Thursday, 30 September 2010

Study shows underperforming infrastructure is placing a drag on economic growth

The U.S. Chamber of Commerce released the first-ever nationwide and state-by-state “Transportation Performance Indexes” which show a significant decline over the last five years in how America’s transportation infrastructure is serving the needs of domestic commerce, international trade, and the overall U.S. economy. The annual index is the first of its kind designed to look over time at how U.S. transportation infrastructure is serving the needs of the U.S. economy and business community.

“The performance of the nation’s transportation system is not keeping pace with the rate of growth of the demands on that system,” said Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce. “As our economy recovers, the nation’s transportation infrastructure must be prepared to meet the projected growth in freight and population. In fact, a 10-point improvement in the new national transportation index could generate 3% more growth in the nation's Gross Domestic Product. However, our index shows that from now through 2015 there will be a rapid decline in the performance of the system if we continue business as usual. Right now we’re on an unsustainable path.”

The annual Transportation Performance Index combines indicators of supply (availability), quality of service (reliability, predictability, safety) and utilization (potential for future growth) across all modes of passenger and freight transportation – highway, public transportation, freight railroad, aviation, marine and intermodal – to show how well the U.S. transportation system is serving the needs of businesses and the overall U.S. economy.

The national index is 51.24 in 2008, which is a slight improvement from 50.74 in 2007. However, the moving average, which smoothes the annual variations, reveals a clear downward trend from 2003 to 2008, demonstrating that the performance of the U.S. transportation system is not keeping pace with the demands on that system. Today’s release covers the time period from 1990 to 2008, the last year for which national-level date is available. Over this period the index – or the performance of our transportation system – increased only about 6% while U.S. population during that time period grew 22%, passenger travel grew 39%, and freight traffic grew 27%. Read More.

Wednesday, 29 September 2010

Triangle continues to bleed construction jobs

Construction employment in the three county Triangle region declined by 3,600 workers, or 9.4 percent, between August 2009 and August 2010, the Triangle Business Journal reports.

The Durham/Chapel Hill metro lost 1,000 workers, to 7,300, during the period. Raleigh/Cary, meanwhile, lost 2,600 to 27,100.

Statewide during the period, North Carolina lost 15,600 construction workers, or 8 percent.

Looking at the country as a whole, however, not all the news is downbeat, reports the Associated General Contractors of America. During the 12 months, 56 out of 337 metro areas, nearly 17 percent, actually added construction workers, the most since 2008.

“With construction employment on the mend in an increasing number of areas, it appears that the worst is finally over,” says Ken Simonson, the association’s chief economist. “The fact remains, however, that this industry has a long way to go before we see construction employment back to pre-recession levels.”
Read More.

Monday, 27 September 2010

NC construction company settles EEOC complaint

A North Carolina construction company has agreed to pay $47,500 to three laborers it fired because they refused to work Saturdays for religious reasons.

T.A. Loving Co., with offices in Goldsboro and Morrisville, reached the settlement with the U.S. Equal Employment Opportunity Commission, which had sued the company in February for religious discrimination. The settlement was reported by the News & Observer.

T.A. Loving fired four workers after they said they would not show up for a Saturday work assignment. As members of the Seventh-Day Adventist church, the workers said, they can't work from sundown Friday to sundown Saturday, the church sabbath.

The EEOC contends that the construction company could have accommodated the workers' religious needs.

"They could have brought in temporary people to cover the shift or scheduled other workers to work that day," said Lynette Barnes, an EEOC lawyer in Charlotte.

The federal anti-discrimination agency has seen a spike in complaints during the recession as jobs have become scarce and fired employees grow more aggressive about seeking legal remedies.

Between 1997 and 2006, the EEOC received 75,000 to 80,000 complaints a year nationally, but complaints soared to 95,402 in 2008 and 93,277 last year.

Complaints also spiked in the previous recession, surging to 84,442 in 2002, declining again when the economy improved.

The 1964 Civil Rights Act requires employers to make reasonable accommodations for their workers' religious beliefs unless accommodating the workers would impose an undue hardship on a company.

T.A. Loving settled the case but did not admit to wrongdoing. The company told the EEOC that the workers didn't give the company enough time to make accommodations.
In a court filing, the company admitted that it was able to find replacements for the fired employees on the same day.

As part of the settlement, the company will have to purge the dismissed worker's employment records and provide them with reference letters. It will also have to provide annual anti-discrimination training to its managers and workers.

Seventh-Day Adventists are known as sabbatarians, a term that refers to those who observe the sabbath from sundown Friday to sundown Saturday. The category also includes Jehovah's Witnesses and Jews.

The EEOC sued on behalf of three of the Goldsboro-area workers T.A. Loving fired; the fourth, Jaime Mejia, had left the country and could not be located.

Elvis Cifuentes Angel will receive $20,000 from the settlement. Hugo Angel-Lopez and Abenaias Velasquez will both receive $13,750. Read more.

North Carolina state crane regulations to be repealed

Crane safety regulations introduced by North Carolina’s Department of Labor in 2009 are to be repealed to allow implementation of the new federal OSHA cranes and derricks rule, Crane Today magazine reports.

The US Department of Labor’s Occupational Safety and Health Administration (OSHA), announced the update to the previous federal standard in late July; the law is expected to come into effect on 8 November 2010.

The new OSHA cranes and derricks rule replaces existing regulations based on 39-year old standards, which do not take into account advancements in construction plants and processes.

North Carolina’s Department of Labor (NCDOL) introduced its own state-wide crane safety standard, ‘Cranes and Derricks, 13 NCAC 7F.0900’ in October 2009, based on a draft version of the new federal rule published in the Federal Register a year earlier.

As a result, the changeover to the new rule will have little effect on crane owners and operators, with one of the few significant changes being that employers now have four years instead of two to ensure their employees are certified.

Anticipating the length of time the federal regulations would take to be implemented, the NCDOL decided it could bring its own regulations into force much quicker to bridge the gap until the federal rules were ready.

Now the final rule is ready to take effect, NCDOL intends to repeal the state laws before November to ensure consistency, and eliminate potential confusion for North Carolina’s crane owners and operators. Read More.

Friday, 24 September 2010

Smart-grid technology to save energy in uptown Charlotte

Duke Energy and corporate-government partners unveiled plans yesterday to deploy cutting-edge technology to save energy in uptown Charlotte's commercial core.

The Charlotte Observer reports the first-of-its king initiative would apply the smart-grid devices Duke is already testing in south Charlotte homes to the energy-hungry buildings in the center city.

The goal, by 2016, is to cut energy use 20 percent in about 60 buildings, including most commercial structures inside the Interstate 277 loop.

Smart grid refers to the use of digital technology and sensors to update an electrical system that has changed little, in its basics, since Thomas Edison. It uses electricity more efficiently, in part by giving consumers more information and control over their energy use.

In uptown, digital displays in each building's lobby will track its real-time energy use. Building managers will use the information to fine-tune heating, cooling and lighting. Workers, Duke hopes, will be motivated to turn off lights.

With Thursday's announcement, Duke, Bank of America, Wells Fargo, the city of Charlotte and Mecklenburg County - which control about 12 million of the 15 million square feet of commercial space inside the loop - agreed to make it a joint effort.

Organizers hope to expand it to most other commercial buildings in the uptown loop.

"We're putting control in the hands of our major customers and we're making our city one of the most energy-efficient in the world" as energy costs rise, Duke CEO Jim Rogers said in New York, where the plan was announced at the annual meeting of the Clinton Global Initiative. The Clinton initiative promotes government-private sector partnerships.

Duke worked with Charlotte Center City Partners, the uptown development group, to design a signature test of energy efficiency. It will be the first in a series of public-private projects focused on green values under an umbrella initiative called Envision: Charlotte.

Duke and technology company Cisco will front the $5.3million cost of outfitting Charlotte's commercial buildings with energy-management equipment. Duke hopes to recover some of its costs through a small energy-efficiency rider that would be added to customer bills.

Apart from saving electricity, one of the goals is to heighten awareness of energy conservation.

Commercial buildings waste about 30 percent of the energy they buy, the Environmental Protection Agency says. Bank of America and Wells Fargo, which together control 10 million square feet uptown, have both set corporate energy-saving goals and erected new towers that meet high efficiency standards.

Charlotte has also staked a claim as an energy capital because of the presence of Duke, 13,000 energy-related jobs in the broader region and training programs such as UNCC's Energy Production & Infrastructure Center. Read More.



Read more: http://www.charlotteobserver.com/2010/09/24/1714209/a-smarter-way-to-use-energy-in.html#ixzz10Rr3SOY9

Thursday, 23 September 2010

Construction backlog no longer expanding

The Associated Builders and Contractors (ABC) reports that its latest Construction Backlog Indicator (CBI) remained virtually unchanged in mid-summer. Based on a national survey of ABC members, construction backlog stood at 7 months in June and 7.3 months in July – up 20.4 percent from July 2009, but down 1.2 percent from CBI's historic high of 7.4 months in April 2010.

"Construction backlog is roughly flat in sectors of the economy that heavily depend on private financing and remains elevated for segments that depend on public financing. This is cause for concern because publicly financed construction spending is set to decline sometime in 2011, and beyond," said ABC Chief Economist Anirban Basu.

"There are no indications, however, that overall construction business volume has begun to shrink; merely that backlog is no longer advancing.”

Basu also pointed out that the current economic recovery is likely to be different than previous recoveries due to rising office vacancy rates, slow job creation and tight credit, meaning construction’s recovery is not guaranteed.

Compared to a year ago, all regions except for the West experienced a rise in construction backlog and the increase has been particularly profound in the Northeast, rising from 5.5 months in July 2009 to 8.7 months in July 2010. The Middle States ended July 2010 with the shortest construction backlog at 6.2 months.

According to Basu, the Northeast is performing well because of its healthier investment banks, higher federal government spending on military bases, and an expanding technology sector. States with ongoing softness in economic activity, such as Arizona, California, Nevada and New Mexico, helped to make the West the only region that hasn’t increased its backlog year over year.

Construction backlog in the commercial and institutional category now stands at 7.1 months, down from 7.2 months the previous three months. In the heavy industrial category, construction backlog slipped from 6.8 months in April to 6.7 months in July but infrastructure backlog has been above 10 months for three consecutive months – the longest stretch for this category in CBI history.

Firms with annual revenue greater than $100 million continue to experience the longest construction backlog at 8 months. Construction backlog for firms in the $50 million to $100 million category now stands at 7.7 months. However, backlog for this group is below the March 2010 level of 8 months. Firms with annual revenue below $30 million have an average construction backlog of 6.5 months – the highest reading for this group in CBI history.

Backlog initially began rising among the largest firms, those with revenues in excess of $100 million per year," said Basu. "In contrast, smaller firms with annual revenue below $30 million did not begin to experience upticks in construction backlog until early this year – a sign that business improvement tends to become apparent among the largest firms first, and then flows down to smaller construction contractors and subcontractors."

To read more about CBI click Here.

Wednesday, 22 September 2010

Modest improvement in Architectural Billings Index

Still not entering into the positive phase, the Architecture Billings Index (ABI) increased for the third straight month in August. 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 August ABI score was 48.2, up slightly from a reading of 47.9 the previous month. This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was also up, moving from 53.1 to 54.6.

“Project cancelations, regardless of when they happen in the design phase, continue to be the main road block to recovery for the construction sector,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Numerous projects have been put on hold indefinitely over the last several months with little hope that they will be resumed. Work that is being done is more likely smaller renovation projects, as opposed to new buildings.”

Key August ABI highlights

◦Regional averages: Northeast (50.9), Midwest (49.2), West (45.8), South (45.3)

◦Sector index breakdown: commercial / industrial (50.6), ), multi-family residential (46.9), institutional (46.0), mixed practice (42.6)

◦Project inquiries index: 54.6

About the AIA Architecture Billings Index

The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. Read More

Monday, 20 September 2010

EPA lead renovation requirements in effect; certification enforcement delayed

The Environmental Protection Agency (EPA) now requires contractors performing renovation, repair or painting (RRP) projects that disturb more than 6 feet of lead-based paint in pre-1978 homes and child-occupied facilities to be trained and certified in specific work practices designed to prevent exposure to lead-based paint.

On June 18, 2010, following pressure from construction businesses, lawmakers and industry trade groups, EPA announced it would delay enforcement of the RRP certification requirements until October 2010. (Although the final rule implementing the program initially took effect in April, a lack of accredited training providers prevented many contractors from obtaining the necessary certifications.)

The agency stresses, however, that contactors performing work that triggers the lead-safe rule will still be expected to comply with the rule’s work practice requirements during the certification safe harbor. Fines for noncompliance can reach up to $37,500 per day.

Information regarding compliance is available on EPA's Lead RRP resource page. More Here. Contractors doing renovation work in North Carolina should click Here to find local accredited training providers.

Multifamily builders encouraged by rising occupancy

The National Association of Home Builders' Multifamily Market Indices (MMI) show that current and expected demand for rental apartments improved significantly in the second quarter of 2010 compared to the first quarter.

The current indexes for Class A, Class B and Class C apartments rose to 59.5, 57.6 and 56.6, respectively, increases of more than 15 points when compared to the first quarter and the highest level since 2007. Builders' expectations for demand in the next six months increased to similar levels.

The MMI measures multifamily builder sentiment based on production and occupancy at the current time, as well as builders' expectations for conditions over the next six months. An index number greater than 50 indicates that the number of builders who view conditions as getting stronger outnumber those who view conditions as becoming weaker.

The current production index for market-rate apartments, at 34.4, rose from the 30.1 reported a quarter earlier, but increased significantly when compared to the same period a year earlier (16.7). For lower-rent units, the current production index slipped from the first quarter to the second quarter (35.4 to 32.8), yet was an improvement over the 21.8 reported a year earlier.

The current production index for condominiums for sale sank to 14.5 from 21.5 the previous quarter, to about the same level it stood a year earlier (15.2). Builders' expectations for starts six months from now are at similar, but slightly higher, levels for all three categories.

"Lenders have been unwilling to fund multifamily development, because the inventory of rental housing expanded from traditional multifamily communities to foreclosed and investor-owned single-family homes made available for rent as a means of creating a temporary cash flow until the homes can be sold," said David Crowe, NAHB's Chief Economist. "As the supply of additional units declines and pent-up household formations re-emerge when the labor markets improve, demand for traditional rental apartments will rise. It is possible that the supply of new units will not arrive in time to meet the emerging demand and some shortages will occur in some markets. Even in robust production years, it is only possible to increase the stock of rental units by a relatively small percentage through new construction." Read More

Friday, 17 September 2010

Construction materials prices signal lack of demand

Prices for construction materials edged up 0.2 percent in August, according to the September 16 producer price index (PPI) report by the U.S. Labor Department. Prices are 3.6 percent higher than one year ago, observed Associated Builders and Contractors (ABC) Chief Economist Anirban Basu.

“The data support the notion that the nation's recovery in nonresidential construction is beginning to stall,” said Basu. “For three consecutive months, prices for softwood lumber, iron and steel have been in decline, signaling a growing lack of demand."

Nonferrous wire and cable prices increased 1.8 percent for the month and are up 8.7 percent compared to August 2009. Prices for plumbing fixtures and fittings were up 0.6 percent in August and up 1.2 percent from the same time last year. Prices for concrete products inched up 0.5 percent for the month, but are down 1.1 percent from August 2009 levels.

Softwood lumber prices slid for a third straight month, down 3.1 percent in August. However, prices are still 6.8 percent higher on a year-over-year basis. Iron and steel prices were down 1.5 percent in August, the third straight monthly price decrease. But, prices are still 18.2 percent higher than they were one year ago. Steel mill product prices were down 3.9 in August, but were still up 17.1 percent from last August. Prepared asphalt, tar roofing and siding prices slipped 0.9 percent in August, but were up 8.6 percent over the last twelve months. Prices for fabricated structural metal products decreased 0.2 percent for the month, but were up 2.8 percent compared to August 2009.

Analysis

“The U.S. Department of Labor data is consistent with broader data regarding homebuilding activity in the United States, and is consistent with ABC's construction backlog indicator which indicates that stimulus-induced momentum is beginning to wane," Basu observed.

“The data is also consistent with the notion that inflation remains of little concern in the near-term. While it is true that finished goods prices rose 0.4 percent in August, this largely appears to be a reflection of commodity price increases from prior periods,” Basu said. “Pricing power, including for construction materials, remains weak and there is little reason to believe that prices will rise significantly in the months ahead.” Read More.

Thursday, 16 September 2010

UNC Charlotte economist predicts bumpy road ahead for NC

The North Carolina economy is likely to grow this year, but the recovery will remain uneven and jobs will remain scarce, economist John Connaughton said during his quarterly economic presentation, delivered at UNC Charlotte's uptown campus.

The Charlotte Observer reported Connaughton expects the state's economy to increase 0.8 percent over 2009. That's a downgrade from his earlier reports: In June, Connaughton predicted 2.2 growth; in March, he said the state's economy was likely to grow by 3.5 percent over 2009.

"The national economy has been able to put together four consecutive quarters of expansion, while the North Carolina economy has struggled to put two quarters of growth together," he said.

Even anemic growth has helped stem job losses, but it's not yet enough to generate job growth, Connaughton said. That means unemployment, which has long troubled the Charlotte region and the state, will remain inflated.

"Although there is little likelihood of a double dip (recession) during the second half of the year, the economy will continue to be sluggish enough that, to many people, it will feel like a return to the recession."

Connaughton expects N.C. businesses to add 37,400 jobs this year, up 1 percent from 2009. Those gains follow a loss of more than 282,000 jobs statewide during the recession.

The N.C. unemployment rate, which began the year above 11 percent and has since dropped to a seasonally adjusted rate of 9.8 percent, is expected to drop to 9.4 percent by the end of the year, he said.

Looking ahead to next year, Connaughton expects the state economy to grow 2.7 percent. He predicts output increases from seven of the state's 11 economic sectors, including retail trade and finance. Companies across the state could add 19,700 more jobs in 2011, but job growth will probably lag for the foreseeable future, he said.

"It is likely to take four or five years to regain the lost jobs," Connaughton said. "Job growth will be the biggest problem for both the U.S. and North Carolina economies over the next several years." Read more.

Wednesday, 15 September 2010

OSHA: No Holds Barred

Courtesy of Brad Hammock, Partner, Jackson Lewis Law Firm

In what is certainly one of the most active periods in OSHA's history, the agency is using every tool at its disposal to ensure that employers are in compliance with OSHA's standards and rules. OSHA is pushing forward with new rules, enforcement initiatives, interpretive letters, media initiatives, and so forth, at an unprecedented pace.

A recent review of OSHA's website demonstrates the variety of means the agency is utilizing to handle safety and health issues. New rules such as OSHA's Cranes and Derricks in Construction rule are highlighted, as are the several new enforcement measures implemented by the agency: the Severe Violators Enforcement Program; the Administrative Penalty Bulletin; and the OSHA Training Standards Policy.

In a somewhat new approach, the website also highlights "Industry Alerts," which are alerts of safety and health issues focused on specific industries. And these initiatives do not even include the various news releases and multi-media presentations available on the website, or the 36 letters of interpretation that have been issued so far this year.

Employers must match this activity level and be especially vigilant to ensure that they know the latest positions of the agency on safety and health issues relevant to their worksites. Read More.

Monday, 13 September 2010

McColl bullish on future for Charlotte and its 'rich uncles'

Former Bank of America Corp. chief executive Hugh McColl Jr. paints an optimistic picture of Charlotte’s future, including his outlook on its two big banks, the Charlotte Observer reports.

As the financial crisis shook Bank of America and led to the sale of Wachovia, McColl was fond of saying that the city’s two “rich uncles” had died and that the city needed to learn to do without them. But he told told a gathering of businesspeople snd government officials last Friday that he was happy to report that he had overstated the case.

“The good news is they weren’t dead,” McColl told the audience at Carmel Country Club. “They were just in intensive care. They’re back making money again…and both of them are contributing mightily to our city as we have seen in their philanthropy throughout the last two years when we really needed it.”

Still, McColl said Charlotte is like a city that lost a military base and is now searching for the way forward. He listed a number of positive attributes that he said will help the city, including a single county school district that prevents wealthy families from branching off on their own and leaving disadvantaged students behind. He also praised the city’s burgeoning arts and pro sports scene, a contrast to the landscape that greeted him in 1959.

Charlotte “was singularly the most boring city in America or anyplace in the world that I had been,” said McColl, 75, who has long promoted uptown development.

Going forward, the city should be buoyed by its livability, its energetic youth and the creation of new businesses, he said. “The real issue for us now is to forget about the two rich uncles, and let’s get up and go do it,” he said.

As for the economy, McColl, who retired as CEO in 2001, said consumers and businesses are still in the process of paying down their debt and adjusting their lifestyles to fit their income. Before the nation’s overhang of unsold homes can be cleared, he said prices need to hit a “market-clearing” level.

“Until we get there, its not going to be over,” he said. “That is a painful thing.”
McColl said artificial support for the housing market such as first-time homebuyer tax credits only delays this process. “We need to let the market solve it,” he said.

Asked in a question-and-answer session what advice he would give President Barack Obama on the economy, McColl said he has already told Obama that the country needs a tax credit that encourages investments in small businesses. McColl, who co-founded a namesake investment bank in 2001, said U.S. businesses also need certainty about the tax code so they can plan for the future. Congress is expected to debate whether to renew tax cuts enacted during the Bush administration. Read more.

Subcontractor group calls for bid listing on Federal construction projects

The American Subcontractors Association (ASA) urged General Services Administration rulemakers, who are finalizing rules to increase transparency in federal contracting, to require bid listing. See comments.

ASA believes that prime contractors should be required to list first tier subcontract information with their bids, rather than after the prime contractor is awarded the contract. This practice, known as bid listing, gives contracting officers the information they need to effectively oversee projects and be good stewards of taxpayer dollars from day one.

With bid listing, agencies will be able to demand greater accountability before the contract is signed. Further, taxpayers will have access to more information that will allow them to demand greater fiscal discipline.

Under the interim rule that is currently in effect, contractors must submit first-tier subcontract information one month after contract award.

“This interim rule only puts a deadline on bid shopping and bid peddling," ASA notes. In addition, the subcontractor organization continues to seek congressional support for federal legislation, H.R. 3492, which would mandate bid listing on federal construction projects valued at $1 million or more.

For more information on bid listing and H.R. 3492, click Here.

Friday, 10 September 2010

Transportation investment proposal will give needed boost to hard-hit construction industry

On Sept. 6, President Obama called on Congress to enact legislation providing $50 billion as the initial investment in a six-year construction program. The president said the funds would be used to rebuild and modernize the country’s energy and communications infrastructure, air-traffic control system, roads, railways and runways. Read the president’s speech at www.whitehouse.gov.

In response to the president's proposal for new transportation investment, the Associated General Contractors of America noted that countless thousands of construction workers will have a better chance of retaining their jobs, but that the most effective sequel to the stimulus is passage of a fully funded six-year surface transportation bill.

The transportation investment proposal, while needed, is no substitute for long–overdue six–year surface transportation bill, observed association head Stephen E. Sandherr.

"The President clearly appreciates that the infrastructure–focused portions of the stimulus were effective in boosting employment and helping rebuild America's aging infrastructure. And while the most effective sequel to the stimulus is passing a fully funded six–year surface transportation bill, countless thousands of construction workers will have a better chance of retaining their jobs thanks to this proposal than they otherwise would once the stimulus runs its course."

"Like others, we are anxious to learn more details about the President's proposal, and hope that this proposal receives the bipartisan consideration and support investing in our country's economic infrastructure ought to merit. After all, the American people are counting on both parties to begin tackling the nation's $2.2 trillion infrastructure deficit."

"Meanwhile, we will continue our vigorous work in support of swift passage of the fuller, long–overdue, surface transportation bill," Sandherr added.

On Wednesday the association held a "Sick of Aging Roads?" event in Des Moines, in collaboration with the U.S. Chamber of Commerce and other groups involved in the Americans for Transportation Mobility and the Transportation Construction Coalition. Read More.

Read the president’s speech Here.

Thursday, 9 September 2010

CAGC urges Congress to pass highway and transit bill

The Carolinas Associated General Contractors (CAGC) and the Associated General Contractors of America (AGCA) co-hosted a South Carolina Highway Reauthorization press conference in Columbia to urge Congress to pass a new six-year highway and transit bill.

"We need to pass a transportation bill that will put people to work shoring up our aging infrastructure," said Congressman James Clyburn. "Enacting a comprehensive transportation law will be the best boost we can give to the economy right now while we improve the safety and security of our roads and bridges."

At the same time a national effort to push for long-delayed legislation to provide federal funds to fix aging roads and unsafe bridges also launched, with the unveiling of new highway billboards. The campaign, to cover dozens of states this fall, is designed to educate the public about why passing a federal transportation bill is essential to improving road conditions.

The press conference, held at CAGC member Sloan Construction's asphalt plant in Columbia, featured Brian Turmail, AGC's Executive Director of Public Affairs; Rep. James Clyburn; Randy Snow, United Infrastructure Group; Otis Rawl, SC Chamber of Commerce President; Rick Todd, SC Trucking Association President; and Leslie Hope, Director- SC Government Relations and Divisions for CAGC.

"You would expect that as South Carolina's roads age, the men and women who work on them would be at their busiest," remarked CAGC's Hope. "Unfortunately, they're being held back by the fact that the federal highway and transit funding bill that provides over 80 percent of the state's surface transportation budget is eleven months late."

"The reality is our communities can't thrive and our businesses can't grow if they are saddled with potholes and unsafe bridges," added AGCA's Turmail. "The best route to a better transportation system for our country lies in getting Congress to do its job and pass the months-late highway and transit bill."

More than 75% of commercial and industrial construction (buildings, highways/bridges, utility facilities) in both North and South Carolina is performed or supported by CAGC members. Read more Here.

Wednesday, 8 September 2010

Contractors add 19,000 jobs in August

Reed Construction Data reports the August U.S. construction job count is nearly identical to March of this year. "All of the differences in monthly job counts net out to -1,000 jobs over the last five months," writes RCD Chief Economist Jim Haughey.

“No change” was the expected trend over this period. When there is no trend, either up or down, the unavoidable statistical noise seems large and can be misleading. Interpret the construction labor market as signaling that the construction recession is over but that the recovery has not yet begun.

The August jobs report was weak but still positive for the overall economy. Private employers hired 67,000 workers, 40,000 less than in July, 114,00 temporary Census 2010 workers were laid off, state and local governments dropped 10,000 people and the federal government hired 3,000 people. The job details present a mixed picture of economic prospects. The state and municipal job cuts will be a drag on the rest of the economy for next year. The recent $26 Billion grant from Congress to selected recession weaken states is not enough to reverse this trend. The decline in private hiring confirms that the summer economic slowdown is real although not as bad as some feared. Manufacturers cut 27,000 jobs.


6,000 were in machinery and equipment markets consistent with an earlier drop in equipment orders. This is likely a quick adjustment to reduced orders during the weak period in the economy and not a trend reversal. Motor vehicle manufacturers dropped 21,000 jobs. The job count in this industry is very volatile. But 21,000 is a big cut, especially since GM skipped much of the usual August shutdowns for model year change machinery changeovers. Offsetting this sour note, temporary help services hired 17,000 people after no net hiring in July. Read more.

Tuesday, 7 September 2010

'Buy American’ requirements effective Oct. 1 for new stimulus construction contracts

Effective October 1, 2010, contractors that enter into new construction contracts funded by the American Recovery and Reinvestment Act will be required to use only “iron, steel and manufactured goods used as construction material” that are produced or manufactured in the United States. Federal contracting officers may waive the requirements when American-made materials are not available in sufficient quantity and quality, or in instances where materials are unreasonably expensive.

For more information, contact the American Subcontractors Association at (703) 684-3450, Ext. 1333, or GovernmentRelations@asa-hq.com.

Friday, 3 September 2010

NC construction surety bonding law

Guest post from Danielle Rodabaugh, a principal for Surety Bonds.com. Courtesy Construction Law in North Carolina blog.

Reliable professionals working in the construction industry want to guarantee the quality of their work to their clients, and that’s where surety bonds come in. In construction, contract bonds are a type of surety bond utilized to ensure that professionals follow regulations and make appropriate decisions while working on a project. Construction bonds typically protect the client and work similarly to insurance.

Bid Bond Issues in North Carolina

Bid bonds guarantee a developer that—if selected—a contractor will agree to work on a project for the amount proposed in the original bid. This guards against contractors who might try to increase their bid on a project after being contracted by the developer. With a bid bond in place, the developer may collect appropriate reparation if the contractor breaks the bond’s terms. If such a situation arises, the resulting compensation is typically calculated by how much more the developer has to pay to contract the next-lowest bidder for the project. If the contractor does not have the ability to adequately compensate the developer the surety becomes responsible for paying reparation up to the bond’s full value.

Although North Carolina state law does not require the use of bid bonds on either private or public construction projects, a developer may still choose to require them as an added form of protection. According to N.C. Gen. Stat. s. 143-129, which outlines the procedure for letting of public contracts, North Carolina contractors must provide an upfront deposit in the amount of 5% of the total bid when submitting their bid. The language explains that a contractor may choose to provide a bid bond in lieu of making the required cash deposit. Bid bonds can be especially helpful for new contractors who may not have the necessary cash on hand for the collateral, as the surety would financially back the contractor’s bid.

Performance Bond Issues in North Carolina

Contractors secure performance bonds to guarantee that they will perform all aspects of a project as outlined in the contract. Should the contractor fail to complete the project satisfactorily, the performance bond allows the developer to regain appropriate compensation. If the contractor cannot pay the reparation then the performance bond instructs the surety to step in. Depending on the situation, the surety might be responsible for paying retribution up to the bond’s full face value for any extra fees incurred as a result of the contractor’s incomplete work.

Performance bonds are not required for private projects in North Carolina, however some regulations mandate their use for certain public ones. For example, the use of performance bonds is required when any government entity enters into a construction contract in an amount more than $100,000. Furthermore, they are also required for any other public construction project that exceeds $15,000, no matter the developer or specific contract. Additionally, any developer has the right to require a selected contractor to get a performance bond prior to a project, which especially benefits the developers of private projects or smaller projects that cost less than $15,000. All state-mandated performance bonds must be issued for 100% of the project’s contracted cost.

Payment Bond Issues in North Carolina

Payment bonds are put in place to make sure that contractors will pay all labor and material costs as outlined in the contract. Because mechanic’s liens—which ensure payment of outstanding debts upon sale of a property—can only be used on private property projects, payment bonds are essential to making sure that all bills are paid in full. Subcontractors (or other workers) can make a claim on the bond if a contractor does not make the appropriate payments, allowing them to recover deserved compensation.

Simply put, payment bonds are required on all projects that mandate the use of performance bonds. North Carolina General Statute 44A-27 explains that any professional working on a bonded project who is not paid for his labor within 90 days has the ability to make a claim on the bond. Private projects in North Carolina do not require the use of payment bonds, although these individuals may elect to use them at their own discretion. This goes to show that although bonds are not always be required in North Carolina, they are most certainly enforced. Oftentimes this means that individuals working within North Carolina’s construction industry must take the initiative to utilize construction bonds. Read more.

Thursday, 2 September 2010

Lumber, metal and gypsum lead July construction materials decline

Reed Construction Data chief economist Jim Haughey reports the economic slowdown caused another decline in the construction materials price index with a 1.1% fall in July. The largest declines were for steel, copper, lumber and gypsum products.

Most construction items experienced price declines in July. The only significant price increase from June was a 1.2% rise in construction equipment rental rates. This is more likely random than a new trend and may be due to the impact of the Gulf oil cleanup since oilfield equipment is included in the index.

Underlying economic trends still suggest that construction materials prices will rise much faster than overall inflation through 2011 but the June-July price declines were expected after the end of the tax credit boost to the housing market.

Pricing will be weak for several more months with further small declines likely. However, the summer price reprieve for construction materials will be brief. The rapidly expanding world economy is raising all commodity prices and the depreciating $US dollar is further adding to US commodity prices. The price index for construction materials will rise as much as 6% this year while overall inflation remains near 1%.

The most ominous item in the July price report was the 7.5% rise in iron ore prices after a year of stable prices. Ore prices have doubled outside the US in recent months as suppliers moved from annual price negotiations to pricing based on current market conditions. The isolated US market has felt little impact so far from this pricing change but the impact will be felt quickly when a stronger US economy needs much more imported steel.

Click Here for the full RCD analysis.

Wednesday, 1 September 2010

NC construction jobs drop in 12 metro areas

Construction employment declined in twelve NC metropolitan areas between July 2009 and July 2010, according to a new analysis of federal employment data released today by the Associated General Contractors of America. The employment figures demonstrate the widespread decline in demand for construction services that continues to outpace stimulus–funded work, association officials noted.

“There is no doubt that we have seen an increase in stimulus activity this summer,” said Ken Simonson, the association’s chief economist. “Unfortunately, that increase in stimulus activity is largely being overshadowed by continuing declines in overall demand for construction that are likely to persist well into next year.”

Simonson noted that the Charlotte-Gastonia-Rock Hill area lost more construction jobs (7,000 jobs, 16 percent) than any other metro area in the Tar Heel state. Other areas experiencing large declines in construction employment included Durham-Chapel Hill (1,200 jobs, 14 percent); Raleigh-Cary (3,600 jobs, 12 percent); Rocky Mount (300 jobs, 11 percent); Burlington (300 jobs, 11 percent); Wilmington (900 jobs, 10 percent); and Hickory-Lenoir-Morganton (400 jobs, 10 percent).

All twelve NC metro areas in the AGC report lost construction jobs over the past 12 months. The Fayetteville area lost the fewest construction jobs (100 jobs. 2 percent). The Greenville metro area lost 200 construction jobs (6%).

“As much as we would hate to see how much worse the construction employment figures would be without the stimulus, the fact is our industry is continuing to suffer even as some areas of the economy have begun to expand,” said Stephen Sandherr, the association’s chief executive officer. “And with regular, long–term infrastructure bills stalled in Congress, it looks like construction workers will have little opportunity to continue rebuilding our economy.”

View construction employment figures by metro area or by rank Here. View updated state–by–state fact sheets about the current state of the construction market Here.