Unprecedented revenue, unprecedented inflation in NM construction

As mentioned recently, New Mexico policymakers will again have a stunningly large budget surplus when they convene in January, but revenues are not the only thing rising. Inflation is as well, especially in the construction industry Daniel Chacon writes in the Santa Fe New Mexican.

In addition to Chacon’s article, RGF’s Paul Gessing recently sat down with Carla Kugler to discuss the current state of New Mexico’s construction industry.

We definitely agree with analyst Cally Carswell on the following:

• Prioritize or restrict 2024 capital appropriations to complete existing projects.
• Prioritize emergency or critical infrastructure projects.

We’d add a few more:

• End Davis-Bacon work requirements and ban Project Labor Agreements (on the books in ABQ and Bernalillo County, both of which raise costs and restrict labor supply on construction jobs.
• Make a specific, long-term plan to increase New Mexico’s low workforce participation rate with a special emphasis of increasing participation in the construction industry.
• Finally, while it isn’t a state policy issue per se, it is worth noting that the Biden Administration’s massive debt-laden spending bills including the so-called “Inflation Reduction Act” are further increasing construction costs.