineries and chemical plants was nearing retirement. The problem was that there weren’t enough younger workers trained to replace them, and many employees who lost their jobs in the 2015 oil downturn were gone for good, fed up with the boom-and-bust cycle of the sector.
Our top story today involves similar dynamics in the construction industry. In that sector, employers have had trouble pulling in and holding onto skilled workers. There are concerns that if a recession leads to layoffs, those workers will leave the industry and won’t be around to build on an eventual recovery.
Read on to find out more about that and other business news from across the U.S.
Top story: Recession could exacerbate long-term labor issues in construction
The construction industry in the U.S. has struggled to attract and retain labor amid a tight market for workers, but an economic recession could make the problem even worse, reports The Business Journals’ Ashley Fahey.
If the pipeline of projects does start to slow because of a recession, existing workers who suddenly find themselves out of a job may leave the industry and not come back when the cycle picks back up, which is what has happened historically.
Also, in decades past, it wasn’t unusual for construction workers to relocate after a major bridge or road project wrapped up. But with construction so busy across the nation in recent years, and overall attitudes toward work changing, people are more reluctant now to relocate to follow projects, Julian Anderson, president of Rider Levett Bucknall Ltd., a law firm that specializes in property and construction advisory services, told Fahey.
So far, nonresidential projects haven’t shown signs of slowing, despite mounting concerns that a recession might be around the corner. If that changes and the labor dynamics play out as they did in the late 2000s, the loss of talent will be exacerbated by a retiring skilled workforce, too.
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Banking: Analyst: $8B bank deal may not get done
Minneapolis-based U.S. Bancorp’s (NYSE: USB) $8 billion cash-and-stock purchase of San Francisco-based MUFG Union Bank N.A.’s retail operations may not reach the finish line, reports Mark Calvey of the San Francisco Business Times.
The deal has already been delayed from late 2022 to early 2023, and national banking analyst Dick Bove of Odeon Capital Group said he thinks things have changed for the deal.
“I have been asked several times whether the recent appointment of Michael Barr as the new vice chairman of the Federal Reserve in charge of bank supervision will have an impact on U.S. Bancorp’s proposed acquisition of Union Bank,” Bove said. “The answer is that I do believe that the environment has changed and that it does put this acquisition at risk.”
Another complicating factor is a recent $37.5 million settlement agreement by U.S. Bank over sales practices that included opening accounts and credit lines without customers’ authorization. If the issue spirals into a bigger problem, there will be more penalties to pay, Bove said. But the settlement could also indicate that the bank and government have resolved the issue, in which case approval for the MUFG deal could be forthcoming.
The Playbook: Expanded tax credit could be boon for small businesses
There’s a lucrative tax credit for small-business owners included in the sweeping health care and climate-change bill the Senate passed this week, reports Andy Medici of The Business Journals.
Buried in the bill alongside a minimum tax for large corporations and investment in climate-change mitigation is a doubling of the refundable research and development tax credit from $250,000 to $500,000.
While R&D tax credits have traditionally been harder to access for small- and midsize-business owners, changes in the law and new companies offering R&D tax services have left small-business owners better positioned on that front.
Joshua Lee, founder and CEO of Ardius, a platform owned by payroll and benefits provider Gusto Inc., previously told Medici that businesses can qualify for the research and development tax credit if their spending meets a certain set of criteria — and can help return significant amounts of money to the business.
Industrial: Can manufacturer to close two factories, delay construction on third
Broomfield, Colorado-based Ball Corp. (NYSE: BALL) will close two of its older U.S. factories and delay construction of a new plant, reports Greg Avery of the Denver Business Journal.
The aluminum-can manufacturer will lay off dozens as a result of the closures, which it said come amid flat demand for its product. The pullback follows months of record-setting growth for the company and a beverage-can shortage that saw the company building new plants and importing from overseas to keep up.
Now the market is returning to slower growth more in line with historical norms. The closing plants both are about 50 years old and aren’t as efficient as new U.S. plants Ball Corp. has opened in recent months.
Ball Corp. also is delaying construction of a large can factory in North Las Vegas that it planned to build this year. The company projected the North Las Vegas plant, being built to supply an unidentified beverage company committed to be the anchor customer, would cost $290 million to build.
Logistics: Shipping constrained, could tighten further
Global shipping constraints are driving up market rates in the industry, according to Newport, Rhode Island-based maritime transporter Pangaea Logistics Solutions Ltd. (Nasdaq: PANL) CEO Mark Filanowski.
That’s especially true in commodity and niche markets, where Pangaea operates, Filanowski said. The company just posted second-quarter earnings at $195.5 million, up 34% year over year, reports Providence Business First’s Mary Serreze.
Upcoming environmental standards from the International Maritime Organization could tighten the market even further, Filanowski said. The new standards, set to go into effect in 2023, will require fleet operators to reduce greenhouse gas emissions.
Bought, sold and listed: Rimrock Farms estate lists for $7M
Rimrock Farms on Union Hill in Redmond, Washington, recently hit the market with a $6.95 million listing, reports Patti Payne of the Puget Sound Business Journal.
The 36-acre estate, which belonged to the late Parker and Alix Trewin, is being sold now by their son Todd Trewin. Todd told Payne of his father romanticizing the West and how the property and the home they built reflects that love.
“He put in post-and-pole beams, very rustic and early Americana, with a huge walk-in fireplace with an arm on it to hang a pot to make stews,” Todd said.
The main home, which has a rustic feel, is 4,450 square feet, with four bedrooms, four bathrooms and views of the Cascade Mountains. There’s also a bunkhouse cabin that has one bedroom and one bathroom, two barns, an equestrian arena, a workshop and more outbuildings.
See more photos of the property here.
Other top-of-the-market sales and listings include:
And finally … CEO: ‘Focus on a problem that you feel deeply connected to’
Atlanta-based food waste solution company Goodr Inc. has managed to divert 3 million pounds of food from landfills since it was founded in 2017, reports Zach Armstrong of the Atlanta Business Chronicle.
The company’s founder and CEO, Jasmine Crowe, started the company to help address a problem — food waste — that she had been trying to tackle on a personal level for years.
“Focus on a problem that you feel deeply connected to,” Crowe said. “The journey of an entrepreneur is full of ups and downs, and it takes true commitment to solving a problem to keep you going through it all.”
Goodr, which runs an app that allows restaurants and venues to deliver surplus food to a facility that can distribute it to those in need, raised $8 million in June.
Thank you for reading. If you want to reach me for questions, comments or news tips, you can do so at jmann@bizjournals.com.
Source: bizjournals.com
