The Economic Perspective 9/4/2026
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Happy Friday!
Welcome back to another edition of the Economic Perspective, and happy Labor Day! Labor Day has celebrated the hardworking public for nearly 150 years, having been first introduced as a national holiday by Grover Cleveland. Unofficially, Labor Day is seen as the tail end of summer, and (if The National Hot Dog and Sausage Council is to be believed) the end of Hot Dog Season - though technically, the Equinox marks the true beginning of fall. As September marches on, it is nice to reflect on this last summer and the weather it brought as we transition into autumn and all the beauty it will bring. We at TBG hope it brings you peaceful holidays and togetherness with those you love.
In an update on the Iran War's effects on the fuel market, erratic changes continue with oil price forecasts as Morgan Stanley and Barclays have readjusted expectations of Brent crude prices to $100 per barrel by the end of Q4 2026. This is a significant change compared to previous forecasts that hovered around $80-$85 per barrel. More information can be found here and here.
In this week's Economic Perspective, we have articles covering the trade conflict with Canada, nuclear energy, a pest insect newly found in WA, a new round of EPA grants, and more. Our data visualization features China's oil imports and their response to the Iran conflict.
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Construction Industry Impacts from Trade Conflict with Canada
With a renewed trade conflict with Canada and 50% tariffs on plywood, steel, cement, and other related products, the construction industry is expected to see major price increases. Suppliers are buying up material as much as they can before the tariffs hit, but future costs are already expected to climb as the US lacks the infrastructure to increase domestic production before prices take a major hit. Businesses may try to absorb some costs in the short-run but are warning of increased pricing volatility and uncertainty. Both small home renovation projects, and larger construction projects are expecting to see major hits in price increases. Read more here and here.
New Opportunities for Nuclear Energy
With increased energy demands from the tech industry, federal government companies like Kiewit have seen dramatic increases in revenue sharing coming from nuclear energy. This presents an opportunity for increased investment, as Kiewit expects to see large returns with forecasts of nuclear being a billion-dollar-per-year industry for them. The US Army is also investing in nuclear microreactors with five developers chosen for a $2.2 billion program. These microreactors will provide energy at military installations with hopes of 20 reactors being built. Read more about new investment in nuclear here and here.
Projects Selected by EPA Grant Program
24 projects have been selected for funding by the EPA’s Gulf of America Division (GAD) from their Innovative Solutions for Improving Water Quality and Strengthening Local Economies in the Gulf of America Watershed Notice of Funding Opportunity. Goals and details of projects that were funded included nutrient reduction, algal bloom reductions, drainage system improvements, water quality improvements, sewer sanitation, and much more. Applicants were required to cite how the usage of innovative technology would be used to save costs, improve water quality, and increase economic benefits. Read more about the program here, and see a list of awardees here.
July Transportation Contract Values
Awards for transportation contracts from state and local governments that will break ground in the next 30 to 60 days rose $2 billion year-over-year in July, from $14 billion to $16 billion; over the same period, total value of awards was $165.6 billion compared to $143.2 billion for the period between July 2024 and July 2025. States with the highest value of awards were California, New York, Texas, Illinois, and Florida. States and local governments seem to be picking up the slack in construction spending despite spending falling in June, and proposals from the federal government to cut construction and highway and transit spending. Read more here.
Emerald Ash Borer Found in WA
Last Wednesday, officials at the Washington Department of Agriculture confirmed that the emerald ash borer, a highly destructive pest insect, was discovered in southern Washington State. The bug, which has wiped out more than 100 million ash trees in the last two decades, had been spotted both below the state near Portland, OR in 2022, and above, in Vancouver, BC, a year later. Officials have instituted a firewood quarantine statewide in an effort to contain the outbreak – as the only other effective method is to replace the ash trees with non-vulnerable tree species. Read more here.
Data Visualization of the Week
China's Strategy in Dealing with the Iran Conflict
With the closure of the Strait of Hormuz and US attempts to embargo Iranian oil from trading, heightened pressure has been placed on China who has been a heavy importer from Iran. However, China has not been as vulnerable to oil shocks as previous analyst would have guessed. While imports to China have dropped by 3.5 million barrels a day, refiners have cut runs by only 1.6 million barrels. This can likely be attributed to an estimated 1 to 1.4 billion in oil stocks China has amassed, something which presents a problem if potential conflict with China occurs, such as an invasion of Taiwan. Chinese consumers have adopted higher rates of EV usage which allows them to flex to coal usage when oil prices climb too high. While China cannot survive forever with limited imports, their resilience to oil shocks changes the landscape of potential future economic and military conflicts. Read more here and here.
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