Tuesday, 26 November 2013

Construction Costs Rise in November as Labor Costs Climb

Construction costs in North America rose for the 22nd consecutive month in November as labor costs continued to increase amid growing industry concern over the tight availability of skilled workers, reports For Construction Pros.

The Engineering and Construction Cost Index (ECCI) registered 53.2% in November, up from 52.6% in October, according to IHS Inc. and the Procurement Executives Group (PEG). The ECCI indicates that construction costs in North America have been on the rise for nearly two years since January 2012.

The index divides construction costs into two major categories: materials/equipment and subcontractor labor. With the materials/equipment portion of the index hovering near 50* since April, it was the labor segment that drove the increase for the month.

The current subcontractor labor index climbed to 58.5%, up from 56.4% last month, with the strongest gains in November concentrated in Western Canada as well as in the southern and western regions of the United States.

Shale Shock

The shale gas boom in the United States is playing a major role in driving increased spending on construction and rising costs for associated labor in North America.

“Labor concerns have been reported in the U.S. Gulf Coast, where demand from new downstream energy projects is expected to increase,” said Laura Hodges, director of the pricing and purchasing service at IHS. “Some in the industry are even suggesting shortages of skilled laborers such as welders and pipefitters in 2014 because of increasing investment in such projects.”

For several years, materials costs were the major factor driving up expenses for North American construction firms, as China’s economic boom ate up the available global supply. However, as China’s growth has slowed, the focus has shifted from materials to labor.

North American construction companies now say their main concern is the continued increase in labor costs. With U.S. spending on construction on the rise and skilled workers aging, the availability of skilled laborers is likely to become tighter.

 While costs for these skilled laborers are on the increase, the wage inflation is not likely to climb as high as it did in 2007, when a strong U.S. economy spurred double-digit annual pay increases for these skilled areas. This is largely because the strength of the U.S. economy is not as uniform as it was 2007 and employers are investing in training and mentoring programs to be prepared for this next wave of activity.


Looking at the material/equipment segment of the ECCI, November recorded the seventh consecutive month of falling prices for carbon steel pipe and a fourth month of declining freight rates between Asia and the United States. Copper-based wire and cable and fabricated structural steel also joined the ranks of falling prices in November and moved below the 50-percent threshold.  Read More.



Tuesday, 12 November 2013

Net Zero Energy Building Certification Defines What Net Zero Really Means

Guest editorial by Lloyd Alter. Design / Green Architecture 

One of the problems in the green building world is the lack of clarity in the terms used. I have been complaining about the term Net Zero Energy for years, claiming that it had little to do with green building at all, that “you can make a canvas tent net-zero if you have the money to put enough solar panels on it.” There was no real satisfactory definition, no rigorous certification.

That is not true anymore; the Living Building Challenge has developed the Net Zero Energy Building Certification and it is rigorous indeed. They note the need for it:

Net Zero Energy is quickly becoming a sought after goal for many buildings around the globe – each relies on exceptional energy conservation and then on-site renewables to meet all of its heating, cooling and electricity needs. Yet the true performance of many developments is overstated – and actual Net Zero Energy buildings are still rare.

The certification verifies that the building actually operates as claimed, “harnessing energy from the sun, wind or earth to exceed net annual demand.” It can’t be a canvas tent, either; there are other requirements from the Living Building Challenge that must be considered:

Limits to Growth (in part): Curbs the building’s contribution to the effects of sprawled development, which undermines the positive impact of achieving net zero energy building operation.

Net Zero Energy: Serves as the primary focus of Net Zero Energy Building Certification.

Rights to Nature: Ensures that the building does not preclude another building from achieving net zero energy operation as a result of excessive shading.

Beauty + Spirit and Inspiration + Education: Underscore the notion that renewable energy systems can be incorporated into a building in ways that are attractive and inspiring. Read More.

Monday, 11 November 2013

Digital Issue of Nov-Dec 2013 NC Construction News Available Online

The digital edition of North Carolina Construction News is now available.  Click Here to start reading the November-December 2013 magazine. This issue features:
* Collaboration Takes Healthcare to New Heights
* North Carolina Subcontractors Alliance Gives Voice to Area Trades
*Sandy Grove Middle  School Raises the Bar for Sustainability
*How to Use Niche Marketing Techniques to Grow Your Business

Construction Industry’s Unemployment Rate Drops to 9 Percent

Construction employment hit a 50-month high as employers added 11,000 jobs in October, the fifth consecutive month of sector job gains, and the industry unemployment rate fell to 9 percent, according to an analysis of new government data by the Associated General Contractors of America.

Association officials said that the new employment figures indicate there was little nationwide short-term impact from the federal government shutdown and cautioned that skilled worker shortages are likely to grow as the industry continues to expand.

 “After some very dramatic declines and years of sluggish growth, the construction industry is slowly adding jobs,” said Ken Simonson, the association's chief economist. “The federal government shutdown did not appear to have undermined construction job growth in the short term probably because it did not significantly impact projects that were already underway.”

Construction employment totaled 5,834,000 in October, an increase of 185,000 from a year earlier, and is now at the highest level since August 2009. Simonson noted that the October increase was the fifth consecutive month of construction job growth. Meanwhile, the unemployment rate for workers actively looking for jobs and last employed in construction declined from 11.4 percent in October 2012 to 9 percent last month.

Nonresidential construction firms added 6,600 new jobs in October while residential firms added 4,800 jobs. Within the nonresidential sector, heavy and civil engineering firms – which are most likely to perform federal construction work – added only 200 jobs. The modest increase for that sector was likely caused by declining public sector demand and not the federal shutdown, Simonson noted.

As the industry continues to add new jobs, many firms report they are having a hard time finding qualified workers to fill key positions. The number of unemployed construction workers has declined at a faster rate than the industry has added jobs as laid-off workers either retire or found work in other sectors. During the past three years, the number of unemployed construction workers has declined by 712,000 while construction firms have added 323,000 new jobs, the association’s chief economist said.

 Association officials said another reason construction employers were worried about finding enough qualified workers is the limited number of career and technical education and training programs that exist. They noted that many school districts have eliminated vocational education programs, during the past several decades. They said they were preparing a series of proposals to increase the number of career and technical education and training opportunities that they will release later this year.

 “While we have a long way to go before construction employment hits pre-recession levels, we need to take steps now to keep up with growing demand,” said Stephen E. Sandherr, the association’s chief executive officer. “The last thing we want is for the lack of qualified workers to undermine the sector’s recovery.”  Read More.


Wednesday, 23 October 2013

Nominations Now Open for 2013 Pinnacle Awards

General and prime contractors can win recognition for your own work and the work of your specialty contractors and suppliers. Nominations are open for the 2013 Carolinas AGC Pinnacle Awards in the categories of: Best Building Project, Best Highway-Heavy Project and Best Utility Project. The entry deadline is Nov. 22, 2013.

Candidate projects are evaluated on unique aspects, special values, special challenges, project management, budget/schedule and safety performance. The GC can honor the work of member specialty contractors or supplier/service companies whose contributions were critical to a project’s exemplary nature and success. If the project wins, stakeholders will be honored with a Carolinas AGC Pinnacle Award. The GC or prime contractor may choose to name an architect or engineer firm as an equal partner in excellence for any project submitted. Read More.

Most Frequently Cited OSHA Standards in 2013

The top four standards on the 2013 list are the exact same ones that made up the top four in fiscal year 2012, and in the same order, reports the Steel Erectors Association of America.

This year no OSHA official was on hand at the 2013 National Safety Congress and Expo for the unveiling of the top 10 list because of the federal government shutdown.

“I’ve had the privilege of hosting this presentation the last five years, and every year we’ve had an official from OSHA here to talk with you about these top 10 violations and how they relate to workplace hazards and what they mean to workplace safety,” Kyle Morrison, senior associate editor for the National Safety Council’s Safety and Health magazine, told a large crowd on the expo floor at the McCormick Place in Chicago.

In a brief presentation, Morrison unveiled the preliminary figures for the top 10 most frequently cited OSHA standards in fiscal year 2013:

Rank -  Hazard Standard - Violations

 1 Fall protection (1926.501) 8,241
2 Hazard communication (1910.1200) 6,156
3 Scaffolding (1926.451) 5,423
4 Respiratory protection (1910.134) 3,879
5 Electrical, wiring methods (1910.305) 3,452
6 Powered industrial trucks (1910.178) 3,340
7 Ladders (1926.1053) 3,311
8 Lockout/tagout (1910.147) 3,254
9 Electrical, general requirements (1910.303) 2,745
10 Machine guarding (1910.212) 2,701

Although there hasn’t been much deviation in the list, Morrison said he expects OSHA’s recently revised hazard-communication standard to be the focus of attention in the coming years. OSHA revised the hazcom standard in March of 2012 to align the rule with the United Nations’ global chemical-labeling system. The deadline is December 1, 2013 for employers to train their workers on the rule’s new labeling elements as well as the new standardized format for safety-data sheets. Read More.

Friday, 18 October 2013

Hundreds Attend FEDCON Summit Despite Federal Government Shutdown

A chance to land work on a federal construction site brought more than 650 people to Wilmington, NC this week for the 2013 North Carolina Federal Construction, Infrastructure & Environmental Summit (FEDCON). Despite the federal government shutdown, organizers said they had a record number of attendees including government officials, contractors and exhibitors, as well as North Carolina Construction News.

Coastal News 14 reports first time exhibitor, James Davis said his company was concerned about whether the government shutdown would stop federal and military agencies from coming out.  “These are the folks that we need to talk to in order to understand which opportunities are available,” said Davis.  But military officials said to find quality contractors and suppliers they need this networking opportunity just as much as anyone else. They said while future negotiations on Capitol Hill creates some uncertainty, they are moving forward.

“The work still needs to be done on behalf of the nation and behalf of our stakeholders so while it may be delayed, it may be decreased, it’s not going away,” said Col. Steven Baker, with U.S. Army Corps of Engineers.

In fact organizers said in the next year, they are expecting $300 million in new construction and another $100 to $300 million in renovation work. Plus, there is still work on military bases from the seven billion dollar construction boom that started back in 2008.”We’re sort of moving past that bump, and it’s going to even out at that $300 to $400 million dollar sustained level of new construction,” said Scott Dorney, executive director of the NC Military Business Center.

Large companies, small companies and everything in between were at the summit. While there are opportunities for all of them in the federal construction industry, Dorney said small businesses could start seeing even more.”

As we see these dollars start to level out at a slightly lower level, that may represent even more opportunity for the small businesses,” said Dorney.  Davis said despite what is going on in Washington, he is pleased with what is going on in North Carolina. “We feel like there’s going to be an excellent opportunity for future contracts,” said Davis. Read More.