Wednesday, 30 June 2010

Toll road model mixes public and private

Reprinted from the Shelby Star

See if you can guess the source of the following quote: “Road building is not a government monopoly anymore. Those days are over.”

If you said (a) the chairman of a state turnpike authority, (b) a highway contractor or (c) the owner of several asphalt plants, move to the breakdown lane.

This pronouncement came from Federico Pena, U.S. Secretary of Transportation under President Clinton., Mr. Pena evidently saw the writing on the wall — namely, that the general public’s tolerance for delays, rerouted gas-tax revenue, political shenanigans and other staples of government-controlled highway construction could stretch only so far.

Like many of America’s stories, transportation follows a certain arc. It begins with private roads and turnpikes and then shifts to more government involvement, with circumstances and trends keeping things in a state of flux. Simply put, we remain a country in search of balance. Recently this search has led North Carolina and other parts of the United States in the direction of public-private endeavors such as toll roads.

It’s easier to defend the status quo when the status quo is working. In North Carolina, that’s a hard case to make. The state has an estimated $65 billion in backlogged transportation projects through the year 2030. The N.C. Turnpike Authority established earlier this decade has the objective of relieving that pressure by bringing some private capital into the mix. Projects on the drawing board include a toll road nicknamed the Garden Parkway that would traverse Gaston County and cross the Catawba River into Charlotte.

People opposed to the Parkway point to the recent bankruptcy filing of a nonprofit that manages a South Carolina toll road. The main difference, of course, is that the Parkway involves some government funding that could serve as a hedge against overpowering debt. It also would enjoy a pool of potential users more than twice as large as the Greenville Southern Connector’s, based on the size of their respective metropolitan areas.

A larger number of users equals more toll revenue, and more toll revenue equals faster retirement of the debt incurred to build the road. Linking the actual users of the road to its financing means a more equitable distribution of cost than a system financed entirely by taxes.

Looking at the bigger picture, though, the very fact that North Carolina’s political leaders said yes to a turnpike authority should tell us something. It just might signal some reservations about state government’s control over highway construction, and a willingness to explore options.

The sentiment that Federico Pena voiced more than a decade ago still holds true. It seems clear that growth and other circumstances have rendered the old, government-dominated model of highway construction significantly less effective. As a result, the search for balance has taken a new road — not without bumps, certainly, but still moving toward progress.

Click Here to view the Shelby Star article.

Tuesday, 29 June 2010

Tax incentives for 'going green'

Contractors interested in green building but skeptical about how it will increase your costs? Before ruling out the concept, don’t forget to consider the tax incentives for green building, says today's Constructon Law in North Carolina blog.

Between the Business Energy Investment Tax Credit, federal cash grants for energy projects, North Carolina incentives for renewable energy property, and NC’s Green Building Incentive, there are ample opportunities to make “going green” a more appealing choice on your next building project.

For a look at some of the tax incentives available, check out "Getting Green for Going Green- Tax incentives for energy-efficient projects" Here.

You can also explore the database of North Carolina incentives for renewables and efficiency.

Monday, 28 June 2010

CFMA sees uptick in construction industry confidence

In the most recent CONFINDEX survey, the Construction Financial Management Association, Princeton, NJ, recorded an uptick in industry confidence. CFMA polls 200 chief financial officers from general contractors, subcontractors, and heavy and civil construction firms. “Our CONFINDEX went from 101 to 108 for the second quarter of 2010,” says Mike Verbanic, CFMA’s director of marketing.

CFMA’s index is based on a scale of 200, with 100 being a stable market. Verbanic notes the CFOs surveyed found general business conditions, including backlog and availability of bank credit, much better than a year ago. “There are no signs of euphoria in the survey, but more of a sense that market conditions are slowly improving,” he says.

As for market prospects, the CFMA survey rating dropped slightly from 129 on a scale of 200 in the first quarter to 127 in this quarter, notes Brian Summers, CFMA’s chief operating officer. “Attitudes about the market are still not great, but they are a far cry from where they were in the fourth quarter of 2008, when the CONFINDEX was 79,” he says.

Click Here to see the report in

Friday, 25 June 2010

Construction industry leaders believe the worst may soon be over

The recession that everyone hoped would end quickly, has turned to grit and determination to hold on until better times, ENR/com reports. While no one sees the current market as ready to take off, major firms are beginning to think the market may soon hit bottom and slowly begin to pull itself back from the brink in 2011.

The ENR Construction Industry Confidence Index (CICI) for the second quarter of 2010 shows 555 executives from construction and design firms believe that, while the market continues to flounder, next year it will be on the rise. The index for the second quarter of 2010 rose dramatically to 41 on a scale of 100 from the first quarter’s 34, and it showed a 10-point rise over the fourth quarter of 2009.

The CICI measures industry sentiment regarding the current market and beliefs about where it will be in three to six months and in the next 12- to 18-month period. An index of 50 would mean a stable market. The CICI is based on responses to surveys sent to more than 2,000 U.S. firms on ENR’s lists of leading contractors, subcontractors and design firms. The current index is based on a survey conducted over a two-week period earlier this month.

While 53% of all respondents say the market still is in decline, this percentage is an improvement over the first quarter, when 68% saw a declining market. Further, only 37% believed the market would continue to decline over the next three to six months, compared to 45% in the first quarter. As in past surveys, designers continue to be more optimistic about a turnaround in the short term than general contractors or subcontractors.

Survey respondents showed increased confidence in almost all market sectors measured by the survey. Applying the CICI rating formula, only the petroleum market, rocked by economic and regulatory uncertainties in the wake of the BP oil spill in the Gulf of Mexico, saw a significant decline—from 51 on a scale of 100 in the first quarter to 44. The only other market sector to lose ground was transportation, going from 55 to 54.

Health care was the market about which survey participants were most confident, earning a rating of 65. The only other buildings market in positive territory was higher education, at 52.

While most markets in the buildings sector gained over the past quarter, respondents continued to believe the recovery in the sector still is a long way off. The only big improvement in attitudes in the buildings sector was multi-unit residential, which rose from a 31 rating to 39.

Infrastructure markets continue to be seen as the healthiest, with power (64), hazardous waste (63) and water, sewer and wastewater (62) the strongest.

Click Here to view the article.

Wednesday, 23 June 2010

Architecture Billings Index falls

After three straight months of improving conditions, the Architecture Billings Index (ABI) fell nearly three points. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending.

The American Institute of Architects (AIA) reported the May ABI rating was 45.8, down substantially from a reading of 48.4 the previous month. This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings), and comes on the heels of the highest score since January 2008 when revenue at architecture firms headed into recession. The new projects inquiry index was 55.5.

“This dip is somewhat of a surprise since it appeared that conditions were pointing towards a recovery,” said AIA Chief Economist Kermit Baker. “The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects that apparently would be successful in this economic environment.”

He added, “An amendment has passed the House that would help lenders and borrowers as they attempt to work out their loans under terms that are mutually acceptable, avoid large numbers of commercial foreclosures, and free up credit that can be used more constructively. If this passes the in Senate then some much needed relief will available for the struggling design and construction industry.”

Key May ABI highlights

◦Regional averages: Northeast (50.6), Midwest (48.5), South (45.9), West (42.9)
◦Sector index breakdown: commercial / industrial (51.3), multi-family residential (46.9),
◦mixed practice (46.8), institutional (43.4),
◦Project inquiries index: 55.5

Click Here to view the AIA news release.

EPA extends deadline for lead paint training

Home improvement contractors will have more time to meet new federal requirements for dealing with lead paint, the Associated Press reports.

The Environmental Protection Agency said it will delay until Oct. 1 enforcement of a rule requiring contractors to take additional precautions when renovating houses where children could be exposed to lead dust from old paint.

The delay comes amid a storm of complaints from industry groups, who said the government has not provided enough trainers to help contractors meet an April deadline.

The EPA rule requires contractors to use "lead-safe" practices when working on homes, day-care centers and schools built before 1978, the year lead paint was banned for residential use because of health risks.

The delay allows contractors to sign up for training by Sept. 30. Training must be completed by Dec. 31.

The EPA said in a statement that it remains committed to protecting children and families from the dangers of lead poisoning, adding that "EPA can and will take enforcement action when contractors violate those work practices."

The decision simply gives firms more time to file needed paperwork to demonstrate they are following lead-safe work practices, as well as more time for contractors to enroll in and complete the required training courses, said EPA spokesman Brendan Gilfillan.
Inhofe said he supports the lead paint rule, but he called the EPA's handling of the issue a "disaster."

Click Here to view the EPA lead paint rule.

Tuesday, 22 June 2010

Carolinas AGC Construction Barometer indicates stronger business activity

For the first three months of 2010, the Carolinas AGC Construction Barometer advanced 1.0% on rising infrastructure spending, a small uptick in construction hiring, and increased activity typical in warmer weather.

Limiting the Barometer's gain: contractors continue to struggle with weak market demand for new projects, and they foresee rising construction costs. In addition, ultra-low interest rates continue to offer minimal benefit to contractors unable to secure funding for both short- and long-term borrowing.

The Barometer's quantitative indicators showed significantly stronger improvement than its qualitative measures (which capture contractor sentiment regarding business conditions). The quantitative Employment & Labor Market indicator advanced 5.9% on significantly higher hiring volume in all regions except in Heartland NC. Most Carolinas contractors remain open to a moderate hiring increase while labor is plentiful and costs are quite reasonable.

The quantitative Business & Economic Trends markers advanced 5% on reports of stronger construction activity, stable material and equipment costs, and rising highway and the arrival of federal stimulus money.

Unfortunately, contractors reported rising expectations that federal stimulus project money would affect overall business volume for only a few quarters in 2010, vanishing after the summer unless more government money is directed toward highway and public works projects. Thus demand for new skilled labor and heavy equipment is expected to fall in late summer, and business conditions for the rest of 2010 are likely to slow somewhat from the pace of early spring.

Another troubling trend: panelists reported significantly higher probabilities that construction costs will rise this summer, across all projected construction cost data categories.

Finally, interest rates continue at rock-bottom levels, but both demand and supply remain weak. Contractor borrowing remains well below historical average.

The Barometer advanced at a significantly stronger pace in South Carolina, where the impact of federal stimulus money appeared to be much stronger than in North Carolina. SC contractors reported improved highway spending and stronger public works activity, but neither trend is expected to last much further into the year. Thus, looking out toward the remainder of 2010, SC contractors reported lower hiring expectations mid-summer. SC contractors reported lower interest rates on contractor borrowing, slightly easier credit conditions, and a bit higher volume of loan approvals for the quarter.

Business conditions in North Carolina look somewhat different. Panelists reported slightly stronger private activity, a smaller uptick in highway spending fueled by federal stimulus money, and no real change in hiring plans. The upward movement in private construction in North Carolina is expected to be sustained for remaining 2010, resulting in a slight tightening in the supply of available skilled labor. Consistent with this trend, construction wages are expected to advance in the second and third quarters of 2010.

Click Here to view the complete Carolinas AGC Construction Barometer report.

Monday, 21 June 2010

May construction starts up 16% from April

Reed Construction Data (RCD) announced that the year-to-date value of construction starts through May, excluding residential contracts, totaled $105.2 billion, 9.8% more than during the same months in 2009. Individual month of May starts were 16.3% higher than in April.

This is a little more than the usual seasonal gain in May. The value of starts has now been about steady for three months after allowing for seasonality. Current starts are 50% above the low point last June but remain 25% below the pre-recession peak. The value of starts is expected to be steady in the coming months and then begin to rise at the end of the year.

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.

The economic environment for construction is clearly improving. Contractors have kept employment steady in the last three months and buildings funded by the stimulus plan are being started. The long, sharp rise in the commercial vacancy rate is now slowing with scattered reports of rising occupancy rates.

The slide in heavy project starts paused in May. Starts rose 20.0% from April in line with the usual seasonal trends and were off 20% from the stimulus-boosted peak last August. The stimulus impact in the heavy market continues to ebb month to month. But no further significant decline is expected as delayed transportation and water/sewer projects replace slipping highway project starts.

May non-residential building starts were 14% above April, reversing that month’s decline. Typically, there is very little seasonal pickup in May. Total non-residential building starts were 5% below the 2006 to 2008 average.

Although off by 3.6% last month, institutional starts remain relatively high. Commercial starts jumped 52% from an unusually weak April but remain more depressed than institutional starts. There was a significant May rebound in all commercial categories except hotels which slipped a further 40%.

Click Here to view the RCD news article.

Friday, 18 June 2010

Certified green buildings on the rise

Certified green building projects are on the rise and a future where sustainable residential developments are the norm may not be too far away, according to architectural and engineering management services firm ZweigWhite, Wayland, MA.

“If we can ever get this communicated to the building industry, I can’t imagine building anything any different,” says Jim Regan in an interview for ZweigWhite’s The Zweig Letter. Regan’s company Energy Smart Home Builders is the developer of Prairie Ridge Estates, a 132-unit net-zero subdivision in New Lenox, Ill.

Bryan Jackson, a green and sustainable construction adjunct professor at the University of Southern California and the editor of Green Building Update, related to ZweigWhite that recent research predicts 900 percent growth in certified green projects worldwide in the next 10 years. Specifically, “Green Building Certification Programs” by Pike Research 2010 estimates that certified green building projects will grow from 6 billion square feet this year to 53 billion square feet worldwide by 2020, with almost 20 percent of these projects coming from the residential sector.

The Urban Land Institute and the Brookings Institution have published demographic data claiming younger buyers are more interested in living in urban-like settings, not suburbs. That fits in with what LEED-ND (Neighborhood Development) is trying to attain with a standard that “encourages new urbanism, smart growth and higher density,” says Richard Taylor, principal with Richard Taylor Architects, Dublin, Ohio.

A challenge for LEED-ND is that self-sufficient neighborhoods don’t sprout overnight with all the commerce, housing and accessibility that make them desirable, notes ZweigWhite in its news release.

More information on ZweigWhite can be found at

Thursday, 17 June 2010

USCIS announces redesign of E-Verify website

The U.S. Citizenship and Immigration Service (USCIS) has launched an updated version of the E-Verify online employment verification system website.

According to USCIS, the new design will make the website easier to navigate, will minimize errors and has new security features that will mask Social Security numbers and minimize the chances of fraudulent access.

The improved website comes just months after a January report found that E-Verify wrongly authorizes about 54 percent of illegal immigrants to work in the United States. A September 2009 rule makes the use of E-Verify mandatory for all federal contractors, but it is still available to non-federal contractors on a voluntary basis.

Designated agents are not required to implement this new version of E-Verify immediately, so contractors that use a designated agent should check to see whether these changes will be reflected immediately in the interface that is provided.

Before using the updated system for the first time, users are required to complete a 20-minute tutorial.

For more information, click Here.

Wednesday, 16 June 2010

Builder confidence declines in June

Snapping a string of two consecutive monthly gains, builder confidence in the market for newly built, single-family homes fell back to February levels, before the beginning of the home buyer tax credit-related surge, according to results of the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

The HMI dropped five points to 17 in June.

“We expected some softening in the market following the expiration of the home buyer tax credit and this report seems to verify this assumption,” said NAHB Chief Economist David Crowe. “In the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should help the housing market move forward. But as today’s HMI data shows, builders still remain very cautious and are aware that several factors could impede the nascent housing recovery, including serious problems in obtaining financing for the production of housing, faulty appraisal practices and competition from short sales and foreclosed properties.”

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Each of the HMI’s component indexes recorded declines in June. The component gauging current sales conditions fell five points to 17, while the component gauging sales expectations for the next six months declined four points to 23 (from a one-point downward revised index level of 27 in May) and the component gauging traffic of prospective buyers fell two points to 14.

The HMI also posted losses in every region in June. The Northeast, which has the smallest survey sample and is therefore subject to greater month-to-month volatility, fell 17 points to 18 following a 14-point jump in May. The Midwest posted a three-point loss to 14, while the South also registered a three-point decline to 19 and the West fell four points to 15 from a revised May level of 19.

HMI tables can be accessed online at: More information on housing statistics is also available at:

Tuesday, 15 June 2010

Construction cost now rising after a 7% decline

by Jim Haughey
RCD Chief Economist

The GDP price data through the first quarter show a 1% rise in residential construction costs over two quarters and a 0.3% rise in nonresidential and heavy construction costs in the first quarter.

Partial material price and wage data for the second quarter suggest that construction costs continued to rise slowly during the spring. First quarter construction costs were down 6.3% from the 2007 peak for residential construction and 6.2% for nonresidential and heavy construction.

The drop in contractors’ margins can not be measured directly. In the residential market, both materials prices and hourly wages rose 5.9% while total building cost dropped 6.2%. Nominally, this rise in labor and materials cost contributes 4-4.5% to the overall cost of construction.

In turn, this implies that builders’ margins fell 10-10.5% of the total cost of the building which would drop margins to the zero range. While this happened in some cases, overall margins likely remained positive although very depressed. This calculation ignores cost reductions from material substitutions and improved labor productivity.

Current projections of materials and labor cost as well as building sales prices suggest that contractor margins suggest that margins could be slightly lower in the spring and summer but improving by yearend although still depressed. Next year, more rapid gains in building prices will permit margins to improve faster but not fully back to the normal range.

Click Here to view RCD's Construction Industry Trends report.

Monday, 14 June 2010

Federal contractors required to post “Employee Rights” poster

Effective June 21, the U.S. Department of Labor (DOL) will require federal contractors and subcontractors to post a notice informing employees of certain rights afforded by the National Labor Relations Act (NLRA), in accordance with President Obama’s Executive Order 13496.

The final rule describes the size, content and location requirements for posting the required notice. The rule applies to all federal contractors performing work on contracts worth more than $100,000, and all federal subcontractors at any tier performing work worth more than $10,000 (even if the prime contractor on the project is exempt from the requirement). The notice must be posted physically in a prominent location where employees can easily see it and also must be posted electronically if the employer posts similar notices online.

In direct response to comments filed by the Associated Builders & Contactors, the poster contains revised examples of legal misconduct that also reflect unlawful union activity, rather than solely listing employer activity. In addition, the agency clarified that the new poster will not be used as a “backdoor” DOL enforcement mechanism for the substantive provisions of the NLRA. DOL clearly stated that complaints arising out of union activity will be referred directly to the National Labor Relations Board (NLRB), as has always been the case.

For more information, including a downloadable poster and additional guidance, visit DOL’s EO 13496 compliance webpage Here.

Friday, 11 June 2010

OSHA hexavalent chromium exposure notification rules take effect June 15

Effective June 15, OSHA will require employers to notify workers of all hexavalent chromium exposure findings regardless of whether the finding is above the permissible exposure limit (PEL).

In May, OSHA issued a final rule revising the employee notification requirements under the February 2006 hexavalent chromium final rule. The revisions stemmed from a 2009 court order when OSHA was directed to either lower the PEL, or amend the notification requirements—OSHA opted for the latter.

Prior to updating the hexavalent chromium final rule, OSHA Feb. 23 announced that it is implementing a national emphasis program focused on hexavalent chromium exposure. The program will focus on industries where overexposures frequently occur, including construction, and will apply to all businesses, including those with fewer than 10 employees.

For additional information click Here.

Thursday, 10 June 2010

Promptly file payment bond and mechanic's lien rights

by Jackson B. Boyd, Ober Kaler, Attorneys at Law

There are many reasons why a party to a construction project should promptly file a payment bond claim or a mechanic's lien claim when those rights mature. The U.S. Court of Appeals for the Fourth Circuit recently emphasized this point in the bankruptcy context. In United Rentals, Inc. v. Angell, No. 09-1209 (Jan. 22, 2010), the Fourth Circuit upheld a bankruptcy court judgment allowing a bankruptcy trustee to avoid and recover $66,963.74 as preferential payments made by Partitions Plus of Wilmington, Inc. ("Partitions") to United Rentals, Inc. ("United") during the 90 days prior to Partitions' bankruptcy petition.

At issue was United's failure to make a payment bond or mechanic's lien claim prior to receiving Partitions' payments, which the Fourth Circuit determined was fatal to United's argument that the payments were contemporaneous exchanges for new value because they extinguished United's right to enforce its claims.

As background, United had subcontracted with Partitions to supply rental equipment for multiple construction projects, and Partitions had executed payment and performance bonds for several of those projects. Partitions then filed a Chapter 11 bankruptcy petition that was converted to a Chapter 7 proceeding. However, in the 90-day period prior to its bankruptcy filing, Partitions made three payments (the "transfers") to United for amounts owed for United's prior provision of rental equipment.

The bankruptcy trustee sought to avoid and recover the transfers as preferential payments under 11 U.S.C.A. § 547(b), arguing that the transfers were made (1) for the benefit of United, (2) on account of antecedent debts owed by Partitions before the transfers were made, (3) while Partitions was insolvent, (4) within 90 days before Partitions filed its bankruptcy petition, and (5) to enable United to receive more than it would have received from Partitions' Chapter 7 bankruptcy on the debt the transfers extinguished if the transfers had not been made....

...While the Fourth Circuit's decision reviewed lien rights under North Carolina law and the nuances of these rights vary from state to state, the decision is nevertheless an important reminder that parties to a construction project should consider enforcing their bond and lien rights as soon as they mature.

Had United filed a claim on the payment bond or sought to enforce a mechanic's lien before the transfers were made, United may have obtained a security interest that it could have released in exchange for the transfers from Partitions during the 90-day preference period. This contemporaneous exchange for new value, in turn, may have enabled United to defeat the bankruptcy trustee's preferential payment action instead of refunding almost $67,000 to the trustee.

Click Here to view the entire June 4 article published on

Wednesday, 9 June 2010

We Are All In This Together

Cynthia Mills, CAE, Carolinas Associated General Contractors President & CEO, addressed the American Subcontractors Association of the Carolinas Triangle Chapter luncheon yesterday in Raleigh on the topic: “We Are All in This Together.”

Mills shared timely information on how subcontractors can adapt to and survive current economic conditions and deal with an ever evolving Federal presence. She said contractors must focus both on “getting work and retooling their businesses for the changing marketplace they will face following the economic recovery.”

She said CAGC is engaging in new technology and partnerships to improve service delivery to its members. The CAGC President urged contractors and subcontractors to show proper respect for each other. “You should inquire, not accuse when problems arise,” she urged. “Be compassionate in the workplace.”

“The problem is we have too much communications, with email, the internet. Facebook, etc. What we need is proper communications,” she added.

Mills invited ASAC members to attend the Building/Utility/Specialty-Subcontractor Division (BUSS) Annual Meeting, July 22-25 at the Wild Dunes Resort on the Isle of Palms outside of Charleston. Presentation topics include: The State of the Economy—A Comprehensive Review; Federal Contacting, Stimulus and Construction; Washington Report-Healthcare Reform, Immigration and other Legislative Initiative Affecting the Construction Industry. Division breakout sessions will feature specific subject matter programs for utility building and specialty/subcontractor members.

For meeting details and registration information click Here

Tuesday, 8 June 2010

OSHA Severe Violator Enforcement Program targets contractors

Effective June 5, OSHA’s Severe Violator Enforcement Program (SVEP) will increase the number of OSHA inspections on jobsites where employers are deemed to “endanger workers by demonstrating their indifference to their (workplace safety) responsibilities under the law.”

In a recent Regulatory Alert, the Associated Builders & Contractors reports OSHA will include mandatory follow-up inspections on these jobsites, as well as inspections on worksites run by the same employer where OSHA believes similar hazards might exist.

In April, OSHA stated that SVEP is intended to go after employers that have committed violations that qualify as “willful,” “repeated” or “failure to abate,” as well as violations that result in a fatality, expose employees to highly hazardous chemicals, or that involve “high-emphasis” hazards. Examples of high-emphasis hazards are fall hazards in construction and other industries; amputation hazards; lead hazards; and excavation hazards.

In addition, OSHA stated publicly that it plans to cite employers for ergonomics hazards under the Occupational Safety and Health (OSH) Act’s General Duty Clause. This precludes the need for a stand-alone ergonomics standard in industries where ergonomics is already a “recognized hazard.”

OSHA also plans to launch two pilot programs directly targeting the construction industry. First, the agency plans to test recordkeeping enforcement on construction and mobile worksites during the time it is conducting a national emphasis program (NEP) on non-mobile worksite recordkeeping. Second, OSHA plans to test the utilization of building inspectors to identify and report suspected safety hazards in 11 cities nationwide.

For more information, including tables outlining the new penalty levels, view OSHA’s SVEP directive Here.

Sunday, 6 June 2010

IRS issues form to claim tax exemption for hiring new workers

The Internal Revenue Service (IRS) has posted on its website the newly-revised payroll tax form that most eligible employers can use to claim the special payroll tax exemption that applies to many new workers hired during 2010. The payroll tax exemption and the related new hire retention credit were created by the Hiring Incentives to Restore Employment (HIRE) Act signed into law on March 18.

Employers who hire unemployed workers after February 3, 2010 and before January 1, 2011 may qualify for a 6.2 percent payroll tax incentive, in effect exempting them from the employer's share of Social Security tax on wages paid to these workers after March 18. The employee's 6.2 percent share of Social Security tax and the employer and employee's shares of Medicare taxes still apply to all wages. Form 941, Employer's Quarterly Federal Tax Return, revised for use beginning with the second calendar quarter of 2010, will be filed by most employers claiming the payroll tax exemption for wages paid to qualified workers. The instructions for the new Form 941 are also available.

The HIRE Act requires that employers get a signed statement from each eligible new hire, certifying that he or she was not employed for more than 40 hours during the 60 days before beginning employment with that employer. Employers can use new Form W-11 released last month to meet this requirement.

In addition, for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year, businesses may claim a new hire retention credit of $1,000 per worker on their income tax return.

Further details on both the tax credit and the payroll tax exemption can be found in a list of answers to frequently asked questions about the new law posted Here.

View the tax exemption announcement that appeared on the Associated General Contractors website Here.

Friday, 4 June 2010

Work on Charlotte outerbelt among key road projects ahead

Construction on the last segment of Interstate 485 will begin later this year - the first piece of nearly $1.3 billion in highway projects planned for the Charlotte area early this decade.

The Charlotte Observer reports by 2011, the N.C. Department of Transportation also plans to be widening I-85 in Cabarrus County, constructing the Monroe Bypass/Connector in Union County and rebuilding the I-85 Yadkin River bridge.

"This is the first time (the state) has had this much dollar value in one place at one time," said Barry Moose, a division engineer with the N.C. DOT who oversees the Charlotte area.

Gov. Bev Perdue held a news conference to announce that the DOT had selected Blythe Construction of Charlotte for a $139.5 million contract to build an eight-lane stretch of I-485 in northeast Charlotte. That segment will run from N.C. 115 to a planned interchange at I-85, south of Concord Mills. The section is expected to open in early 2015.

The other planned projects include: A contract to build an interchange for I-485 and I-85 south of Concord Mills. The DOT recently changed the proposed design from a low-speed, cloverleaf interchange to a high-speed interchange with several layers of bridges. The new design will be similar to the interchange at I-77 and I-485 in south Charlotte.

That contract, expected to be worth $155 million, will be awarded later this year. The winning firm will design and build the interchange. Moose said the interchange will open at the same time as Blythe's segment of the outerbelt, in 2015. The DOT is also planning to widen I-85 from Bruton Smith Boulevard to N.C. 73 to eight lanes total. That $150 million contract will be awarded in September.

The 55-year-old Yadkin River bridge northeast of Salisbury doesn't have shoulders and is considered "structurally deficient" by the federal government. It is being replaced with an eight-lane bridge. The project was originally budgeted for $180 million, but the DOT in April awarded a contract to the joint-venture company of Flatiron-Lane for $136 million. The new bridge is expected to be open by 2013. Gov. Perdue is hoping to pay for the Yadkin project and other large infrastructure projects through a proposed "Mobility Fund" that must be approved by the General Assembly.

The N.C. Turnpike Authority is planning to award a contract by December for the $800 million Monroe Connector/Bypass, a toll road that will allow motorists to bypass the heavily congested U.S. 74 in Union County. The 20-mile project could be finished by 2014.

Blythe was the lowest of four bidders for the I-485 project. Because of the recession, all bids came in under the DOT's proposed budget for the project. Conti said the project will cost about $25 million less than the DOT projected.

The DOT is currently doing a cost-benefit analysis of proposed loop projects statewide, including other outerbelt proposals in Asheville, Winston-Salem, Greensboro, Fayetteville and Wilmington.

Click Here to view the Charlotte Observer article.

Thursday, 3 June 2010

Private nonresidential construction spending up in April

For the first time since March 2009, private nonresidential construction spending increased 1.7 percent in April, according to the June 1 report by the U.S. Census Bureau. However, on a year-over-year basis, private nonresidential construction spending is down 24.6 percent. Total nonresidential construction – which includes both private and public – is up 2 percent for the month, the second consecutive monthly increase. Since April 2009, total nonresidential construction spending is down 16.1 percent and now stands at $596.9 billion.

Overall, total construction spending – which includes both residential and nonresidential – was 2.7 percent higher in April 2010, making it the third consecutive monthly increase, but was down 10.5 percent compared to the same period one year ago.


“The US Census report represents a reversal of numerous trends,” said Associated Builders and Contractors Chief Economist Anirban Basu. “In recent quarters, nonresidential construction spending has been fueled by publicly-financed projects, many of them in the transportation category. However, in April, transportation-related spending was essentially flat, an indication that the impact of stimulus spending in that category may have peaked and that other nonresidential construction segments will need to expand if the overall construction industry's momentum is to continue.

“On a year-over-year basis, the nonresidential segments that have expanded are all closely tied to the stimulus package passed in February of 2009. These are transportation, conservation and development and highway/street construction,” said Basu.

“The generally upbeat report also highlighted several vulnerabilities that remain. For example, conventional wisdom suggests that state and local government-financed construction will decline going forward as lower levels of government seek to shrink their collective balance sheets,” Basu said. “This is consistent with observed monthly declines in spending in the education and public safety categories.

Privately-financed construction also remains generally weak, with lodging related construction down approximately 60 percent on a year-over-year basis. This indicates that the construction industry has a way to go before fully recovering to activity levels seen before the economic downturn.”

Click Here to view the recent ABC Construction Economics Update.

Wednesday, 2 June 2010

UNCC economist predicts 2.2% economic growth this year and the addition of 58,000 jobs

N.C. employers will add jobs at a modest pace this year as the state continues its economic rebound, UNC Charlotte economist John Connaughton said yesterday in his quarterly economic forecast.

Connaughton predicts that the state's economy will grow 2.2 percent this year over last, according to a Charlotte Observer report. He expects businesses across the state to add 58,000 jobs in 2010.

By contrast, N.C. companies lost 182,900 jobs in 2009 and 115,800 the year before.

"While the North Carolina economy has been behind the U.S. economic recovery, the state now appears to be rebounding," Connaughton said. "The question is no longer when we will recover, but how strong will the recovery be?"

Connaughton said he expects most of the state's 11 economic sectors to see output increase this year, he said. The strongest sectors include services, finance, insurance and real estate and government.

Seven sectors will also see job growth, he said. The strongest: wholesale trade, retail trade and construction, Connaughton said.

That's good news, but he said job growth is likely to remain the biggest problem for the state and national economy for the next few years.

"North Carolina lost almost 300,000 jobs during 2008 and 2009, and it is likely to take four or five years to regain the lost jobs," Connaughton said.

He expects the N.C. unemployment rate to decline this year, reaching 10.8 percent by December. Next year, he said, he expects the state's economy to grow by 2.8 percent.

Tuesday, 1 June 2010

NC construction jobs decline 11% between April 2009 and 2010

North Carolina shed 21,500 construction jobs (11%) between April 2009 and 2010 according to a new analysis of federal employment data released by the Associated General Contractors of America.

Association officials noted that even though construction job losses were less widespread than in previous months, the industry is still shedding workers in most metropolitan areas.

“Construction employment is clearly stabilizing in a growing list of metro areas,” said Ken Simonson, the association’s chief economist. “Unfortunately, too many construction workers are losing jobs in too many metro areas.”

Several NC metro areas recorded double–digit percentage losses in construction employment, including Charlotte-Gastonia-Rock Hill (19%); Durham-Chapel Hill (14%); Greensboro-High Point (11%); Raeigh-Cary (10%; Winston Salem (10%).

The construction economist said there was little reason to expect broad gains in construction employment for the foreseeable future. “While the stimulus, military construction and home building should help, overall construction demand is likely to remain weak well into 2011 for most regions,” Simonson said.

Association officials added that without Congressional and White House action on overdue infrastructure programs, including transportation, aviation and water legislation, construction employment would continue to suffer.

View April 2010 metropolitan area construction employment figures Here.