Thursday, 31 December 2009

NC Economy 2010: Where will the jobs be?


By Dr. Michael Walden, NCSU Economist

The biggest single issue in today's economy is jobs - or specifically - the lack of jobs. And it's easy to understand why. Nationally, 7 million jobs have been lost since the recession began, and here in North Carolina the count is 250,000. Unemployment rates are in double digits for both the nation and our state.

Yet there is some good news. Although job losses are still occurring, the number has been getting smaller. Most economists now think the job market will turn around early in 2010, and job gains will become the norm.

But once new jobs begin to appear, other important questions arise. What industries and occupations will create the new jobs, and what kind of training will be required?

Fortunately we have some fresh answers to these questions. Every couple of years, the U.S. Department of Labor does a detailed analysis of job trends and gives projections for the next decade. Their latest report is hot off the press.

The forecasts show the national economy adding 15 million jobs over the next decade, roughly an 11 percent increase. North Carolina's share would be 400,000, although if North Carolina grows faster than the nation - as I expect it will - the number of new jobs in the state would be somewhat higher.

Labor Department economists think the leading industries in job growth will be construction, professional and business services, education and health care. Also adding jobs but at a slower than average rate will be wholesale and retail trade, transportation, information, financial services, entertainment and leisure activities and government. Manufacturing and utilities will cut jobs.

Of course, manufacturing is still an important industry in North Carolina. So what does the report say about leading North Carolina manufacturers? For three of our traditional manufacturing industries - tobacco, textiles and apparel - the outlook isn't good. Jobs will decline by 25 percent in tobacco, 40 percent in textiles and 50 percent in apparel. However, for the other North Carolina mainstay - furniture - employment is expected to increase modestly by 6 percent. This is in part because furniture production is forecast to jump by 50 percent over the course of the next decade.

The job outlook is mixed for North Carolina's newer manufacturing industries. Jobs are projected to increase in pharmaceuticals and technology, hold steady in food processing but drop in motor vehicle parts. This despite the fact that production is expected to rise in all four industries. The way a firm can increase production while reducing or keeping steady the number of jobs is to increase the productivity (output per hour) of the workforce. Companies are able to do this by matching workers with modern machinery and technology - something that has been a long-term trend in manufacturing.

Now, what about the outlook for jobs in terms of occupations; that is, what will workers actually be doing? The Labor Department expects a continuing shift away from occupations requiring brawn and muscles to occupations utilizing brains and reasoning. The fastest job growth will be in managerial, professional, service and construction occupations. Slower growth is expected for sales, administrative support, installation, maintenance, repair and transportation occupations. Job losses are forecast in farming and production occupations.

This means more jobs will require some kind of formal schooling beyond high school. Indeed, the future job market will roughly be divided into thirds. One-third of the new jobs will require a community college or university degree. Another third won't need a formal college diploma but will necessitate the worker undertaking extensive on-the-job training. The final third will use inexperienced workers and provide them only short-term on-the-job training. Of course, these jobs will pay the least.

Let me end with some specifics. The top 10 job positions generating the most openings in the next 10 years are expected to be registered nurses, home health aides, customer service reps, restaurant workers, retail salespersons, office clerks, accountants, nursing aides, college professors and construction workers.

Dr. Walden's full article can be found on LocalTechWire.com.

Editor’s note: Dr. Michael Walden is a William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University's College of Agriculture and Life Sciences.

Wednesday, 30 December 2009

Charlotte-Mecklenburg Schools hope to use interest-free loans for construction projects

Charlotte-Mecklenburg Schools (CMS) leaders hope no-interest school construction loans from federal stimulus money could help build two new schools and renovate or expand four others.

The Charlotte Observer reports CMS wants to sell $52 million of the special bonds this summer. No-interest loans could save Mecklenburg taxpayers $12 million to $15 million in the long run.

But uncertainties about the federal plan remain. Nearly a year after the school construction bonds were approved as part of the federal stimulus package, few school districts in the state or across the country have found institutional investors willing to buy them.

That has left largely unfulfilled the promise of new schools, additions and land purchases, and the thousands of jobs that were supposed to be created by the construction work.

"I'm disappointed," said Steve Taynton, section chief for school planning at the state Department of Public Instruction. "It could do a lot of good if we could get the money out there."

A new kind of school construction bond created in the stimulus package allows lenders to claim tax credits rather than earn interest. The plan was that borrowers were supposed to pay only the principal.

But officials said it has been tough to find banks interested in tax credits that won't do them much good when they're suffering losses.

North Carolina has a $275 million allotment of the school construction bonds for 2009. Five big school districts, including Wake and CMS, had amounts within that pool earmarked for them. CMS was allowed $26 million in construction bonds and Wake $17.3million.

But Mecklenburg County commissioners called a halt to borrowing for new projects this year, citing a need to bring debt payments in line with shrinking revenue. CMS got state permission to roll the 2009 bonds over into 2010, when the plan makes another $26 million available, said Associate Superintendent Guy Chamberlain.

CMS has asked the county to issue $72 million in bonds this summer - ideally, $52 million in interest-free bonds and another $20 million in the normal bonds that require interest payments. That would pay for new elementary schools in northern and southwestern Mecklenburg, relieving crowding at Lake Wylie and Torrence Creek. It would also pay to replace the buildings at McClintock Middle and Pineville Elementary, renovate and expand Ranson Middle and expand Vance High.

County commissioners haven't yet voted on how much they'll let CMS borrow this year, said county Finance Director Dena Diorio. A staff plan calls for issuing up to $150 million in bonds in 2010, but that must cover not just CMS but Central Piedmont Community College, parks, libraries and other county needs.

Potential school-bond investors who might forgo interest payments in exchange for the tax credit are awaiting details from the U.S. Treasury Department that will clarify whether that move would be beneficial for them, she said.

If CMS gets to borrow $52 million without paying interest, that would save up to $15 million over the 12- to 15-year payoff period, Diorio said.

Wake is pursuing a similar plan, asking the state for an extension so it can issue nearly $35 million in bonds under the program in 2010, said Johnna Rogers, the county's deputy manager.

"For us, it's more efficient to do one big bond sale," Rogers said.

Some counties, including Durham, didn't even try for any of the bonds this year. Among those counties that did, only seven received approval to borrow by the Local Government Commission in the state treasurer's office.

U.S. Rep. Bob Etheridge, a longtime champion of having the federal government help with school construction, recently supported an attempt to get around the problem of offering tax credits banks don't want. Under the change, state or local governments could choose to receive a direct payment from the federal government equal to the value of the tax credit. The payment would lower the local governments' borrowing costs. The provision was included in a bill the U.S. House passed this month. It awaits action in the Senate.

According to Etheridge's office, only $1.7 billion of the $11 billion in school construction bonds available nationwide has been used.

"Companies aren't making enough to use the credits," said Etheridge.

The stimulus law allows allocations that local governments don't use this year to be returned to the states for redistribution, along with another $11 billion available next year.

With the change, local governments should be able to borrow nearly $22 billion for school construction and renovations next year, Etheridge said.

"We need to get them out and moving," he said of the bonds.

Click Here to view the Charlotte Observer article.

Tuesday, 29 December 2009

Federal two-bid requirement costlier and confusing

President Obama's plan to force contractors to hire union workers for large government construction projects is proving easier said than done, confusing and costlier than expected, the Washington Times reports.

It's been more than a decade since a federal project required bids that include union representation of workers, known as a "project labor agreement" or PLA. A 100 million project to modernize the 12-story Lafayette Building that houses federal agencies is highlighting the kinks that need to be worked out.

The General Services Administration (GSA), for example, first called for PLAs to win bids to rehabilitate the Washington office complex, but earlier this month backtracked, saying the solicitation was in error and it would instead ask contractors to submit two bids, one with a PLA and one without - a highly unusual and costly requirement.

"It's crazy to try to do that. ... It is just pure confusion on their part," said Brett McMahon, vice president of business development for Miller & Long Co. Inc., the country's largest concrete subcontractor and the largest employer of construction workers in the Mid-Atlantic region.

He estimated that a general contractor would spend more than $100,000 putting together a single bid for a job of that size and submitting dual bids would increase the cost by about $75,000.

GSA officials said the dual bids were part of its effort to comply with Mr. Obama's order to use PLAs and a way for the agency to gauge the cost of using PLAs. The Lafayette Building modernization is one of 10 pilot projects with solicitations for bids under way that require the dual pricing, officials said.

"As part of our ongoing outreach, GSA has received feedback from bidders that this process has not caused a significant increase in workload or cost in preparing a proposal," the GSA said in a written statement issued in response to questions by The Washington Times.

The scope of the contract to rehabilitate the Lafayette Building, which houses agencies including the Department of Veterans Affairs and the Export-Import Bank, includes a total refurbishment of the facade and windows, replacement of interior finishes, preservation of historic features and upgrade of all building systems, including physical building security. The project also will include building amenity spaces such as a health care unit, wellness center and concession area.

A PLA incorporates collective-bargaining agreements into the contract, requiring construction companies to agree to recognize union representation of the workers, hire some workers from union halls, follow union work rules and contribute to union pensions.

Critics say it drives up costs, delays projects and forces most construction workers - the vast majority of whom are not union members - to pay union dues and pension contributions for which they likely will never receive benefits.


View the article at Washington Times .

Monday, 28 December 2009

NC jobs may be on the rebound


Dr. Michael Walden, N.C. State University Economist

North Carolina is expected to gain jobs in 2010, the first year of projected job growth since the recession wiped out more than 250,000 jobs from the state's economy.

The Charlotte Observer reports more than 2,000 new jobs have already been announced in Charlotte and the Triangle, spanning finance, banking, technology, health care and even some manufacturing - sectors that reflect the traditional economic powerhouses of the state.

The hiring plans represent only a fraction of the new jobs expected. Economists predict that the state could generate as many as 45,000 new jobs next year. Many businesses have little choice but to rebuild staffs; they are running lean operations that can't handle more demand. "They will not be able to produce more with the jobs they have," said economist Mike Walden of N.C. State University.

About $9 billion in federal stimulus funds are designated for North Carolina and is expected to translate into 105,000 jobs over three years. Stimulus funds will create jobs in energy efficiency programs, building design upgrades, drinking water system improvements, public safety and transportation infrastructure.

Temporary hiring, often one of the early signs of economic resurgence, is recovering. This month, the national staffing firm Manpower projected an uptick in hiring in the first three months of 2010 by companies in Raleigh and Charlotte. It's the first hiring increase Manpower has predicted in three years. The greatest hiring would be by companies in information technology, hospitality and the manufacturing of nondurable goods such as food and fabric.

In addition, the federal government will inject some short-term adrenaline into the state's anemic economy and provide temporary employment for tens of thousands of people.

All that hiring won't make up for the jobs lost in 2009. Nor is it expected to push the state's unemployment rate below 10 percent. For that to happen, more small businesses will need to expand.

A major factor impeding economic growth at this point is that banks are still skittish about loaning money to small businesses because they are unwilling to risk losses in a weak economy. President Barack Obama recently chastised the banking industry for hoarding money.

Still, the recent spate of job announcements by high-profile corporations suggests that the economy is slowly reviving.

Electrolux AB plans to hire more than 700 people over five years for its new North American headquarters in Charlotte. Last week, Zenta, which provides outsourcing services to lenders, announced it will add 1,002 Charlotte jobs over the next five years.

And Maiden, about 40 miles northwest of Charlotte, will be home to a $1 billion Apple computer data center that will employ 50 people but is expected to create hundreds of indirect jobs.

Click Here to view the Charlotte Observer article.

Friday, 25 December 2009

Christmas 2009


How will you remember 2009?

For some, it has been a year of genuine turmoil and struggle, as formerly thriving businesses faced painful retrenchments and struggled to survive.

Some readers lost their jobs, some their businesses.

We had our own share of challenges, as rosy economic projections last October gave way to a business crisis that tore into our business plan until we were able to bring things under control in the summer.

Within the gloom and pain, however, we discovered some bright beacons for the future.

We discovered how timeless business principals distilled by our consultant Bill Caswell of Caswell Corporate Coaching Company could help our (and your) business both weather the storm and restore its capacity to thrive. Bill is leading a special seminar on Feb. 12: "Taking your Construction Business to the Next Level" which will help readers of this blog move forward and overcome your business challenges.

Most importantly, we realized how important traditional values and relationships are in the electronic age. Architectural, engineering and construction businesses thrive by delivering top quality services -- built on relationships founded in respect and integrity.

Best wishes for the Holiday Season and Happy New Year!


Mark Buckshon
President
Construction News and Report Group of Companies

Robert Kruhm
Publisher
North Carolina Construction News

Thursday, 24 December 2009

Senate action excludes small construction firms from health care exemptions


False claims of broad support prompted the U.S Senate to exclude small construction firms from health care exemptions. According to an analysis by the Associated General Contractors (AGC) the measure's supporters represent less than 4 percent of U.S. onstruction employers and 16 percent of U.S. construction workers.

Organizations supporting changes to the Senate health care legislation excluding small construction contractors from the small business exception represent a tiny minority of construction firms and workers, AGC reports. Their analysis contradicts claims by Senate staffers that the late-night measure has been endorsed by 64 percent of the industry.

“This measure is a real insult to hard working contractors and their employees, especially since the rationale for including the language is quickly crumbling,” said Stephen Sandherr, the chief executive officer of AGC. “If Senators are willing to sell out the construction industry so easily, anyone could be next.”

The measure singling out small construction firms was backed by an umbrella organization called the Campaign for Quality Construction. The five groups that belong to the Campaign claim to represent 27,000 contractors, or 3.3 percent of the nation’s 811,452 construction firms. Construction and related unions supporting this measure, meanwhile, represent only 15.6 percent of the nation’s 5,960,000 construction workers.

Those relatively low figures contradict claims made by Senate staffers following the late night decision to single out small construction firms that the measure had the backing of almost two-thirds of the construction industry.

“Our members overwhelmingly oppose the Senate’s decision to single out small firms for extra fees and fines,” Sandherr said, noting that AGC members have already sent over 3,000 letters to Congress criticizing the measure. “Sixty senators are going to have a lot of explaining to do to with local employers when they go home for the holidays.”

Click Here to view the AGC statement.

Tuesday, 22 December 2009

Heavy construction spending steady during recession and early recovery


Heavy construction market drivers are balanced between positive and negative. This is consistent with spending trends which have been flat for over a year, except for a brief dip early in the recession. Little change is expected through 2011 says Reed/ACP Construction Data.

Reed reports the positive impact of federal stimulus spending and environmentally mandated energy facility spending is approximately offsetting the negative impact of depressed state and local budget balances and much reduced private spending to add facility capacity.

The impact of the initial federal “shovel ready” construction stimulus program is now ebbing. Those funds will be replaced in 2010-11 by delayed spending on transit and power grid projects as well as a likely second stimulus plan finalized early next year.

Click Here to view Reed Construction Data's Key Indicators of the U.S. Market Environment for Heavy/Engineering Construction.

Monday, 21 December 2009

N.C. jobless rate dips to 10.8% but picture mixed


Dr. Michael Walden, N.C. State University Economist

The jobless rate in North Carolina dipped again slightly in November to 10.8 percent, the state Employment Security Commission (ESC) reported. Employment in the state grew by 12,453 people while unemployment dropped by 6,823, based on a survey of households, according to a posting on WRAL.com.

The state employment commission also noted that initial claims for unemployment benefits jumped by 14 percent, or more than 10,500, in November to 88,938 from October.

Of the new claims, some 53 percent were “attached,” which implies the companies laying off those workers expect to rehire them.

Dr. Michael Walden, an economist at N.C. State University, described the state’s jobs picture as “mixed” and stood by his longstanding belief that an improvement in hiring is still months away.

“The news is still mixed in the job market, which is the usual case before we get a shift in the trend,” he told WRAL.com. “My forecast is still that jobs won't consistently return to NC until the first quarter of 2010. Also, when that occurs, don't be surprised if the unemployment rises as ‘discouraged workers’ begin looking for work again.”

Discouraged workers include people who have lost their jobs or are new or returning to the work force and have given up on finding a position.

Walden reviewed week-by-week initial claims and pointed out that during the week of Dec. 5 those claims “took a jump.” However, he also pointed out that the “multiple week average is still declining.”

Contrary to the statewide household survey which showed an increase in employment, Walden also pointed out that a separate survey of employers showed a decline in jobs of more than 8,000 to 3,920,000.

These figures, which are seasonally adjusted to reflect seasons and weather among other factors, are “more telling” about the actual job climate, according to a spokesperson for the ESC.

“Today's household unemployment report for NC showed job gains and a slight drop in the unemployment rate,” Walden noted. “However, the employer survey showed a decline in jobs in North Carolina for November.”

State Employment Security Commission Chairman Moses Carey Jr. stressed that more jobs are needed.

“Even though employment increased slightly over the month, we still need more job growth,” Carey said in a statement. “It’s another month where we haven’t experienced much change.

The unemployment rate a year ago stood at 7.5 percent.

Nationally, the jobless rate slipped slightly in November to 10 percent.

North Carolina did add 1,900 education and health services and 800 construction jobs last month but lost some 4,800 jobs in leisure and hospitality and another 3,900 in manufacturing.

The average hourly wage fell 13 cents to $15.78 in November, but the average number of hours worked grew to 39.5 from 39.1 the previous month.

Click Here to view the WRAL.com posting.

Friday, 18 December 2009

November construction starts higher


Reed Construction Data (RCD) announced that the year-to-date value of construction starts through November 2009, excluding residential contracts, totaled $247.1 billion, 6.1% less than in the same period in 2008.

November starts were 7.0% higher than in October so the November total was a 20% increase after seasonal adjustment. November 2009 starts were about 8% higher than last November. Last month’s starts were double the depressed June total and the highest monthly figure in two years, except for the seasonally high totals reported for August in the last two years.

The value of construction starts each month is summarized from RCD’s database of all active construction projects in the United States, excluding single-family homes. Missing project values are estimated using RSMeans’ building cost models.

November starts increased 16% for non-residential buildings, but fell 6% for heavy construction projects. Nonetheless, the heavy market is much stronger with a year-to-date gain of 15% versus a year-to-date decline of 16% for non-residential buildings.

Although commercial project starts increased 32% in November versus October, this continues to be the weakest market with a further small decline in construction activity projected through mid-2010 before an accelerating recovery begins. Current starts are well below the pre-credit-freeze level, especially for offices, hotels and retail projects. Starts for institutional building projects increased 13% in November from October. This market is near its peak in this cycle, although no significant decline is expected. Collapsing state and local government revenues are increasingly causing project deferments.

Although heavy project starts fell 6% in November, this remains the strongest market. Job-site construction spending has stalled, but no significant decline is expected. Stimulus funds are approximately offsetting declines in other sources of project funding. Additional stimulus funding is being considered in Washington but is not in the forecast. Heavy construction spending is expected to remain about steady in nominal dollars through 2011 — a small decline after inflation adjustment. By contrast, other construction sectors will be progressively expanding.


Click Here to view the Reed Construction Data.

Thursday, 17 December 2009

U.S. architecture billings index falls in November


A leading indicator of U.S. nonresidential construction spending fell in November, erasing gains in the prior month, as continued tight credit pressures demand for design services, according to the American Institute of Architects (AIA).

The Architecture Billings Index was down 3.3 points at 42.8 last month, the lowest level since August, according to the architects' trade group.

Reuters reports the index has remained below 50, indicating contraction in demand for design services, since January 2008. Its lowest recent reading was 33.3 in January.

"Design activity is not heading back into a recovery phase with any rapidity," said AIA Chief Economist Kermit Baker.

Typically, as recession ends and jobs pick up, employers begin to add facilities or rehabilitate existing ones, Baker said. But the process can take years -- after the 2001 recession, billings did not recover until 2004 -- and the current downturn was much more severe than the previous one.

"It took a long time for jobs to come back and therefore a long time for nonresidential construction to come back, too. It was close to three years before we saw significant numbers."

Tight credit remains a big factor limiting demand for construction or renovation projects.

A measure of inquiries for new projects held steady at 58.5. This measure has been higher than the billings index for several months, partly reflecting increased competition among architecture firms for the same projects.

All four U.S. construction sectors and all four geographic regions stayed below 50 in November. The institutional market, which includes government buildings, hospitals and schools, may be headed for recovery sooner than other sectors, partly reflecting stimulus funding, the AIA said.

Nonresidential construction includes commercial and industrial facilities such as hotels and office buildings, as well as schools, hospitals and other institutions. The AIA's Billings Index, which began in 1995, is considered a measure of construction spending nine to 12 months in the future.

Click Here to view the Reuters article.

Wednesday, 16 December 2009

Price of construction materials rises in November


The price of construction materials and supplies rose 0.6 percent in November, the first increase in two months, according to the producer price index (PPI) report by the U.S. Labor Department. However, the overall price of construction materials remains 2.3 percent below levels from one year ago.

Associated Builders & Contractors chief economist Anirban Basu reports nonferrous wire and cable prices were up 1.6 percent last month and are up 12.4 percent from a year ago. Prices of fabricated ferrous wire products are down 12.5 percent on a year-over-year basis. Prices for fabricated structural metal products fell 0.4 percent in November and are down 8.8 percent over the past twelve months.

Softwood lumber prices increased by 1.9 percent last month, but are still down 1.6 percent on an annual basis. Prices of plumbing fixtures and fittings were unchanged last month and are just 0.5 percent higher than they were in November 2008. Prices of asphalt felts and coatings fell 2.5 percent last month and are down 7.4 percent from a year ago.

The jump in energy prices drove the wholesale level higher. The price of natural gas went up 25.5 percent last month, though that price is still 16.3 percent lower on a year-over-year basis. Gasoline prices shot up 14.2 percent last month and are 35.9 higher compared to the same month one year ago. Crude energy prices went up by 12.2 percent in November and are up 8.4 percent from November 2008.

Overall, the nation’s wholesale prices rose 1.8 percent on a monthly basis and are up 2.4 percent on a year-over-year basis.

What This Means

“Increasingly, the producer price index for construction industries has come to reflect the growing economic recovery that has been in place since late summer 2009,” said ABC economist Anirban Basu. “Prices are now rising in general, a reflection of higher asset prices across the world, as well as the demand for materials in stimulus-impacted construction segments in the U.S. and in other nations, including China, India and Brazil.

“To date, increases in construction materials prices have been benign and have not created the chaos in bidding that occurred earlier in the decade when prices were far more volatile, making it difficult to establish firm bids for lengthy construction projects,” said Basu. “However, many industry stakeholders had been hoping that construction materials prices would continue to decline on a monthly basis. That did not occur in November.

“Lower prices would induce more construction projects to move forward, thereby accelerating the recovery of the nonresidential construction sector. Unfortunately, rising materials prices are likely to delay the segment’s ultimate recovery,” predicts Basu.


Click Here to view the ABC Construction Economics Update.

Tuesday, 15 December 2009

An interview with AGC President J. Doug Pruitt


J. Doug Pruitt is the 2009 president of the Associated General Contractors. Here's what he says lies ahead.

1. What do you believe will be some of the significant challenges for AGC and your profession in 2010 -- and why?

Our challenges next year will be similar to this year. Contractors are still struggling to stay in business while they wait for the market to turn around and look for increased infrastructure funding. AGC will continue to push for a Water Trust Fund, increased funding for highway and transit, and passage of the many bills called for in AGC's Blueprint for Economic Growth to spur private construction as well.

2. What particular issues do you see AGC focusing on in 2010, and why are these the top concerns?

Our top priority will be to continue to advocate for measures to stimulate new private- and public-sector demand for construction services. So we will continue to call for action on our Blueprint for Economic Growth, ensure that stimulus funds flow in an efficient, timely and effective manner and look for opportunities to advocate for greater investments in our nation's infrastructure.

As important, we're going to keep pushing for reforms to our educational system so we can do a better job as a nation in preparing a future work force that can thrive in careers like construction. That's why we've teamed up with Industry Cares to draw attention to a failing K-12 system and the high social and financial costs that result from the significant dropout rate in this country.

In addition, AGC will continue to focus on professional development and green construction education, to be sure that we are ready when construction is on an upswing again. As always, AGC will offer a wide range of safety resources to keep our workers out of harm's way, while also pushing commonsense initiatives to improve construction performance, such as funding to reduce emissions from construction equipment to collaborative approaches to safety with the government.

Monday, 14 December 2009

Workers may get chance to check their own immigration work status


The Washington Times reports U.S. immigration authorities are planning to add a self-check system so workers can pre-screen themselves with E-Verify, the controversial electronic database used on a voluntary basis by some employers to screen their employees.

The move would try to bridge the gap between the two sides in the immigration debate by putting power in the hands of workers, who could make sure of their status before applying for new jobs.

Alejandro Mayorkas, director of U.S. Citizenship and Immigration Services, said the move is in the works, though he said it's too early to provide details.

"We are developing it with the goal of employees being able to self-check," he said.

Mayorkas also said definitively his agency "will be ready" to implement any immigrant-legalization program Congress might pass, though he would not give any specifics and said a lot depends on what the new law would look like. He also said it might take more funding from Congress to get the agency ready.


Mayorkas said the the E-Verify program remains a strong tool to help make sure jobs go to citizens and legal immigrants.

"It protects employees from exploitive employers. It enables employers to ensure the lawfulness of their work force, and therefore comply with the law," he said.

E-Verify began in the 1990s as a voluntary pilot program to allow employers to check new hires' Social Security numbers to see if they were eligible to work.

More than 170,000 employers are signed up to use the Web-based system. Some states have made its use mandatory for all businesses, and others have required state contractors to use it. The federal government this year began requiring contractors to check both new hires and all employees who are working on federal contracts.

Nearly 97 percent of all workers are approved automatically, while the rest are allowed to contest a non-confirmation. Only three-tenths of a percent of those checked successfully contest a non-confirmation.

The self-check system would cut down on the need for those instances. One concern is that employers might run employees through the database before making a final job offer, and some workers who are erroneously flagged as not authorized could be denied jobs unfairly.

Click Here to view the complete Washington Times article.

Friday, 11 December 2009

Tar Heel economy has begun turnaround


The N.C. economy has begun its long, slow turnaround, but it could take years before job and spending figures bounce back to the levels of better times, UNC Charlotte economist John Connaughton's predicts.

The Charlotte Observer summarized Connaughton's quarterly economic report released yesterday at UNC Charlotte uptown. He predicted that next year, the state's economy will grow 2.8 percent, following this year's 3.6 percent decline.

"After about six of these (quarterly reports) in a row ... we now have some good things to talk about," Connaughton said.

North Carolina lost about 124,000 jobs in 2009 due to major cuts in the construction, mining and finance sectors, he said. The state's unemployment rate has climbed to 11 percent, higher than the national average and up from 9.7 percent as the year began.

Connaughton said the recession technically ended in early summer - around the time economists began seeing positive signs, such as an uptick in consumer spending - but that there's a lag between the end of a recession and the time when the unemployment situation begins to turn around.

"What's really encouraging here," he said, "is that we've reached that point."

N.C. businesses are expected to add nearly 33,000 jobs next year, with growth in more than half of the state's economic sectors - including finance and real estate, which took massive hits in the recession, Connaughton said. He expects the construction, services and government fields to post the biggest gains in 2010.

There are other positive signs, such as steady home sales, he said. Yet the recovery won't be rapid.

Connaughton said he's most worried about banks' excess reserves, which have jumped from about $1.5 billion to more than $800 billion during the recession. That means banks aren't lending as much as they could be, either because they're concerned about a second economic dip or continued uncertainty in the financial markets, he said.

As a result, it will be more difficult for consumers to spend, especially on big-ticket items.

Overall consumer confidence will also slow the recovery, Connaughton said. It remains dangerously low, largely because the job market hasn't yet bounced back.

"People are still very uncomfortable," he said, "and as long as people are uncomfortable, this will be a drag on the economy."

Connaughton expects the N.C. unemployment rate to remain in double digits through 2010, ending the year around 10.5 percent, he said. He said it could take three or four years for the rate to drop to 7 percent.

Even then, there are countless others who will remain underemployed or who have given up the job search until better economic times, Connaughton said.

Some sectors will continue to lose jobs next year, such as manufacturing. Those manufacturing jobs won't likely return, even after the economy has recovered, he said.

But next year will bring more hope than 2009, perhaps even sooner than many economists expected, Connaughton said.

"The recession is over, and the really positive news is we've started to see a change in the unemployment side," he said. "Things will get better each quarter in 2010."

Click Here to view the Charlotte Observer article.

Thursday, 10 December 2009

More jobs on the horizon


The News & Observer reports employers in the Triangle expect to resume modest hiring in the early months of 2010.

According to a quarterly Manpower survey, from January to March, 13 percent of the Raleigh and Cary companies the staffing firm interviewed planned to hire more employees, while 9 percent expect to reduce their payrolls. That's a slight improvement from the previous quarter and a year earlier.

The figures mirror what Manpower found nationally, with about 12 percent of 28,000 employers expecting to increase their staffing levels during the first quarter, and 12 percent planning to cut more jobs.

A big problem is that there have been so many jobs lost and so many people are looking for work that it will take years to get back to full employment, said Jonas Prising, president of Manpower in North America. Few employers are rushing to hire, preferring to wait until there are further signs that the recovery will stick.

"The [unemployment] numbers are staggering," said Prising, who spoke with News & Observer reporters and editors. "It's going to take a long time to get back to where we were."

There were 6.3 unemployed people, on average, for each job opening in October, the Labor Department reported Tuesday, according to The Associated Press. That's up from 6.1 in September and 1.7 in December 2007, when the recession began. The number of jobless people rose to 15.7 million in October, up from 15 million.

Still, for the first time in six or seven months, Manpower is seeing some stabilization in the labor market, Prising said.

That includes a slight uptick in demand from Triangle employers seeking temporary help, said Jeff Stocks, president of Manpower's Raleigh office.

Information technology and biotech are sectors where momentum is building, Stocks said.

That's a good sign at the end of 2009, "one of the slowest years we've seen in quite some time."

Temporary hiring is one indicator that economists think foreshadows a broader economic recovery. Employers uncertain about the future often tap temp workers first and add permanent jobs as the outlook becomes clearer.

Midsize and smaller clients, in particular, are slowly adding temp and permanent staff, said Michael Doyle, who oversees Manpower offices in six Southeastern states and the District of Columbia.

In its survey of Durham employers, Manpower found that 12 percent of the companies interviewed plan to hire more employees, while 11percent expect to reduce their payrolls.

The Triangle jobless rate remained flat at 8.9 percent in October after adjusting for seasonal effects. That's lower than the state and national averages.

Click here to view the News & Observer article.

Wednesday, 9 December 2009

President Obama focuses on small businesses to spur job growth


President Obama proposed yesterday new spending on the nation’s infrastructure, tax credits for small businesses to spur hiring and incentives to make homes more energy efficient in a plan to cut the jobless rate.

Bloomberg.com reports Obama also called for “mobilizing” remaining money in the financial-system bailout fund to open up more credit to small businesses.

Most of the details would be left to Congress. House Majority Leader Steny Hoyer, a Maryland Democrat, said lawmakers may seek to finance $75 billion to $150 billion in highway construction and other job-creating measures with unused TARP funds. “It makes sense to use some of those resources that were try to stabilize Wall Street to now trying to invest them in growing Main Street,” Hoyer told reporters at the Capitol.

In a speech at the Brookings Institution, a research organization in Washington, the President said new spending would be at least partly offset by savings in the Troubled Asset Relief Program, which the Treasury has said would cost $200 billion less than originally projected.

“Given the challenge of accelerating the pace of hiring in the private sector, these targeted initiatives are right and they are needed,” Obama said. “But with a fiscal crisis to match our economic crisis, we also must be prudent about how we fund it.”

The Fed forecasts the jobless rate will range from 9.3 percent to 9.7 percent in the fourth quarter of 2010. The unemployment rate last month was 10 percent, down from a 26-year high of 10.2 percent in October.

Obama focused his remarks on steps to help small businesses, which he said create 65 percent of new jobs. Among them is a proposal to eliminate the capital gains tax on small businesses investments for a year. Two other measures, enhanced expense allowances and an accelerated depreciation tax incentive, are extensions of provisions in the stimulus legislation passed earlier this year. The president also proposes to eliminate fees and increase loan guarantees for Small Business Administration programs.

Obama has invited executives of some of the nation’s biggest banks to the White House Dec. 14 to talk about ways to increase lending to small businesses, Valerie Jarrett, a senior adviser to the president, said in an interview after the speech.

The president wants “to talk to them about what we can do together to increase lending, particularly to small businesses, where they have been feeling the crunch,” Jarrett said. Big banks got “a lot of assistance” from the government, she said.

As another way to create jobs, Obama said he’s asking Congress to “provide incentives for consumers who retrofit their homes to become more energy efficient.”
That program, which has become known as “cash for caulkers,” is designed to spark more construction hiring and would benefit residential contractors and home-improvement retailers such as Home Depot and Lowe’s Cos., based in Mooresville.

The administration also wants to boost funding to repair and modernize the nation’s transportation and communications networks. White House officials who briefed reporters estimated an additional $50 billion would be sought for those projects, following on $48 billion put toward transportation in the stimulus legislation.

House Majority Leader Steny Hoyer, a Maryland Democrat, said lawmakers may seek to finance $75 billion to $150 billion in highway construction and other job-creating measures with unused TARP funds. “It makes sense to use some of those resources that were try to stabilize Wall Street to now trying to invest them in growing Main Street,” Hoyer told reporters at the Capitol.

Obama also said more jobs would be created as more money from the $787 billion stimulus measure is doled out. Of that amount, about 30 percent, or $238 billion, had been spent so far, according to the White House. “We’re going to see even more work, and workers, on recovery projects in the next six months than we saw in the last six months,” Obama added.

To read the complete Bloomberg.com article, click Here.

Tuesday, 8 December 2009

No escape from TARP for U.S. banks choking on real estate loans


As the U.S. economy pulls out of a recession and the biggest banks return to profitability, mounting defaults on commercial property may keep regional lenders from repaying bailout funds until at least 2011, Bloomberg.com reports.

Unpaid loans on malls, hotels, apartments and home developments stood at a 16-year high of 3.4 percent in the third quarter and may reach 5.3 percent in two years, according to Real Estate Econometrics LLC, a property research firm in New York. That’s a bigger threat to regional banks, which are almost four times more concentrated in commercial property loans than the nation’s biggest lenders, according to data compiled by Bloomberg on bailout recipients.

The concentration makes regulators less likely to let regional lenders like Synovus Financial Corp. and Zions Bancorporation leave the Troubled Asset Relief Program, analysts said. Smaller banks would remain stuck in TARP, while bigger lenders, including Bank of America Corp., repay the government and free themselves to set their own policies on executive pay.

“Community and regional banks basically became real estate banks in the past 25 years, and now real estate is on its back,” said Jeff Davis, an analyst at FTN Equity Capital Markets Corp. in Nashville, Tennessee. “The largest banks have other areas where they can make money, be it consumer lending, capital markets and asset management.”

The stakes for taxpayers include whether they’ll get back $36.6 billion held by 35 of the largest regional lenders that received TARP money. Souring commercial real estate loans pose the biggest threat to the U.S. banking industry, according to October testimony to Congress by Sheila Bair, chairman of the Federal Deposit Insurance Corp., and Comptroller of the Currency John Dugan.

Regulators have shut 130 banks this year, all regional or community lenders, costing the FDIC more than $33 billion. Non- performing commercial property loans caused a majority of the failures, said Chip MacDonald, a partner specializing in financial services at law firm Jones Day.

“Somebody that has a lot of CRE exposure is going to be held to a higher standard” to redeem TARP preferred shares, said Paul Miller, a former bank examiner and now an analyst with FBR Capital Markets in Arlington, Virginia. “You’ve got to be careful they don’t allow these guys to pay back TARP, and then a year goes by and have to give it back to them.”

Commercial real estate loans “absolutely could be a factor” in whether regional banks can repay TARP funds, Bair said in an interview on Dec. 4.

Among 35 of the biggest regional lenders that retain TARP funds, commercial real estate and construction loans average 37 percent of total loans, compared with 9.5 percent at Citigroup Inc. and Wells Fargo & Co., the two biggest U.S. banks that haven’t announced plans to repay the government, according to data compiled by Bloomberg. The figures were derived from holdings at regional lenders that still have bailout money whose stocks are listed in either the 24-company KBW Bank Index or the 50-company KBW Regional Bank Index.

Of the 35 firms, 25 hold commercial real estate and construction loans equal to 30 percent or more of their total loans, according to FDIC data; seven have more than half of their loans in commercial property.

“To pay back TARP, they need to return to profitability, and for them to return to profitability, credit problems have to start to decline,” said Gerard Cassidy, a banking analyst at RBC Capital Markets in Portland, Maine.

Losses may hamper efforts of regional lenders to compete with bigger banks, such as Bank of America, ranked first by assets and deposits. The Charlotte, North Carolina-based lender, aided by profits from brokerage services and underwriting securities at its Merrill Lynch unit, announced last week that it would pay back the $45 billion it took from the government.

If Bank of America and Wells Fargo join JPMorgan Chase & Co. in redeeming TARP preferred shares, they’ll be free to press their advantage in markets they already dominate and to declare dividends and stock repurchases without seeking government approval. Bank of America and Wells Fargo finance about half of all U.S. home loans, and the four biggest banks -- Bank of America, JPMorgan, Citigroup and Wells Fargo -- account for more than a third of all U.S. deposits.

The worst may still be ahead for regional banks, according to Moody’s, which calculated that the non-performing loan ratio for commercial mortgages is higher than for residential ones.

“The commercial real estate problem is looming, and a bit like the rat going through the snake,” said William Bartmann, CEO of Bartmann Enterprises in Tulsa, Oklahoma, and former chairman of Commercial Financial Services, which was among the first companies to purchase assets from regulators during the savings and loan crisis. “We can see that it’s coming, it just hasn’t shown up yet.”

Click Here to view the complete article.

Monday, 7 December 2009

Easier way to help create jobs

Guest editorial by David D. Menzies

Gov. Bev Perdue recently made headlines creating an innovation council stocked with well-known representatives from our state's scientific, academic, government and entrepreneurial sectors. The council's goals revolve around growing our economy through investments in innovative businesses, creating jobs by moving new products more quickly from inception to the marketplace.

Although the intentions behind this publicity effort are to be commended, one cannot help but wonder if it is just another layer of icing atop a job creation cake rich with private and public sector groups and organizations who are already collaborating in many circles officially and unofficially to achieve the same goals as the governor's innovation council.

With entities such as the Council for Entrepreneurial Development, N.C. Technology Association, NCBIO, the Small Business and Technology Development Center, Service Corps of Retired Executives Association, and many others providing small-business development information and services, is another high-level conglomeration of theseorganizations going to make any difference in bringing jobs to our state?

The increased trend of government intervention in job creation we are seeing is of course directly attributable to the economic collapse and resulting stimulus funding effort we are still experiencing. The jury is still out as to its short- and long-term effectiveness for helping to create new businesses.

That said, even before this current "government equals jobs" period in our nation's history, there has been one group which has consistently proved effective at creating jobs and spurring innovation through the growth of small businesses - the small businesses themselves.

Throughout North Carolina, there are tens of thousands of sole proprietors and companies with fewer than a dozen employees working diligently on their own and in supportive group environments to promote their specific industries and regional business communities. Many are active in organizations such as those listed above for networking and business development, while many more dedicate a significant portion of their time and finances to building a strong prospect pipeline and increasing sales.

Regardless of how many established or new state councils or federal incentive programs are out there, it is up to the fearless people who run small businesses in our state to grab the mantle of economic development and run with it. This can be achieved by nothing less than adopting a single-minded determination to focus on customer service, product quality, and civic involvement to grow and contribute to a growing regional economy. Without such a focus, any government involvement in small business will result in wasted taxpayer dollars as new companies solely obsessed with securing financing flame-out due to a declining customer base.

If our regional and statewide leaders are serious about cultivating technological innovation and stimulating job growth, a focus on supporting small businesses by removing the many tax and legislative burdens they face would go much further than simply reshuffling the deck of existing economic development resources.

David D. Menzies is president of the public relations firm Menzies Consulting and is active in the N.C. Product Design & Prototyping Co-Op, TiE Carolinas, and the Morrisville Chamber of Commerce. His guest editorial appeared in the December 6 News & Observer.

Friday, 4 December 2009

Fewer Job Losses in November for nonresidential construction


"Overall, job loss in the U.S. has slowed dramatically in recent months, and the markets have responded positively to the unexpectedly good news." —Associated Builders & Contractors Chief Economist Anirban Basu


In what may be a sign of good news, the nonresidential construction industry lost 600 jobs in November, according to today's employment report by the U.S. Labor Department. Since November of last year, the sector has lost 101,100 jobs or 12.5 percent, and nonresidential construction employment now stands at 705,600.

Heavy and civil engineering construction gained 5,200 jobs in November – the first monthly increase since May 2008. On a year-over-year basis, heavy and civil engineering construction employment is down 109,000 jobs, or 11.6 percent. Meanwhile, nonresidential specialty trade contractors continue to struggle as the sector shed 28,500 jobs for the month and 424,500 jobs, or 17.1 percent, over the past 12 months.

Residential building construction lost 500 jobs in November and has lost 106,200, or 13.6 percent, since the same period one year ago. Total construction employment – which includes both the residential and nonresidential sectors – lost 27,000 jobs for the month and has lost 979,000, or 14.1 percent, since November 2008. This represents the smallest number of construction jobs lost in any given month since November 2007.

The nation’s employment rate in November decreased by only 11,000 jobs, and the Bureau of Labor Statistics revised the previous month’s estimated job losses to 111,000 from the preliminary report of 190,000. Over the past twelve months, total employment in the U.S. is down by 4,759,000 jobs or 3.5 percent. The nation’s unemployment rate now stands at 10 percent, down from 10.2 percent in October.

What This Means

“The November jobs report blew away even the most optimistic expectations,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “The pace of monthly nonresidential construction job loss over the past 12 months is in excess of 8,400, which is why a loss of only 600 jobs represents good news.

“Overall, job loss in the U.S. has slowed dramatically in recent months, and the markets have responded positively to the unexpectedly good news,” said Basu. “Construction participated more than fully in the improvement and the industry will enter 2010 with momentum.

“However, nonresidential specialty trade contractors are feeling the pain,” said Basu. “Today’s numbers leave commercial construction contractors with little to celebrate.

“It is important to remember that economic conditions remain far from perfect from the perspective of the sustainability of expansion. The stabilization of the labor market appears largely related to the impact of federal spending in the economy, which helps explain the improved performance of heavy and civil engineering and residential building construction, the latter of which continues to benefit from available tax credits,” said Basu.

“But, the impact of stimulus dollars is not eternal. Stimulus packages are intended to be temporary fixes, and this one is no exception,” said Basu. “While the next several months are shaping up to be a time of improvement for the U.S. economy and for the nonresidential construction industry, how lengthy the recovery will be remains in doubt.”

Click Here to view the ABC Construction Economics release.

NC jobless claims rise as White House turns attention to job loss


After months of focusing on Afghanistan and health care, President Barack Obama turned his attention yesterday to the high level of joblessness. But he offered no promise that he could do much to bring unemployment down quickly, the News & Observer reported.

At a White House forum, scheduled for the day before the government releases unemployment and job loss figures for November, Obama sought new ideas from business executives, labor leaders, economists and others. Obama said he would entertain "every demonstrably good idea" for creating jobs, but he cautioned that "our resources are limited."

The president said he would announce some new ideas of his own next week. One of those, he indicated when he participated in a discussion group on clean energy, would be a program of weatherization incentives for homeowners and small businesses modeled on the popular "cash for clunkers" program.

In the House, where lawmakers are particularly sensitive to the employment issue since they all face re-election next year, Democratic leaders were finishing work on a jobs bill for debate this month.

Liberals are calling for ambitious job-creating measures along the lines of the New Deal, and Republicans want to scale back government spending programs. Obama talked Thursday of limited programs that he suggested could provide substantial bang for the buck when it comes to job creation. Among them was the weatherization program.

Called "cash for caulkers," it would enlist contractors and home-improvement companies like Home Depot - whose chief executive was on the panel - to advertise the benefits, much as car dealers did for the clunkers trade-ins this year.

Yet that relatively modest proposal underscores the limits of the government's ability to affect a jobless recovery with the highest unemployment rate in 26 years - and Obama acknowledged as much.

"I want to be clear: While I believe the government has a critical role in creating the conditions for economic growth, ultimately true economic recovery is only going to come from the private sector," he told his audience, which included executives and some critics from American Airlines, Boeing, Nucor, Google, Walt Disney and FedEx.

Obama told the chief executives that he wanted to know: "What's holding back business investment and how we can increase confidence and spur hiring? And if there are things that we're doing here in Washington that are inhibiting you, then we want to know about it."

The Triangle Business Journal reported North Carolina experienced the third largest increase in initial jobless claims nationwide during the week ended Nov. 21, as layoffs mounted in several industries, according to the U.S. Department of Labor.

Job cuts in construction, trade, transportation, lumber/wood, mining, and petroleum industries sent 5,557 people in the state to unemployment offices seeking assistance.

North Carolina trailed only California, with 14,796 claims, and Illinois (6,168) in terms of new jobless claims, the Labor Department said.

Nationally, the employment picture seemed to improve, with initial claims for the week ended Nov. 28 falling by 5,000 to 457,000.

The state’s unemployment rate stood at 11 percent in October. North Carolina is borrowing money – more than a $1 billion at last count – from the federal government to pay unemployment claims, and government officials have said that number could rise to $2 billion next year if the economy does not improve.

Click Here to view the complete News & Observer article. The
Triangle Business Journal article is found Here.

Thursday, 3 December 2009

Construction jobs fall 25%


The Raleigh-Cary area lost 25 percent of its construction jobs between October 2008 and 2009, according to a new analysis of metropolitan area employment data from the Bureau of Labor Statistics released by the Associated General Contractors of America (AGC).

The News Observer reports job losses, which totaled 9,500 in Raleigh and Cary, were the second most of any region in the state behind Charlotte-Gastonia-Concord, which lost 23 percent, or 12,300 of its jobs.

The Durham-Chapel Hill area lost 1,200 construction jobs over the same period, or 12 percent of the total number of jobs it had in October 2008.

Construction employment nationally dropped by 1.1 million jobs over the period, according to the AGC's analysis, with 328 metro areas reporting losses.

The 25 percent decline experienced in Raleigh-Cary was among the highest percentages recorded in any region across the country. The worst hit area from a percentage standpoint was Reno-Sparks, Nev., which saw construction jobs drop by 32 percent, or 5,100 jobs. The Chicago-Naperville-Joliet region in Illinois recorded the largest number of total jobs lost at 24,000.

While the extension of the home buyers' tax credit and expansion of carryback of net operation losses will provide some help for the 1.6 million construction workers who lost their jobs since December 2007, AGC today called for additional measures to stimulate construction demand.

"The nation's economic troubles are forcing construction workers to shoulder a withering burden," said Stephen E. Sandherr, AGC's CEO. Helpful as the stimulus has been in saving some construction jobs, it is going to take more work to halt the devastating job losses that are wiping out millions of construction workers' families."

Click Here to view the News Observer article.

Wednesday, 2 December 2009

Job cuts loom as stimulus fades


Highway-construction companies around the country, having completed the mostly small projects paid for by the federal economic-stimulus package, are starting to see their business run aground, an ominous sign for the nation's weak employment picture, the Wall Street Journal reports.

Since the recession began in 2007, employment in the construction industry has fallen by 1.6 million, according to the the U.S. Department of Labor. Though the housing sector accounts for many of those job losses, road builders have also suffered, and executives in the industry expect layoffs to rise next year.

More broadly, the Congressional Budget Office says it estimates that the federal stimulus package sustained between 600,000 and 1.6 million jobs in the third quarter, and raised gross domestic product by 1.2 to 3.2 percentage points higher than it would have been without the program.

The construction industry's unemployment rate, including related extraction businesses, such as gravel processing, climbed to 19.1% in October, up from 10.7% a year earlier. The transportation and material-moving sectors saw unemployment rise to 11.6% from 7.9% over the same period.

State officials and local contractors trace the industry's woes to the recession and the collapse of the residential and commercial real-estate markets. In addition, they cite the federal government's delayed plans to enact a transportation bill. In one version, the law would have provided $450 billion for highways and infrastructure projects over the next six years.

Congress is no longer actively considering the bill, which has been bumped aside by competing priorities such as the Obama administration's health-care overhaul and by growing support for reducing the federal budget deficit. Some lawmakers fear that continued stimulus spending could harm the economy down the road by saddling the nation with higher debt-servicing bills.

But high unemployment could revive the transportation-spending bill's prospects. Earlier this year the Obama administration was opposed to pushing a big highway bill, deterred in part by the prospect of raising gasoline taxes to pay for it. Faced with a 10.2% jobless rate, however, officials are rethinking their stance. The White House will hold a "jobs summit" to discuss ideas, which are likely to include shifting some spending to transportation projects.

Without an infusion of federal funding, state transportation departments say they can't develop long-term roadway projects, which are critical to the industry. About half of states' funding for such projects comes from the federal highway trust fund, which is funded by the gasoline tax.

Without long-term government projects, Mr. Zimmermann said he may have to lay off as many as 150 people next year. "The stimulus was a shot in the arm, but that's all it was," he said.

Industry executives say that the $27 billion out of the $787 billion stimulus package that went to highway construction went mostly to relatively small "shovel ready" projects, those that didn't require much lead time. The $27 billion—77% of which had been committed as of Nov. 13, according to the Associated General Contractors of America—has saved some jobs.

In the near term, House Democratic leaders are considering paying for some transportation projects that weren't funded by the stimulus package. The size of the spending package hasn't been decided, nor has the question of how it would be funded. Congress is also weighing a broader set of initiatives to spark job growth.

A recent survey by the Transportation Construction Coalition found that more than 76% of contractors expect state transportation departments to put less work up for bid in 2010 than this year. And 44% said they are likely to lay off employees next year.

Click Here to read the complete Wall Street Journal story.

Tuesday, 1 December 2009

Federal government approves use of ConsensusDOCS


The federal government has joined a growing list of groups that allow for the use of template construction contract documents prepared by a coalition of building, owner and surety groups known as ConsensusDOCS. The decision by the U.S. Department of Agriculture’s Rural Utility Service opens the way for key template documents to be used in water construction projects worth up to $20 billion each year.

“It just got much easier for federal officials to write smart, effective contracts that help keep the work on time and on budget,” said Brian Perlberg, Executive Director of the ConsensusDOCS coalition.

The federal agency announced that it will allow the use of two of the coalition’s documents, the Electronic Communications Protocol and the Contractor’s Qualification Statement for Engineered Construction. The protocol allows for key project information to be transmitted electronically, saving significant time and money. The qualification statement, meanwhile, provides federal officials with an easy-to-use form for evaluating contractor qualifications.

Perlberg noted that the federal government is the latest in a series of large-scale project owners to embrace the ConsensusDOCS contracts. He noted that states such as South Dakota, Michigan and North Carolina allow the use of the coalition’s documents. He added that Habitat for Humanity now routinely uses ConsensusDOCS contracts on a number of its key projects.

“You don’t need to start from scratch every time you need a construction contract,” Perlberg said. “We spend years getting these contracts right so others can focus on getting the project right.”

Offering a comprehensive catalog of more than 90 contract documents covering all project delivery methods, ConsensusDOCS contracts are the first and only industry standard contracts written and endorsed by 23 leading construction organizations. For more information, visit www.ConsensusDOCS.org.