“If we fail to make the investment in our aging transportation infrastructure, our economy will suffer. Our transportation system is the backbone of the economy, and it drives growth in sectors beyond construction.” — Robert Stevens, president of the American Society of Civil Engineers

The amount of money the federal government currently invests each year in state highway, bridge and public transit infrastructure programs — about $50 billion — contributes to the country’s economy in ways that may not be obvious. Each dollar of federal investment in transportation infrastructure adds between $1.82 and $2.00 to the annual gross domestic product in the U.S., according to a report released by IHS Global on Wednesday. It also contributes to about 614,000 jobs and increases household income by an average of $410.

The report was commissioned by the Transportation Construction Coalition – a group of 31 national associations and labor unions that is co-chaired by the Associated General Contractors of America and the American Road & Transportation Builders Association. (read more…)

The U.S. economy has made steady progress since last year, registering an average score of 59 on the Bank of America Merrill Lynch 2015 CFO Outlook survey. This is an increase of six points from last year on the 100-point index, with 100 representing an exceptionally strong economy.

The survey tallies responses from 603 financial services sector executives for firms with revenues between $25 million and $2 billion. Most participants reported a bright outlook for their companies.

“With a steadily improving economy as a backdrop, growth is top of mind for CFOs in 2015,” said Alastair Borthwick, head of Global Commercial Banking at Bank of America Merrill Lynch. “Companies are moving from maintaining their position to growing in earnest by hiring new employees and taking steps to expand.”

Fifty-two percent of survey respondents expected their companies to hire more full-time workers in 2015, the first time in seven years that metric has risen above 50%. (read more…)

The turning point in the building industry dawned in May 2014, when the “total employment level reached its prerecession level” and companies stopped looking in the rear-view mirror trying to outrun the Great Recession and started to think again of the future. So said Alex Carrick, North American chief economist at CMD during last week’s webinar on the state of the industry.

The webinar, hosted by CMD, formerly Reed Construction Data, and sponsored by Infotech, also included the industry’s other top economists, Ken Simonson of the Associated General Contractors of America and Kermit Baker of the American Institute of Architects who proffered their perspectives.

The construction-labor picture

The unemployment rate in the industry has fallen to 6.5% in October from 17.3% four years ago, Simonson says. However, while that rate is still coming down, the employment rate is nowhere close to 10 million employed during the peak period because lots have left industry, say Simonson and Carrick. (read more…)

When it comes to systemic risk, experts at CME Group’s 7th annual Global Financial Leadership Conference remain skeptical about whether policymakers have the right tools, let alone know what to do with them.

Kevin Warsh, a former member of the board of governors at the Federal Reserve, said he is concerned about huge burden being placed on macroprudential oversight, especially considering there is no academic research or history on how to do it. “We are running an experiment we have not run before,” Warsh explained.

MIT professor Andrew Lo said it is not clear that the Federal Reserve’s tools are fit to deal with systemic risk problems because the very nature of systemic risk also continues to evolve. Lo explained that from an academic and policymaking perspective, the financial crisis is the “gift that keeps on giving.”

The creation of the Office of Financial Research was one of the key successes of Dodd-Frank. (read more…)

Terry Duffy is the Executive Chairman and President of CME Group, which is hosting its annual Global Financial Leadership Conference next week in Naples, Fla. Mr. Duffy chatted with SmartBrief and shared more background on the GFLC.

1. The Global Financial Leadership Conference is now in its 7th year … How has the event evolved?

The GFLC has come a long way in its short history. Our goal in developing the conference was to provide a venue for some of the brightest minds in business, economics, media and politics to have a dialogue about current issues and risk in our global economy. To do that, we created an event that brings together decision makers from the world’s leading financial institutions to discuss emerging geopolitical trends, debate critical economic issues and provide perspectives on future developments in the global marketplace – those decision makers have included Presidents George W. Bush and Bill Clinton; British Prime Ministers Tony Blair and Gordon Brown; and Secretaries of State Hillary Clinton, Condoleezza Rice and Madeline Albright just to name a few. (read more…)