In today’s blog, Construction News & Reports Group Publisher Mark Buckshon shares his 12 visions for the New Year. They are timeless in their application. You can mix the month and year, and they'll still work fine.
January If you value and respect your employees, suppliers and clients, you will succeed even in challenging conditions. This is not an argument in favor of becoming a push-over or for careless financial management; but you won't get far without respecting the people around you.
February Encourage individuality, freedom, and work-life balance, but maintain your discipline and accountability (and expect it from everyone around you.) Regular, systematized meetings are essential. You'll soon enough catch game playing, miscues and misrepresentations.
March Your brand is built on the overall experience that previous, current and potential clients have with your business. Your brand is trust and allows you pricing power. If you create a wonderful client experience, you'll succeed -- and that experience requires the support and participation of all of your employees and key contractors.
April Your fastest way to find new business (if your brand is healthy) is to systematically connect and remind your previous clients about why they enjoy working with you. Follow up service/inspection and free maintenance calls are probably your least expensive and most effective marketing strategies.
May Your business is your personality, and the personality of your employees. You don’t speak like a robot with business clichés to your family and your friends. Do you think your clients and employees want to hear the stuff out of the boring book, either? Example: "We deliver great client service." Can you tell a real story of some exceptional initiative where you really went beyond the norm. Better, will your client tell the story for you in a testimonial?
June Your business should be fun and you should as much as possible do what you enjoy and for which you have a passion. However, beware of salespeople playing to your emotions, your visions, your fears and your passions. Spend your time doing what you love; spend your money on the stuff you really need to do but don't like so much (and if possible select people to give the money who have the passion and competence for what they are doing.)
July Connect and participate in relevant associations. In business-to-business (and consumer) markets, your best associations are the ones where your clients and potential clients are members. Put your best and most active contributions to these associations (time more than money) and you will reap the rewards -- in time.
August If you are looking for "fast action" your best strategy is to revisit your current and previous clients for repeat/referral and additional business. A second-best solution is in-your-face canvassing and phoning (yuk). The latter approaches will work in certain circumstances but you either need a real thick skin or really good reason to pursue them.
September You can't "rely" on referrals and repeat business to succeed. You need to plan and build the cultivation of these primary business development sources into your marketing processes. The good news is, if you have a solid base of previous clients (and in good times can get away with relying on repeat and referral business), your brand is healthy, so you simply need to cultivate and develop your marketing strategy to your clients. You won't need to reduce your prices, and you won't waste your time flailing about for business.
October Use RFPs and leads services creatively. Public RFP and fee-based leads services can help you find business, but usually not directly. Sure, you can chase the public bids, and grind your pricing to the floor. However, in many cases, the opportunities are already wired. (You know you are on track if you find out stuff well before the information becomes available publicly through the leads services or RFPs). So where do the services and public opportunities help? They provide clues about what may be down the road -- and who may have future work -- and allow you to plan a forward thinking marketing strategy. See September.
November Share. Be generous (more with your time and ideas than your cash, which you should preserve!) Remember networking success is not about what you take but what you give. You need to suspend your short term needs for long term gains when you are networking; by focusing on the needs of the people around you rather than your own interests, you will find results far beyond the short-term costs.
Building space and facility needs track population and income changes with a lag of a few months for housing and up to several years for large infrastructure projects.
So the just released Census estimates of July 2008 state population provides an advance look at regional changes in construction activity in 2009-10.
North Carolina (2.0%) tied with Texas and Colorado as the third fastest growing state. Only Utah (2.5%) and Arizona (2.3%) had larger increases in population over the past year.
According to the July 2008 Census estimates reported by Reed Construction Data, North Carolina (11%) and South Carolina (11%) have the greatest net migration of people over the past year.
Outside of the mountain states and Texas, population growth is highest in the southeast: North Carolina (2.0%) and South Carolina and Georgia both growing 1.7%. The Tar Heel state continues to attract industry from more expensive Northeastern and Midwestern states and leisure & retirement immigrants who formerly went to Florida.
Florida had a net outflow of domestic immigrants in the last year. It was small, 0.01%.. But this is a dramatic change from several decades of net migration to Florida from the rest of the country. The net outflow includes both unemployed construction workers leaving to seek work elsewhere and fewer retirees coming to Florida which is no longer a cheap destination.
Together, the net population outflow and Florida’s unusually high 7.3% unemployment rate suggest that the Florida economy and construction market will worsen more than in the rest of the country in 2009.
To view the complete Reed Construction Data online report, Click Here.
Several NC companies are making components for a growing industry that supplies alternative forms of power. Contractors welcome the new business opportunities created in the renewable energy field, according to the Charlotte Observer.
Charlotte-based Sencera uses electrically charged gas to make solar panels. It's among the renewable-energy firms reaching for a toehold in a region dominated by coal and nuclear power.
Economic developers, sniffing new business, say Sencera's 15 employees could be among the first of thousands of such jobs in the region. Those workers, they say, could not only generate electricity from the sun, wind and plants but make parts for the machinery of a growing industry.
Even as North Carolina's wind power waits to be commercially harnessed, said UNC Greensboro geographer Keith Debbage, "we can be a key supplier to wind energy anywhere in the world."
A PPG Industries fiberglass plant in Shelby proves his point. The plant staved off what its manager called a "near-death experience," and created 50 new jobs, by shifting to a product used in wind turbine blades.
Debbage recently identified 519 manufacturers in the Charlotte region that could supply components for wind, solar, biomass and geothermal companies.
"It's not a fantasy," he said. "It's a matter of how big a potential market there is and how quickly it can happen."
Only 24 to 32 renewable-energy companies, depending on who's counting, now operate in the region. The State Energy Office lists more than 100 renewable-energy manufacturers in North Carolina this year, up from 28 in 2005.
Charlotte's energy sector is on a hiring spree, but most of it is focused on new nuclear power plants.
Still, global investment is flowing into renewables as technology improves, prices for coal and natural gas grow, and governments demand cleaner alternatives to fossil fuels.
A major catalyst in North Carolina is a state law, passed last year, that will force utilities to make 12.5 percent of their electricity from renewable sources and energy efficiency by 2021. The state also offers renewable-energy tax credits and created a nonprofit agency, NC GreenPower, to promote alternative energy.
"We think it's fantastic what North Carolina has done for solar energy," said Sencera CEO Rusty Jewett.
In choosing to invest $36.8 million in a Charlotte factory, he said, Sencera passed up possible locations in Canada, Germany and Dubai.
Building leases are cheap here, salaries smaller and workers more likely to stay with their companies, Jewett said. Three glass makers operate within 50 miles, providing a local supply of a heavy material used in making solar panels. The state and city offered performance-based incentives.
Practical problems remain. Solar power is still expensive compared to coal and gas, although prices are falling. The off-and-on nature of wind power is hard to tie into a power grid that continually balances supply and demand.
And an aging work force means nearly half the energy industry's engineers could retire by 2012.
"I'm much more worried about the supply side than I am about the demand side," said Steve Patterson, director of UNC Charlotte's new Energy Production and Infrastructure Center. EPIC was created to crank out engineers for the industry.
Fueling much of the demand is an expected surge in new nuclear reactors. Duke Energy, Raleigh-based Progress Energy and South Carolina Electric & Gas plan to build six new nuclear reactors in the Carolinas. Engineering, design and construction companies are flocking to the region.
Despite the surge in conventional energy, the Charlotte Regional Partnership, a 16-county economic-development agency, thinks renewable energy is a good fit with its manufacturing, distribution and technology base. Recent business forums on the subject have been filled.
"We're trying to get smart about these industries, and it's a moving target," said Kenny McDonald, the partnership's executive vice president. "We're also getting smart about what do we have and how does it align with what companies are looking for."
Charlotte's low costs, international airport and growing population lures fresh talent to the region, he said. Its wealth of business connections create contacts for sellers and customers.
And North Carolina's renewable-energy tax credits, the first in the Southeast, gave the state a welcoming image.
It's important that North Carolina not only manufacture parts but generate homegrown energy, said Paul Quinlan, research director of the N.C. Sustainable Energy Association.
"States that are successful in growing sustainable energy economies have focused within their borders," he said. "In essence, it's a branding of their state."
As it invests billions of dollars in coal and nuclear plants, Duke Energy is spending millions to meet the state renewables mandate.
Duke will buy the total output of the nation's largest solar farm, to be built in Davidson County, and spend $50 million to install roof-top solar panels across the region. It's also exploring burning waste wood at its coal- and gas-fired power plants.
Renewable energy generators hope to profit. Twenty-six companies have submitted bids to supply Duke with power.
Catawba County, for one, expects the law to double the $500,000 a year Duke pays it for electricity generated from landfill gas. The 800-acre landfill has turned into an "EcoComplex" of renewable-energy research. Sunflowers and canola, to be turned into biodiesel for the county's vehicle fleet, grow on the same site.
To read more about the NC renewable energy market, Click Here to view the Charlotte Observer article.
In the current economic environment, we realize you need to reach out to potential clients more than ever, but must do this with limited resources.
Because you are seeking more business opportunities, a feature article about your business in the print editions of Triangle/Triad Construction News or Charlotte Construction News can provide you with publicity, recognition, and further enhance your business relationships -- at no financial cost to you. For details, please call Bob Kruhm at 800-578-3216 or email email@example.com.
We encourage you to visit our Construction Marketing Ideas blog for construction marketing insights and ideas offered by Group Publisher Mark Buckshon.
All the best to you and your associates.
Triangle/Triad Construction News Charlotte Construction News
McGraw-Hill’s ENR.com reports construction industry firms, hit by the recession, are searching feverishly for more details on which infrastructure projects might be funded in the eagerly expected economic stimulus package.
Highways have been a particularly hot topic, partly because President-elect Barack Obama has mentioned that sector prominently and partly because the segment is so large.
Last week ENR posted state lists of "ready to go" transportation proposals. Click here to view View ENR's state-by-state infrastructure stimulus map with a list of NC "shovel ready" projects.
North Carolina’s list includes 35 new major construction projects with an estimated value of about $3.25 billion. Another 53 projects that could be deferred add another $1.2 billion to the total. An estimated $730 million would be needed to fund 208 other listed projects that involve either pavement and bridge rehabilitation or reconstruction.
Funding of these projects would help revive the state’s economy and create new jobs.
Charlotte Mayor Pat McCrory comments on stimulus funding
The rush is on for what could be billions in infrastructure funding, and Charlotte is making sure its needs are known, the Charlotte Observer reported today.
City officials have submitted to the U.S. Conference of Mayors a list of projects totaling more than $421 million in anticipation of President-elect Obama's bid to stimulate the economy by creating jobs.
The list includes 37 items that officials estimate could create about 3,700 jobs and net $110 million for the extension of the Lynx transit system's Blue Line and $13 million for the widening of N.C. 29/U.S. 49. Other projects that could qualify for a stimulus package:
Utilities Operation Center $12 million Fred D. Alexander Blvd. $22 million McAlpine relief sewer, $20 million Franklin Water Plant Res. Exp. $35 million
All of the projects are considered “ready to go,” which means they could be underway by 2010. If they were to come through, it could be a boon for the city.
Charlotte Councilman John Lassiter admitted that he is skeptical about the likelihood of the money reaching the Queen City anytime soon. It is an opinion shared by Mayor Pat McCrory.
“I think there are some unrealistic expectations about what the federal government can do,” said McCrory. “Even if they wanted to do this, there is not a process in place to do it.”
Obama and congressional Democrats have entered discussion about a potential $800 billion package that could include more than $350 billion for investments in infrastructure, alternative energy plans and other priorities. The president-elect hopes the plan would create or preserve 3 million jobs.
Charlotte is one of 641 cities that submitted a list. Officials with the Conference of Mayors said a total of 15,221 infrastructure projects were submitted to them, representing an investment of $96 billion and potentially creating 1.2 million jobs. Topping Charlotte's wish list are transportation needs. Streets and roads account for $131 million and could create 1,310 jobs. Transit issues, total 200 million and could create 2,000 jobs.
Councilman Lassiter said addressing transportation needs would help the city deal with congestion issues and could spur economic growth along underperforming corridors.
He said he would also like to see money dedicated to the completion of Interstate 485and the widening of Interstate 77.
Those projects would fall under the control of the state, which has compiled its own wish list for nearly $5.2 billion in road and bridge improvements.
That N.C. Department of Transportation list includes projects such as Mecklenburg's outerbelt, the Interstate 85 bridge over the Yadkin River and a loop around Wilmington.
“This area has no shortage of need when it comes to transportation issues,” said Councilman Anthony Foxx. “The federal government is going to play a major role in spurring the economy through these kinds of projects, and we want to make sure Charlotte gets its fair share.”
Click here to read the complete Charlotte Observer story.
The American Subcontractors Association (ASA) and its allies in the construction industry are asking policy makers to take new steps to ensure that surety bonding is secure, transparent and accessible. On December 15 representatives of ASA and other construction associations met with representatives of the Office of Federal Procurement Policy (OFPP)to ask regulators to review the regulation of surety bonds on federal work.
In the meeting, ASA and its allies asked OFPP, an office within the Office of Management and Budget that plays a central role in shaping the policies and practices that federal agencies use to acquire goods and services, to review sections of the Federal Acquisition Regulation (FAR) that govern which assets are acceptable for backing surety bonds.
A recent decision by the U.S. Court of Federal Claims in Tip Top Construction v. United States raised concerns that the FAR might allow individual or personal sureties to back bonds with unacceptable assets, exposing the federal bonding program to an increased risk of fraud.
ASA and its allies also asked OFPP to provide guidance on bonding to contracting officers on overseas federal projects, some of whom have declined available bonding despite the Miller Act’s allowance for waivers only when bonding is “impracticable.”
ASA is also working on a bond-waiver issue in the U.S. Senate, where Sen. Benjamin Cardin, D-Md., has called for waiving the Miller Act surety bond requirement on construction projects that are part of a new economic stimulus package. ASA has issued a legislative alert to its members in Maryland asking them to inform Cardin about the potential impact of waiving surety bonds on subcontractors and suppliers.
For more information, contact ASA Manager of Government Relations Emily Yunker at firstname.lastname@example.org or (703) 684-3450, Ext. 1333.
Leaders of North Carolina cities are intensifying their lobbying for shares of the billions in aid that President-elect Barack Obama wants to restart America's economy, the News & Observer reported.
Raleigh Mayor Charles Meeker released a list of projects today the city hopes will be considered under any federal aid package.
The projects on Raleigh’s list are currently unfunded or partially funded. The costs of the infrastructure projects run from several hundred thousand dollars for park maintenance to hundreds of millions of dollars for the city’s new public safety center.
"We really don't know exactly how the federal program is going to roll out. It hasn't been developed," Meeker said. "But we intend to have a menu of options so that however it does roll out we'll be ready to participate."
Earlier this month, Obama told the nation's governors that he supports an economic stimulus project that could save or create 2.5 million jobs. Thus far, Obama and his aides have not indicated how such an aid package might be structured or what projects might be eligible.
Raleigh came up with its list by asking its department heads to identify unfunded road, sewer and parks projects that can be started within the next six to 12 months. The list also includes alternative energy projects that are in line with Obama's goal of reducing the country's reliance on foreign oil.
Meeker said the energy projects include installing more LED lights in the city's parking garages and placing solar panels on public buildings and on the city's waste water treatment facility that could generate more than a megawatt of power.
"Since there's not as much wind in this area of North Carolina, we'll be focusing more on solar," he said.
Julie Aberg Robison, Cary's mayor pro tem, said she is advocating for Cary to create a similar list. "It would be wise of us to do so," she said.
The amount of federal money available to municipalities such as Raleigh and Cary likely depends heavily on how officials decide to allocate the money, and whether they target economically hard hit areas. Although local governments in the Triangle have felt the fallout from the national lending crisis and the housing slump, areas such as Michigan, California and Florida have fared much worse.
Julie White, director of the N.C. Metropolitan Mayors Coalition, said that's one reason Raleigh and other North Carolina cities need to articulate their needs and advocate for aid.
The coalition, which includes mayors of the state's 26 largest cities, has formed a committee headed by Robison and Rocky Mount's mayor to coordinate their message with federal officials. "Our state isn't suffering as much as others, but we have overwhelming needs," White said. The other worry for North Carolina municipalities is that little or no aid will go directly to cities.
Transportation officials in 49 states have already submitted lists detailing all the unfunded highway and bridge projects that could be started immediately if federal funds became available. The N.C. Department of Transportation list includes 296 projects totaling $5.17 billion.
Charlotte Mayor Pat McCrory said his biggest concern is that federal officials will distribute money to the state, which will use the same formula it normally does to distribute transportation dollars.
Governor-elect Beverly Perdue's office said she plans to meet with officials from the League of Municipalities, Association of County Commissioners and N.C. Metropolitan Mayors Coalition this week to discuss their concerns.
City Manager Russell Allen said the list released today is much longer and more expensive than what Raleigh typically sends to its congressional representatives each January.
The Associated General Contractors of America has launched a new national effort designed to show broad support for needed new infrastructure investments. The effort is designed to make sure that new infrastructure investments help create and preserve construction jobs and serve as a foundation for future economic growth, said Stephen Sandherr, the association’s Chief Executive Officer.
The effort is necessary because the construction sector has been particularly hard hit by the economic challenges facing the nation. More than 770,000 construction workers have lost their jobs over the past two years, Sandherr noted, adding that without new infrastructure investments, countless more construction workers could lose their jobs next year.
“We want to build a foundation of support for new infrastructure investments that is as strong as it is necessary,” said Mr. Sandherr. “These investments will put Americans back to work and make our economy strong for decades to come.”
Sandherr said that investing in new infrastructure would have significant, positive, long-term benefits for the U.S. economy. Cutting congestion, improving education and health care facilities, cleaning water supplies and improving levies will improve America’s ability to compete globally. He added that the economic slowdown has led to declines in construction material prices, meaning taxpayers will get a better deal on investments made next year.
As part of the campaign, the association has begun a new advertising campaign, new outreach to construction workers, their suppliers and business partners, and new efforts to build support from local and state officials. Over the coming weeks, the association is asking supporters to log onto to www.agc.org/letsbuild and add their names to a petition in support of vital new infrastructure investments that will go to the next Congress and the office of the President-elect.
“We have a unique opportunity to turn our short term economic challenges into long-term economic solutions,” Sandherr said. “It’s hard to imagine anyone objecting to building now for a better future.”
The Associated General Contractors of America (AGC) is the largest and oldest national construction trade association in the United States. AGC represents more than 33,000 firms, including 7,500 of America’s leading general contractors, and over 12,500 specialty-contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters. Visit the AGC Web site at www.agc.org.
Key Points: The Energy Improvement and Extension Act of 2008 was attached to the recently passed Emergency Economic Stabilization Act of 2008.
•The act extends, adds, and enhances a number of tax credits and financial incentives related to renewables and energy efficiency.
•The 30% tax credit for residential and commercial solar installations has been extended eight years.
President Bush recently signed the $700 billion Emergency Economic Stabilization Act of 2008 (H.R. 1424) into law. In addition to the financial security measures of this act, the Energy Improvement and Extension Act of 2008, which was attached to H.R. 1424, also provided several extensions and enhancements of critical tax credits and financing relating to renewable energy and energy efficiency.
•The act provides a one-year extension of the $0.02/kWh production tax credit (PTC) for wind energy, keeping the credit in effect through 2009.
•The bill also provides a two-year PTC extension, through 2010, for electricity produced from geothermal, biomass, and solar energy facilities, as well as trash-to-energy facilities, small hydropower facilities using irrigation water, capacity additions to existing hydropower plants, and hydropower facilities added to existing dams.
•The bill creates a new PTC for electricity produced by marine and hydrokinetic renewable energy systems (also called advanced water power systems) with a rated capacity of at least 150 kilowatts and placed in service by 2011.
•To help on the financing end, the bill authorizes $800 million in new Clean Renewable Energy Bonds for all of the above technologies.
While the PTC extensions and enhancements are good news for all major renewable energy sources, arguably the biggest winner in the tax bill is solar energy. The bill allows for an eight-year extension (through 2016) of the 30% tax credit for residential and commercial solar installations, as well as the elimination of the $2,000 tax credit cap for residential solar electric installations.
The Solar Energy Industries Association (SEIA) expects the creation of more than 440,000 jobs and the generation of at least $325 billion in private investment due to those changes, which should yield more than 28 gigawatts of solar power. There is also a measure that allows electric utilities to take advantage of these tax credits.
In addition, small wind power gained a 30% tax credit, up to $4,000 for wind turbines with capacities of 100 kilowatts or less, which is also good through 2016.
In terms of energy efficiency and alternative fuels, the act extends and revives a number of energy efficiency tax incentives for buildings, creates new tax credits for efficient vehicles, and extends and modifies tax credits for biofuels.
It extends energy efficiency tax deductions for commercial buildings through 2013 and revives similar deductions for home improvements installed in 2009.
It extends tax credits for builders of new energy-efficient homes through 2009 and increases tax credits for manufacturers of energy-efficient appliances, while extending that credit through 2010. Click here for the complete article.
President-elect Barack Obama is focusing his economic recovery strategy on making the biggest investment in the nation’s infrastructure since President Eisenhower created the interstate highway system, Bloomberg.com reported.
Speaking yesterday at a Chicago news conference and on NBC’s “Meet the Press,” Obama said state governors have many such projects that are “shovel ready,” meaning they could be undertaken swiftly and have an immediate impact on jobs.
He declined to specify a price tag for the stimulus, saying his advisers are “busy working, crunching the numbers, looking at the macroeconomic data to make a determination as to what the size and the scope of the economic recovery plan needs to be. But it is going to be substantial.”
Obama’s plans to invest in infrastructure led to gains in shares of construction and engineering companies that may benefit from the higher public spending and demand for products.
Dealing with the loss of jobs, frozen credit markets, falling home prices and other signs of economic turmoil is “my No. 1 priority,” Obama told NBC. Later at the Chicago news conference, he said “more aggressive steps” are needed to cope with the housing crisis.
Even with the prospect of a federal budget shortfall approaching $1 trillion, “we can’t worry, short term, about the deficit,” he said on NBC. “We’ve got to make sure that the economic stimulus plan is large enough to get the economy moving.”
Obama also said in Chicago that his economic team is working on plans to address the housing crisis, noting that he hasn’t seen the “kind of aggressive steps in the housing market to stem foreclosures” that he wants to see from President George W. Bush. Obama’s transition team has spoken with the outgoing administration about the situation, he said.
“If it is not done during the transition, it will be done by me,” Obama said.
He also indicated that proposals -- which could include updating health care administration and public schools -- would be reviewed as part of his broader plan.
To read the entire Bloomberg.com posting, click here.
The Associated Builders and Contractors (ABC) submitted comments to the U.S. Department of Labor (DOL) Wage and Hour Division Employment Standards Administration supporting a proposed rule that would revise regulations pertaining to the Davis-Bacon Act and the Copeland Anti-Kickback Act.
In an effort to better protect the privacy of workers on construction contracts, the proposed rule would eliminate the requirement that certain personal information about workers be transmitted to DOL each week.
The Davis-Bacon Act applies to many federal construction projects and requires contractors and subcontractors to pay construction workers no less than the prevailing wage and fringe benefits for similar projects. The Copeland Anti-Kickback Act requires contractors and subcontractors working on most federally financed construction contracts to furnish a weekly statement about wages paid to each worker. Under the proposed rule, workers’ Social Security numbers and home addresses would no longer be transmitted with wage information.
“The more entities outside the contractor’s workplace that receive the private employee information, the more likely that inadvertent disclosure will take place, such as through lax security arrangements, thefts or simply accidents,” ABC stated in its comments. “The proposed rule creates a uniform system that provides greater protection against inadvertent disclosure of private employee information.”
Construction contractors and subcontractors will still be required to maintain workers’ addresses and Social Security numbers and government agencies responsible for ensuring compliance with contract provisions will continue to be able to access that information if necessary for purposes of an audit or investigation.
“Maintaining the records and providing them to investigators has long been the primary method of enforcing the Davis-Bacon Act and will continue in force and effect under the NPRM,” ABC noted. “There is no reason to continue requiring contractors to expose their employees’ personal information outside the workplace and outside the context of an actual investigation.”
Bank of America CEO Ken Lewis,left, talks with Wachovia CEO Bob Steel during the Charlotte Chamber's Economic Outlook Conference.
The immediate future will continue to be rough, but the recession should shift to economic recovery sometime next year, the chief executives of three of Charlotte's largest employers and a top Federal Reserve Bank official were quoted in today's Charlotte Observer report.
The panel of business titans warned of short-term obstacles but shared long-term optimism at the Charlotte Chamber's seventh annual Economic Outlook Conference at Wednesday's conference.
Joining the three CEOs – Ken Lewis of Bank of America, Bob Steel of Wachovia and Jim Rogers of Duke Energy – was Jeffrey Lacker, president of the Fed district that includes the Carolinas.
While economic indicators have deteriorated this year, Lacker said he expected the U.S. economy “to regain positive momentum sometime in 2009.”
Lacker said his optimism for a 2009 upturn came from lower interest rates, lower energy and commodity prices, and a bottoming out of the housing market. Lacker noted, however, that he also predicted a next-year bottoming-out in housing the past two years.
“Although the current economy has “got all the unattractive signs,” Steel said the recession wasn't obvious in the first half of this year, when some industries continued to see gains.
Lewis said two financial policies have contributed to the banking crisis. Mark-to-market accounting rules require banks to value their assets based on a price they could immediately fetch, rather than their long-term value. That's resulted in absurd short-term valuations, Lewis said.
Lewis also said the government's Community Reinvestment Act shouldn't be blamed for the current crisis. The 1977 act requires banks to make loans and investments in underserved and low-income areas, but Lewis said “the great majority” of problem loans were outside CRA lending.
Subprime mortgages also have been derided during the meltdown, but Lacker and Steel warned against eliminating them altogether, saying such loans have been vital for people with challenged credit to own homes.
The view the complete Charlotte Observer article, click here.
UNC Charlotte economist to present economic forecast
Noted regional economist and UNC Charlotte professor John Connaughton will present his latest UNC Charlotte Economic Forecast for North Carolina at a luncheon conference Tuesday, Dec. 9 at noon. The event, which will take place in the Silverman Pavilion of the Mint Museum of Craft + Design (220 N. Tryon Street), is free and open to the public. RSVPs are requested to email@example.com.
This is Connaughton's first forecast report since the recent economic slowdown. While North Carolina has experienced seven years of economic growth, Connaughton will take recent events into account as he reviews strengths and weaknesses in the state economy.
Barack Obama and Joe Biden, right, listen to Pennsylvania Gov. Ed Rendell at the governors meeting in Philadelphia.
The Chicago Tribune reported president-elect Barack Obama reassured the nation's cash-strapped governors that he will include them in plans to steady the economy with investments they say they desperately need in infrastructure and jobs.
Obama meet with 49 of the nation's governors and governors-elect yesterday to discuss how the federal government can help them balance their budgets and provide basic services. NC governor Mike Easley and governor-elect Beverly Perdue were among those attending the historic meeting.
"This administration does not intend to delay in getting you the help that we need," Obama said. The president-elect has set a goal of saving or creating 2.5 million jobs to boost the economy.
North Carolina has already implemented a hiring freeze, delayed capital projects and cut programs in response to the economic crisis. The state is among a half dozen who have passed or proposed their own state stimulus packages. Governor Easley recently released $700 million in building projects as a way to stimulate North Carolina's economy.
TheNews & Observer reported incoming White House chief of staff Rahm Emanuel told reporters that in a private portion of the meeting, Obama and Republican and Democratic governors agreed that the economic package must focus heavily on money for infrastructure as well as bureaucratic reforms to make it easier to complete programs without having to cut through piles of red tape.
Obama pledged "action, and action now" to address the budget shortfalls expected in no less than 41 states this year or next. "As president, I will not simply ask our nation's governors to help implement our economic recovery plan," Obama said. "I will ask you to help design that plan. Because, if we're listening to our governors, we'll not only be doing what's right for our states, we'll be doing what's right for our country."
Governor-elect Perdue told the News & Observer that she was intrigued by Obama's definition of infrastructure spending, which would include not just roads and water and sewer projects, but also public schools, universities, broadband Internet access in rural areas and better medical technology. "He sees the social and infrastructure agenda as woven together," she said.
Governor Easley said his cross-party colleagues were skeptical at first but later were encouraged by a meeting they said bodes well for relations between the White House and state capitols nationwide.
"They needed to be sure this wasn't just a dog-and-pony show. They never had this kind of exchange with the current administration," Easley said. "The encouraging thing is that the President-elect was trying to find out what we need; he's asking us what we need."
"This is an unprecedented opportunity you're affording the nation's governors to have input on something that we believe is crucial to beginning the process of turning this country's economy around," Pennsylvania Gov. Ed Rendell told Obama.
Obama had requested the Philadelphia meeting with the governors, which Rendell arranged and put in the historic hall where Congress used to meet before Washington was the nation's capital.
Gov. Mike Easley is fast-tracking state construction projects in an effort to create jobs and stimulate North Carolina's economy
The I-85 bridge over the Yadkin River in Rowan County could be a beneficiary of an economic stimulus package being considered by Congress, N.C. House Speaker Joe Hackney was quoted yesterday.
The Charlotte Observer reported states are pressing Congress to pump new money into the economy and they think one of the best ways to do that is to fund about $136 billion in “ready to go” infrastructure projects such as roads, bridges and sewers that could be started within a few months.
States have compiled lists of projects they think would qualify for an infusion of federal funds, but only a fraction are likely to be funded, said Mark Foster, chief financial officer for the N.C. Department of Transportation.
A $400 million replacement for the Yadkin Bridge – dubbed by AAA Carolinas as the worst bridge in the state – is on the state's wish list of about 300 projects totaling $5 billion, Foster said.
Less likely to qualify for the stimulus dollars are unfinished portions of the I-485 outerbelt around Charlotte, because work couldn't be started as quickly there, though Hackney said he hoped that the outerbelt – and other projects that would generate jobs and improve safety – would get funding.
“States can move quickly to put this money on the ground,” Hackney said at a news conference with Govs. Ed Rendell of Pennsylvania and Jim Douglas of Vermont. “The infrastructure projects are important because it's such a win-win.”
The state officials were in Washington to ask House Speaker Nancy Pelosi, D-Calif., for quick action in stimulating the economy. Governors, including N.C. Gov. Mike Easley, planned to meet with President-elect Obama today in Philadelphia.
Obama and congressional leaders have said they're committed to a stimulus package, but its details and price tag haven't been worked out.
Pelosi said she hoped Congress would have a package ready when lawmakers return to session early next year.
State officials were quick to point out that they'd already taken steps at home before asking for help from Washington. In North Carolina, Governor Easley has ordered a 5 percent across-the-board cut. He also said he would fast-track more than $700 million in capital improvement projects to help stimulate the economy.
Hackney, president of the National Conference of State Legislatures, said it's uncertain what kind of shortfall North Carolina would face without assistance from the federal government, but he's heard estimates ranging from $800 million to $3 billion. Read the complete Charlotte Observer article here.
In an email message to members, American Subcontractors Association President William J. Olmo, III described the the federal government as the largest construction owner-developer in the world.
Olmo said, "With the right stimulus bill from Congress, it can contribute to a broader economic recovery," Olmo said.
"Don’t wait to participate in the process of fixing infrastructure problems and helping our economy. Ask your members of Congress and President-elect Obama to support an economic stimulus bill that contains a robust investment in our infrastructure."
The News & Observer reports new home permits in the Triangle have plummeted this year as construction loans have been virtually cut off in the face of a pipeline of unsold homes.
During the first nine months of the year, there were 7,171 permits issued for new townhouses, condominiums and single-family homes in Wake, Durham, Orange, Johnston, Franklin and Chatham counties. The nine-month total, the lowest in a decade, is down 42 percent from the same period a year ago, according to data from Market Opportunity Research Enterprises, a Rocky Mount company that tracks residential real estate in North Carolina.
The figures show how a national lending crisis is seeping into one of the Triangle's biggest industries -- and how this growing region, which has avoided the worst of the housing bust, is not immune to the fallout.
"The banks aren't loosening up their purse strings. And many of the contractors have razor-thin backlogs," said Dave Simpson, N.C. Building director for Carolinas AGC. "When you combine all the ingredients of that broth, it's just not a good stew."
Most lenders have since tightened standards for all kinds of loans. They are more closely scrutinizing borrowers' credit scores, income, employment and assets, such as savings and investments. Those who can qualify are often required to pay more equity into a home.
With more buyers sidelined, the number of unsold homes grew in October to a two-year-high. There were 19,308 homes listed for sale in the Triangle and surrounding counties, according to Triangle Multiple Listing Service data. That represents a 13.9-month supply -- almost twice the average over the past two years. As a result, builders have pulled back -- either out of caution or the inability to get financing.
There were 252,900 construction jobs across the state during September. That's 6,000 fewer than in March, according to seasonally adjusted federal labor data. The slowdown also is hurting industries that support building.
Georgia-Pacific, for instance, said this month that it is laying off 120 workers at a Roxboro plant that made wood beams used in residential construction And in October, Silver Line announced it was shutting its Durham window plant, laying off 428.
Fewer jobs and less construction also mean less tax revenue to counties and towns across the country -- a scenario that could lead to delayed public improvements and more job losses.
Wake County is facing a $17 million budget shortfall because of a projected decline in sales tax revenues and a drop in fees from new development and construction. Excise taxes, which are paid by property buyers, total $5.5 million since July 1, the start of Wake's fiscal year. That's 37 percent less than last year's total. It's the biggest drop Register of Deeds Laura Riddick has seen in her 12 years in office.
Click here to read complete New & Observer article.
North Carolina Construction News provides news updates and online resources in co-operation with Triangle/Triad Construction News and Charlotte Construction News. You can reach publisher Bob Kruhm by email firstname.lastname@example.org