Friday, 29 October 2010

GSA moves to LEED Gold for all new federal buildings and major renovations

The U.S. General Services Administration's upgraded requirement for LEED Gold certification as a minimum in all new federal building construction and substantial renovation projects will move the government's federal inventory into a more sustainable future. By using the Leadership in Energy and Environmental Design (LEED(R)) Green Building Rating System established by the U.S. Green Building Council, GSA can evaluate and measure achievements in sustainable design.

"Sustainable, better-performing federal buildings can significantly contribute to reducing the government's environmental footprint," said Robert A. Peck, GSA's Commissioner of Public Buildings. "This new requirement is just one of the many ways we're greening the federal real estate inventory to help deliver on President Obama's commitment to increase sustainability and energy efficiency across government."

With a portfolio of more than 361 million square feet of space in 9,600 federally owned and leased facilities, GSA's goal is to provide sustainable, healthier, more productive workspaces for the federal workforce, while being a responsible asset manager using taxpayer dollars wisely.

For projects funded prior to FY 2010 that are in design, GSA is requiring that LEED Gold be incorporated into ongoing designs where possible, after considering budget and schedule constraints on the current design and construction contracts. GSA's Facilities Standards will be updated to reflect these changes by the end of calendar year 2010. For GSA's leased properties, the requirement remains at the LEED Silver certification for new construction lease projects of 10,000 square feet or more. For leases in existing buildings, LEED for Commercial Interiors is optional, at the request of the tenant agencies.

For more information, visit gsa.gov/sustainabledesign.

Thursday, 28 October 2010

Construction got safer in 2009

An indicator of construction jobsite safety showed improvement last year, as the number of nonfatal injuries and illnesses—and the rate per 100 workers—declined in 2009, Engineering-News Record has reported.

In its latest annual workplace safety report, released on Oct. 21, Bureau of Labor Statistics said that construction injuries and illnesses on the job were down 22% last year, to 251,000. At least part of the dip in workplace injuries and illnesses can be traced to the drop in construction activity, and thus the number of workers on jobsites.

The better safety yardstick, the industry's injury/illness rate, also went down in 2009, to 4.3 cases per 100 workers, from 4.7 in 2008. More broadly, BLS says that the nonfatal injury rate for all private industry also moved downward last year, to 3.6 cases per 100 workers, from 3.9 in 2008. The overall number of workplace injuries/illnesses dropped by 400,000, to 3.3 million cases.

But the Labor Dept. concedes that its own data may not be complete, because, it says, some companies have not reported all injuries that occurred. Labor Secretary Linda Solis said that the "reported decline" in the injury numbers is "encouraging" and noted that most companies understand the importance of accurate reporting of injuries.

But Solis added, "We are concerned about the widespread existence of programs that discourage workers from reporting injuries and we will continue to issue citations and penalties to employers that intentionally under-report workplace injuries." Read More.

Wednesday, 27 October 2010

Stimulus helping industry, AGC economist says

Spending from the Federal government’s stimulus program is helping the construction industry, albeit slower than many expected. That’s according to Ken Simonson, chief economist of the Associated General Contractors of America.

Simonson spoke last week during an industrywide conference call hosted by Reed Construction Data, an industry information company. He said construction spending has been tailing off since 2006 and is down 10 percent from early 2006.

“We will continue to have less-than-trend growth and that’s bad news for the construction industry,” Simonson said. “State and local budgets will continue to remain under stress. Where a local government may be contemplating building a new library, it’s now down on the priority list. I think we’ll continue to see a lot of holdback on state and local spending.”

Construction-related stimulus spending, which Simonson said is at about $135 billion, includes $49 billion for transportation, up to $35 billion in buildings, $30 billion in energy/technology and $21 billion in water/sewer programs and the environment.

“I do think that the stimulus is helping now and will help more in the next year,” Simonson said. “But there are a few things that are holding it back, such as local prevailing wage laws and tax law changes.”

Simonson said construction spending is expected to rise 3 to 7 percent in 2011; but materials cost is also expected to rise at the same pace.

Contractors have been shedding jobs since 2006. September construction employment is back to where it was in February after slight drops, whereas the market outside the industry has added jobs for nine straight months.

Wages have also slowed, according to Simonson. In 2008, wages rose about 4 percent; now they’re at about 1 percent, Simonson said. Material costs were rising about 8 percent in 2008 and are now rising about 4 percent. Cost for asphalt and concrete materials are remaining steady, he said.

Non-residential construction spending

Although non-residential construction spending is off about 23 percent this year, according to Jim Haughey, chief economist for Reed Construction Data, some parts of the industry may begin to rebound early next year.

The large-scale construction market has been stalled for about the past three years, but highway spending is expected to rise seven percent in both 2011 and 2012, due mostly to gas taxes and stimulus money, Haughey said.

“There are some bright spots,” Haughey said. “But it will be still be several more years before people will say the market is back to normal.”

According to Haughey, hotel construction spending is expected to increase by 1 percent in 2011, but spending will still be below pre-recession numbers.

Big picture

Overall, 17 percent of the industry is out of work, according to Kermit Baker, chief economist for the American Institute of Architects, and that could present problems when the industry begins to shake its downturn.

“We’ve seen a lot of individuals who were previously employed in the industry look elsewhere and find jobs outside of construction,” Baker said. “There could be problems finding workers once employers again begin to look for help.”

Baker said the nation flirted with a double-dip recession over the summer months, but that sentiment is fading. The construction market, however, will see a modest increase in spending in the second part of 2011, Baker said.

“Construction is the last major component of our economy that remains in a recession,” Baker said. Read More.

Tuesday, 26 October 2010

NC contractors can suggest rule changes on 'Good Government' website

Gov. Bev Perdue unveiled a new website that will collect suggestions from all North Carolinians regarding antiquated, outdated or frustrating rules or regulations in need of reform or elmination that are inadvertantly hindering job creation, slowing progress, or hurting local governments and schools.

If your business is being negatively affected or hampered by such a rule or regulation, the NC Sustainable Energy Association suggests you submit your comments and suggestions.

At a press conference, Gov. Perdue highlighted several "problematic" rules that are in the process of being reworked or eliminated. She discussed a rule that currently prevents wind turbines or wind farms from being installed in navigable waters off the North Carolina coast because of a ban on water dependent structures like hotels, which has been on the books for many years. This rule is scheduled to be reworked so it doesn't impact wind turbines at an upcoming meeting of the Coastal Resources Commission.

All of the submissions made via this website will be reviewed by the Office of State Budget and Management followed by appropriate action by Governor Perdue, which could include immediate changes via Executive Orders or recommendations to the General Assembly.

Click Here for more information about the new website.

Monday, 25 October 2010

Executive order puts limit on new state rules

Gov. Beverly Perdue said she'll restrict new rules issued by North Carolina state agencies to carry out state or federal laws, a move she said will prevent bureaucracy from trumping common sense.

In a news conference at a Chatham County elementary school, the Herald Sun reported that Gov. Perdue ordered Cabinet-level agencies to avoid creating new regulations unless they're absolutely necessary or protect the health and safety of citizens.

The governor also said her administration would embark on an annual review of current regulations and initiated a Web page to accept comment on rules. Her executive order taps into a common thread -- government regulates too much or the wrong way.

"If you hate it and it doesn't work in your mind, let us review it and if there's no purpose, we'll get rid of it or we'll fix it," Perdue said behind Perry Harrison Elementary School in Pittsboro. "This is a chance to have your voice heard and to help us bring to North Carolina commonsense together."

Perdue used the school's playground equipment as a backdrop because state childcare regulations previously prevented children enrolled in after-school care programs statewide from using playground equipment at the schools because they had different standards. The General Assembly changed that in 2009.

Cabinet agencies also pointed out two rules that Perdue said are in the process of being reworked. One rule in place could bar wind turbines or wind farms from being installed off the North Carolina coast because they aren't classified as water dependent structures.

Plans also are under way to reduce the amount of bonding money general contractors for state projects must put up to land a state construction project. The bonding levels are higher in North Carolina compared to other states, she said, but that makes no sense when small businesses are struggling to survive.
Read More.

Wednesday, 20 October 2010

Architecture Billings Index is positive for first time in over two years

For the first time since January 2008, the Architecture Billings Index (ABI) indicated a growth in design activity in September, increasing for the fourth straight month. 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 September ABI score was 50.4, up from a reading of 48.2 the previous month. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was also up sharply, moving from 54.6 to 62.3 – the highest mark since July 2007.

“This is certainly encouraging news, but we will need to see consistent improvement over the next few months in order to feel comfortable about the state of the design and construction industry,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “While there has been increasing demand for design services, it is happening at a slow rate and there continue to be other obstacles that are preventing a more accelerated recovery. Still, the strong upturn in design activity in the commercial and industrial sector certainly suggests that this upturn can possibly be sustained.”

Key September ABI highlights

◦Regional averages: Northeast (56.7), Midwest (51.0), South (47.0), West (44.5)

◦Sector index breakdown: commercial / industrial (56.3), institutional (47.9), multi-family residential (47.0), mixed practice (44.2)

◦Project inquiries index: 62.3

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.

Tuesday, 19 October 2010

Military construction projects could be boon for NC subcontractors

General contractor Sundt Construction is seeking subcontractors for a five-year, $750 million construction project at Camp Lejeune and Cherry Point Air Station.

The call is so new that the Tempe, Ariz., company doesn’t yet have it on its website, reports the Wilmington Star-News.

The notice is on the N.C. Military Business Center’s website, where companies and individuals will find an enormous collection of information on military business, contracts, bids, rules and procedures.

The business center and the coordinating N.C. Military Foundation are at the center of a policy by Gov. Beverly Perdue to enhance the military’s business contribution to the state’s economy. That amounted to about $4 billion last year – the second biggest sector after agriculture, and ahead of tourism.

The key word for Wilimington-area companies is sub.

Because these companies and their employees will be working for Sundt and other contractors – and not the military – getting a piece of the action is considerably less complicated than becoming a general contractor.

The process can be done online, Sundt says.

Sundt is specifically targeting North Carolina businesses. And those businesses will be working for Sundt and four other contractors.

“We believe that there is a tremendous opportunity in the eastern part of the state,” Perdue said.

“It appears on its face that it is very hard to break through the existing network of big contractors – that has somebody who knows somebody who knows somebody in Washington that goes back to the ’50s,” Perdue said.

“But they don’t have a lock on the subcontractors.”

“The average subcontractor in the Wilmington area does not fully realize the opportunities that are available through the BRAC reconfiguration,” said Hansen Matthews, partner in the Maus, Warwick Matthews commercial real estate firm. “If they will even slightly change their paradigm they may find a world of opportunities there.”

BRAC is the Defense Base Closure and Realignment Commission, a program that has resulted in a big build-up at Camp Lejeune and encompasses the transfer of the U.S. Army Forces Command and headquarters of the U.S. Army Reserve Command to Fort Bragg. With that come 50,000 more troops and 30 to 35 generals.

“We’ve been encouraging our members in the construction industry for more than a year now, to get actively engaged in the opportunities being offered through BRAC,” Donna Girardot, executive officer of the Wilmington-Cape Fear Home Builders Association, said Monday.

“There are a wide variety of opportunities for businesses offering many different services and products, including subcontractors like builders, electricians, plumbers, landscapers.

“We’ve had a large business come to town and that large business is BRAC. More of our local businesses need to take advantage of it.”

The opportunities to be part of the $750 million in business at Lejeune and Cherry Point are numerous, according the Sundt.

The company will be building barracks, bachelor enlisted quarters and training facilities, Casey Sundt, subcontractor recruiter for the company, said Monday.

“We’re looking for all trades – painters, mechanical, electrical,” he said

Sundt explained that there are set-asides for small businesses, businesses owned by service disabled veterans, woman-owned companies and HUB – historically underutilized businesses.

The troop build-up at Lejeune is essentially over. But the Sundt contract indicates that the spending is hardly finished.

“I do feel certain that businesses across the country are moving to North Carolina,” Perdue said – “little companies who have come to open up little offices around Fort Bragg,” which will be home to 30 to 35 generals. They will be the decision-makers on all manner of things, including a great deal of the business opportunities.

“The construction industry is robust in those communities, and we see expansion of jobs and business. I hope that businesses, via the Military Business Center and the Military Foundation, will seek the opportunity to expand,” the governor said.

The construction industry, which once employed at least one in five people in the Wilmington area, has shrunk to less than half that size, according to William “Woody” Hall, an economist at the University of North Carolina Wilmington.

But the military contracts – hundreds of them are still out for bid – run the gamut from a day spa at Bragg to dredging of waterways.

But he emphasized that “The businesses here in New Hanover can’t wait for Fort Bragg or Lejeune to drive down here to look for us,” said T.A. “Micky” Finn, strategic programs consultant for the Military Business Center in Wilmington. “We need to go up there and look for them. We need to tell them what we can do.”

Lejeune and Fort Bragg are targeting North Carolina companies, Finn said. “Procurement (officers) are using MatchForce.org to look for small business, for work they need to have performed on a local basis,” he said.

Companies and individuals can register on the site to create a profile, access government contracts and purchasing opportunities and find employees.
Read More.

Monday, 18 October 2010

Sustainable energy buzz across NC

North Carolina is leading the Southeast in the emerging new energy economy, reports the NC Sustainable Energy Association. The state's valuable sustainable energy businesses, local community leaders and organizations, educational institutions, and others are ready and eager to start new projects to make us a national leader. Below are just a few of the recent major announcements and innovations from across our state.

--OFM, a furniture import business in Holly Springs, has installed a 250kw solar rooftop system with hopes of installing additional solar projects on its other warehouses in the Triangle.

--The City of Raleigh has announced plans to install a large-scale solar array on the roof of the Raleigh Convention Center. The City has received several bids in response to its RFQ and hopes to start construction in January with the new solar project generating electricity by the spring of 2011.

--A consortium of Charlotte businesses, property owners and political leaders have commited to reduce energy use in uptown buildings by 20% over the next five years as part of the Clinton Global Initiative held recently in New York.

--Progress Energy has reached an agreement to buy power produced from landfill gas at a new gas-to-energy facility to be built at the Wayne County Landfill. The facility is scheduled to begin operation by the end of 2010.

--House of Raeford Farms in Rose Hill, NC recently installed a solar thermal hot water system behind its hatchery. The 208-panel system will reduce heating costs by upwards of 40% and provide hot water 24 hours a day.

Click here to learn about more recent announcements and innovations across North Carolina.

Construction starts fell 39% in September

Reed Construction Data (RCD) announced that construction starts in September, excluding residential contracts, were 39% below August starts and 28% below last September. However, the year-to-date value of construction starts through September, excluding residential contracts, totaled $193.4 billion, almost exactly the same as in the first three quarters of 2009.

September is a seasonally normal month for construction starts so the seasonally adjusted monthly drop from August was about 25%. September starts were only marginally higher than in June 2009, the low point for starts in this building cycle.

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 September starts drop more than offsets the (revised) 20% starts gain in August. Some of the September decline is due to concern about the summer slowdown in the economy but most of it is probably due to random measurement error. Preliminary data suggest that a similar huge decline did not occur in September residential starts.

The largest September versus August declines were for highways and bridges (-$2.8 billion), education (-$2.1 billion) and water, sewer and civil projects (-$1.5 billion). Government office starts also fell significantly (-$0.5 billion). Developer-financed starts fell $1.4 billion in September. But except for the small hotel market, the monthly decline was mostly seasonal or the reversal of large August gains. Read More.

Sunday, 17 October 2010

Pending home sales continue to improve

The National Association of Home Builders reports the Pending Home Sales Index (PHSI) compiled by the National Association of Realtors® (NAR) indicated that contracts signed on existing homes gained 4.3% in August, following a 4.5% rise in July. This signals that the payback period associated with the expiration of the home buyer tax credit is now behind us.

The upturn in the PHSI was consistent across all regions except the Northeast, with solid growth in the South (6.7%) and West (6.4%) and a modest gain in the Midwest (2.1%). The Northeast declined 2.9%.

The PHSI is based on contracts signed, while existing home sales are based on closings. The NAR advises that existing home sales typically lag the PHSI by one to two months.

The latest data are “consistent with a gradual improvement in home sales in the coming months,” according to Lawrence Yun, NAR chief economist, but the “pace of home sales recovery still depends more on job creation and the accompanying rise in consumer confidence.”

At present, consumer confidence is glum, with both the Conference Board Consumer Confidence Index and the University of Michigan Consumer Sentiment index down in September. Despite a modest gain in August, the indexes has been trending noticeably downward since the middle of second quarter because of consumers’ concerns about the economy and the weak job market.

With the economy and employment expected to improve in 2011 and 2012, NAHB expects consumer confidence to improve and housing demand to gather some positive momentum.

By the fourth quarter of 2012, NAHB anticipates that existing home sales will return to normal, pre-recession levels. The four-week moving average of applications for mortgages already has risen over the last six weeks for purchase-only conventional mortgages, and for five of the last six weeks for all purchase-only mortgages.
Read More.

Friday, 15 October 2010

Prices for construction materials down in September

"The September's producer price index (PPI) contains a number of contradictory elements,” reports Associated Builders and Contractors Chief Economist Anirban Basu. “On one hand, the weakness of the dollar and the impact on certain commodity prices is becoming increasingly apparent."

Construction materials prices were down slightly in September falling 0.1 percent, according to the PPI report by the U.S. Labor Department. Prices were also down 0.1 percent for the quarter, but up 3.8 percent from the same time last year.

Leading the declines, prices for prepared asphalt, tar roofing, and siding fell 1.9 percent in September – the second monthly decrease – but were up 1 percent for the quarter and 2.4 percent higher over the last twelve months. Softwood lumber prices decreased 1.3 percent for the month and 7.5 percent for the quarter, but were up 4.7 percent on a year-over-year basis. Prices for fabricated structural metal products edged down 0.1 percent for the month and are down 0.3 percent for the quarter. However, over the past twelve months, prices for fabricated structural metal products were up 2.8 percent. Nonferrous wire and cable prices slipped 0.7 percent in September but were 0.3 percent higher for the quarter and up 7.3 percent from September 2009.

In contrast, iron and steel prices jumped 2 percent in September, the first monthly increase since May. Iron and steel prices were down 1.8 percent for the quarter, but up 16.5 percent from the same time last year. Steel mill product prices were up 1.2 percent for the month, down 4.1 percent for the quarter, and up 13.8 percent year-over-year. Prices for plumbing fixtures and fittings inched up 0.1 percent in September, up 0.9 percent for the quarter and 1.4 percent higher over the past twelve months. Concrete product prices were unchanged for the month and up just 0.3 percent in the third quarter. Still, concrete product prices are down 0.8 percent from September 2009.

Crude energy prices dipped 8.8 percent in September due to a 19.7 percent drop in natural gas prices. For the quarter, crude energy prices were down 4.2 percent, but were up 14.4 percent compared to September 2009. Overall, wholesale goods prices increased 0.4 percent in September and are 4 percent higher from a year ago.

“Finished goods prices also rose, up 0.4 percent for the month, and 4 percent from a year ago. However, natural gas prices tumbled 19.7 percent last month. The ongoing weakness in natural gas prices remains a bit of a mystery given the general increase in energy and other commodity prices in recent months,” said Basu.

“All of this is a bit unsettling for contractors looking for price stability. While construction materials prices were down slightly in September, a deeper look into the data reveals significant volatility in prices," Basu said. Contractors should anticipate fluctuation in construction materials prices in 2011," he added.

To view the ABC Economic Update, click here.

Thursday, 14 October 2010

Carolinas contractors report lower expectations for economic improvement in 2011

While the overall Construction Barometer score trended upward by one percent in the second quarter 2010,Carolinas AGC contractors reported diminished expectations for significant improvement in business conditions in the coming year. A slight dip in spring activity was offset by falling materials costs, lower overall construction supply costs, and record-low interest rates.

Continuing fiscal stress across the region's state and local governments, along with the diminished federal stimulus spending, worked to suppress the level of public highway and utility projects usually observed during second quarter. Contractors reported that they expect the low level of public works construction to continue into 2011, which largely accounts for much of the diminished expectations for overall growth in 2011.

Contractors also reported stable-to-falling labor costs, and a slight uptick in hiring, particularly in the area of skilled and semi-skilled labor. The brief early summer hiring uptick appears to be seasonal and project-specific related, however, rather than indicative of a new and sustainable trend in the construction labor market.

On the financing front, contractors reported continuing record-low interest rates for both short- and long-term borrowing, but virtually no contractors reported placing new loan applications.

In short, while industry conditions for 2011 aren't expected to significantly weaken from their present position, they aren't expected to show much improvement, either.

Industry trends in both Carolinas were similar in the second quarter, with falling construction costs, dimming expectations for growth in 2011, and a plentiful supply of skilled labor. NC contractors reported a modest uptick in second quarter hiring, while SC contractors reported no change. However, while NC contractors are growing more pessimistic about industry trends in 2011, South Carolina contractors are a bit less pessimistic than their neighbors to the north.

In both states, falling materials costs, stable-to-falling labor costs, and a constant level of highway and utility spending were reported. Both states expected a slight increase in highway spending before year's end, but that uptick is expected to be exhausted before the new year arrives. Increased highway spending is expected to be stronger in NC than in SC, which may explain the slightly different labor market demand.

Financial market conditions differed slightly across the two states as well. South Carolina contractors reported easier credit terms from regional bankers, while North Carolina contractors reported a modest tightening in the availability of credit and banker willingness to underwrite new contractor loans.

The uptick in the demand for skilled labor evident in the overall Barometer score was entirely attributable to industry hiring in the Heartland, which contains the three major urban areas of North Carolina and accounts for the bulk of metropolitan commercial construction projects in the state. Virtually all of the state's growth in construction activity, the driver for increased labor demand, occurred here, with a number of urban building projects and public works construction efforts. Unfortunately, the uptick is likely to be transitory, as contractors reported diminished expectations for industry growth in 2011.

At the same time, NC contractors reported little in the way of materials cost inflation, rising labor rates, or increased materials supply prices. All of these variables as well as the labor supply are expected to remain quite stable throughout 2011. Equipment prices are expected to remain quite reasonable, although projected demand for heavy equipment is minimal.

While business conditions for contractors showed modest improvement in the Western North Carolina region, Eastern region contractors reported a downturn in construction activity for the quarter. In both regions, however, contractors expressed greater pessimism regarding the strength of industry conditions ahead for 2011. As a consequence, the demand for skilled labor deteriorated in both regions, and falling demand for labor created a surplus of workers looking for jobs in both regions. Consequently, wage rates and materials and supply costs were down. Clearly, the unexpected rise in materials costs observed in spring didn't extend into the summer.

Credit conditions for contractors eased marginally in the West, while Eastern contractors reported greater difficulty obtaining both short- and long-term credit from area bankers. In keeping with increased contractor pessimism regarding the level of business projected for 2011, panelists expect banks to tighten lending approval rates for contractor borrowing requests in the year ahead. As a consequence, Western contractors significantly reduced their plans to buy new heavy equipment next year, while equipment demand in the East remained basically unchanged from the early months of 2010. Read More.

Saturday, 9 October 2010

Construction industry unemployment at highest September rate ever recorded

According to an analysis of federal employment figures released by the Associated General Contractors of America, the number of people working in construction is approaching a 14-year low. The industry lost 21,000 jobs in September, while construction unemployment is at a September high of 17.2 percent.

The construction industry continues to suffer from declining investments in construction and broad uncertainty about the future of many federal infrastructure programs and tax rates, association officials noted.

“It has taken less than four years to erase a decade’s worth of job gains as the industry suffers from declining private, state and local construction demand,” said Ken Simonson, the association’s chief economist. “No other sector of the economy has suffered as much for as long as construction.”

Simonson noted that the 5.6 million people working in construction today is barely higher than the 5.59 million people who were working in construction in August 1996. He added that construction employment continued to lag behind other sectors of the economy. For example, while total private employment rose by 593,000 during the past 12 months, the construction industry lost 210,000 jobs. Meanwhile, the industry’s unemployment rate is nearly double the unadjusted national rate of 9.2 percent.

Most of September’s construction job losses came from the nonresidential sector as demand for commercial facilities and infrastructure projects remains weak, Simonson noted. Residential construction lost 2,500 jobs last month while nonresidential construction lost 18,100 jobs. Nonresidential specialty trade contractors were the hardest hit, having lost 19,500 jobs in September, the economist added.

Association officials noted that construction spending figures released late last month show private, state and local construction spending continues to decline. And while federal spending has increased, most of those investments have come from temporary programs like the stimulus and military base realignment programs.

While these temporary federal programs have helped the industry, many contractors are reluctant to expand payrolls while long-term federal programs that fund highway, transit, water system and aviation related construction remain in limbo, association officials said. They added that most contractors don’t even know what their tax rates will be for next year.

“Construction firms aren’t going to start hiring again until they can predict how busy they’ll be,” said Stephen E. Sandherr, the association’s chief executive officer. “Frankly it is hard for contractors to make any business decisions when they don’t know how much they’ll make or how much they’ll owe.”
Read More.

New Facebook 'groups' could have potential for construction marketing

Guest blog by John Jantsch, Marketing Consultant, Duct Tape Marketing

Facebook rolled out a few unpredicted changes last week with an eye of getting users to communicate with friends in new ways. Probably the most important announcement was the Facebook groups function. Facebook CEO Mark Zuckerberg stated in the announcement that groups are going to create a fundamental shift in how people use Facebook.

The way groups works is that you now can go through your list of friends and group them – family, work, clients, etc. The reason this has some potential for business is that you can then communicate in unique ways only with group members. You can communicate via email, chat and even post documents to the group privately.

Here are some initial ways I see business putting groups to work.

•If you want to promote your after hours work seminar, you can pinpoint your customer related contacts group and make sure that only they see the invite (and here’s the big deal) via email. (Of course anyone can opt out of a group and I’m sure we’ll see a rise in spammish uses, but I think this could become significant for business.)

•You will see companies create private, customer only groups, and use the platform as a way to share information with this group.

•There’s also a group chat function that could make for some interesting business use as well. I think hosting live chats with your groups on Facebook might prove an effective way to create more engagement on the platform.

•This tool will also surely be used by companies as a way to privately share information internally.

How you create a group

1) Go to groups page and create a group (This function is being rolled out to profile pages so you will be able to create one there as well)

2) Name your group and assign it an email address (grab them now as they email names are first come first serve) – after you set up group hit Edit Group to select an email.

3) Select your privacy settings – you probably want to keep what goes on in the group private but do know that any of your friends will be able to see who is in a group. Read More.

Friday, 8 October 2010

Construction unemployment bumps up to 17.2%

"The employment trend in construction job losses continued in September, as we've witnessed in recent months," reports Associated Builders & Contractors Chief Economist Anirban Basu. "It was the nonresidential specialty trade contractors that took the brunt of the losses," he adds.

In a sign that the nation’s builders continue to struggle, the unemployment rate for the construction industry rose to 17.2 percent in September, up from 17 percent in August and 17.1 percent from one year ago, according to the October 8 employment report by the U.S. Labor Department. The construction industry lost 21,000 jobs in September while still gaining 8,000 jobs for the quarter due to a 31,000 job increase in August. Over the past twelve months, the industry has lost 210,000 jobs or 3.6 percent.

Regionally in the latest weekly report, New York, Illinois, Georgia, North Carolina and Tennessee had the largest declines in initial jobless claims. NC has 2,078 fewer jobless claims reflecting fewer layoffs in the construction, industrial machinery, computer equipment, and furniture industries.

Nonresidential building construction gained 1,600 jobs in September. For the third quarter, nonresidential building construction employment gained 3,900 jobs. However, on a year-over-year basis, the subsector has lost 17,200 jobs, or 2.4 percent, as nonresidential building construction employment stood at 686,600 in September.

The nonresidential specialty trade contractor subsector lost 19,500 jobs in September, but was positive with an increase of 11,600 jobs for the third quarter. Still, over the past twelve months, nonresidential specialty trade contractor employment is down by 108,400 jobs, or 5.1 percent. Heavy and civil engineering construction lost 200 jobs in September, marking the first monthly loss since May. Heavy and civil engineering construction gained 18,400 jobs for the quarter and 8,500 since September of last year. Meanwhile, residential building construction lost 1,100 jobs for the month, 10,200 jobs for the quarter, and 37,200 jobs from the same time last year.

Total employment across all industries was down 95,000 in September marking the fourth straight monthly loss as employment shrank by 393,000 jobs from June through September. Year-over-year, total employment is up by 344,000 jobs or 0.3 percent. Private sector employment increased by 64,000 jobs in September, 274,000 in the third quarter, and 593,000 over the last twelve months. Still, 14.8 million people are out of work as the national unemployment rate in September remained flat at 9.6 percent.

Analysis

“The Labor Department’s jobs report for September reaffirmed the established pattern of overall job loss in the public sector in contrast with private sector employment growth,” said Associated Builders and Contractors Chief Economist Anirban Basu. “For the ninth consecutive month, the private sector added jobs, roughly an average of 95,000 per month. Compare that to the 159,000 public jobs that were shed in September, of which 83,000 jobs were lost in state and local government.

“Surprisingly, the nonresidential building construction sector added jobs for the first time since July, though the number of net additions was quite small,” Basu said. “Overall, the September jobs data shows that the U.S. private sector remains in recovery, but that the recovery is quite modest and has yet to bring all key segments of the U.S. economy out of the recession." Read More.

UNC President urges university leaders to focus on repairing existing buildings

Public universities should focus on repairing their existing buildings before pushing for new ones, UNC President Erskine Bowles was quoted in the News & Observer.

Speaking to members of the UNC system's Board of Governors, Bowles said the system's next budget request - to be submitted to state leaders in November - will be austere. New projects won't likely be viewed with favor when the system has more than $2 billion in backlogged repair needs for steam pipes, air conditioning systems, roofs and other infrastructure.

The News & Observer article reported how the UNC system's struggles to fund even a small piece of the repairs and renovations it needs each year. The system needs billions to fix its building stock, even after a decade of construction fueled by a $2.5 billion bond issue that state voters approved 10 years ago. Universities would need $2.1 billion from the state this year to adequately address all of the system's repair and renovation needs, according to UNC system data.

"Certainly we're not going to get anything like that, but it shows you how much deferred maintenance you have," Bowles said, adding that campuses delay repair projects too often. "It's easy to say you can do it next year."

Bowles' comments on the maintenance backlog came during an analysis of next year's budget climate. He's telling campus leaders to prepare for 10 percent budget cuts - a cautionary step as the state deals with a budget shortfall now estimated at $3.5 billion. "I hope it's less," Bowles said. "But the arithmetic is pretty compelling."

Bowles said the system budget will largely fund existing programs. He noted just three new line items he's willing to push for:

--$3.5 million to continue development of a new dental school at East Carolina University.

--$1 million in each of the next two years for a new joint nanoscience program at N.C. A&T State University and UNC-Greensboro.

--Some funding for a new system initiative linking enrollment growth to graduation and retention success.

James Holshouser, the former governor and longtime UNC system board member, said university leaders can't hide from the realities of the budget.

"We're all collectively in denial right now," Holshouser said. "We need to get ourselves ready. Every time I see a request for a new program now, I get a little shiver. I see the folks at [UNC-Chapel Hill] have deferred construction of the law school. I think that's a lesson we're all going to have to learn."

N.C. Central University Chancellor Charlie Nelms said he agrees with Bowles' no-new-construction approach - to a point. But Nelms argues that some new facilities are vital if campuses want to meet certain goals instituted by the system, such as the graduation and retention initiative.

"Take housing. For a school like mine, we know there's a correlation between students living on campus and retention," said Nelms, whose campus still hopes to build one or more residence halls in coming years. "But it's a balancing act."
Read More.

OSHA official disputes NC Labor Commissioner's 'record-keeping' comments

A high-ranking federal OSHA official took sharp issue with recent comments by N.C. Labor Commissioner Cherie Berry, saying her critique of a federal program was "rife with errors."

In a News & Observer story about a federal program aimed at catching employers who try to hide workplace injuries, Berry contended the plan was mandated for all states that do their own workplace safety enforcement.

Deputy Assistant U.S. Labor Secretary Jordan Barab said that's not true. The federal government encouraged those states to participate in the program but did not require it. Berry was under the impression the program was mandatory.

Berry also maintained that the record-keeping program is an "outrageous waste of taxpayer money" - an assertion Barab disputed. Accurate injury statistics help OSHA focus attention on the workplaces that need it most. "The whole point of the record-keeping program is to ensure a good use of taxpayer money," Barab said.

Asked about Barab's comments Berry said there were "clear philosophical differences between me and the current administration."

"We reject their notion that the way to make North Carolina workplaces safer is through higher penalties, 'shaming' businesses through the media, beefing up enforcement, relegating consultation efforts to the back row, and a one-size-fits-all approach," Berry wrote in an e-mail.

"I'll go after the bad apples but we must have consultation, education and training as part of an effective safety and health program."

A recent federal audit found that North Carolina's workplace safety program sometimes downplays serious safety problems, issues lower-than-average fines to violators and fails to properly handle whistleblower complaints.

The News & Observer's story focused on a report about the federal program to crack down on companies that hide injuries. The report, by Washington-based Public Employees for Environmental Responsibility, says the initiative is "plagued by poor design and anemic implementation."

Barab and some other workplace safety experts counter that the program is accomplishing what it set out to do: improving the accuracy of workplace injury records. Read More.

Wednesday, 6 October 2010

Military offers economic bright spot for Southeastern NC

Think of Southeastern North Carolina as a place where high-level economic decisions worth billions are made, where thousands of contractors flow from every corner of the country to get their share, observes the Wilmington Star News.


That's what the massive buildup at Fort Bragg and Camp Lejeune is to the region, according to panelists who spoke at the annual economic outlook conference at the University of North Carolina Wilmington.

"North Carolina has fared very well in each round of BRAC," said Richard McGraw, a former senior Department of Defense official. BRAC stands for Base Closures and Realignment Commission, and the program has resulted in closing or consolidation of hundreds of military installations in the country since it began in the late 1980s.

That has meant big wins for the region. Fort Bragg scores as the U.S. Forces Command moves from Fort McPherson, Ga.

The expansion of Camp Lejeune "is the equivalent of a corporate headquarters moving to North Carolina," said Scott Dorney, executive director of the N.C. Military Business Center.

By 2013, the growth of the military in the region here will produce an additional $1.7 billion in disposable income, McGraw said.

"Where are they going to spend it?" he challenged the crowd, comprising mostly Wilmington-area business people.

When the lights go out in Georgia next Sept. 15, as retired U.S. Army Col. Don Porter put it, there will be 30 to 35 generals, four- and three-star, based at Fort Bragg in Fayetteville. They are the people who will have military contractors lining up; they are the decision-makers.

The military opportunities have arrived amid a local economy whose growth is flat, said William "Woody" Hall, the UNCW economist who forecasts the area's economic picture yearly.

The same is true of the housing market, where prices are still slipping a bit as inventories remain high, said Chris Livengood of Intracoastal Realty. He was part of a real estate panel including Teresa Huffmon of Coldwell Banker Commercial and Ralph Huff of H&H Homes Inc. in Fayetteville.

Huff said that the key to the military home-buying decision is (1) how many minutes to their job on post; (2) the school system; and (3) the location of the spouse's job. He pointed out that some military personnel live in Wilmington because that is where the husband or wife works.

The military market, however, is much more promising outside of real estate, McGraw said.It's not just jets and guns, said Dorney. There's even a contract out for a day spa at Fort Bragg.

The economy

Lending by banks and spending by business are likely to increase somewhat but are heavily influenced by uncertainty over economic and regulatory policy, said Thomas Simpson, executive in residence at UNCW's Cameron School of Business.

Although there is a severe oversupply of homes on the market, "stabilization of prices has given me some reasons for comfort," he said.

The three-county growth rate will remain flat with 2009 and stay that way into 2011, said UNCW's Hall. That rate is less than a third of the annualized growth rate from the mid-1990s through 2007.

Unemployment is not getting any worse, Hall said, but we have a long way to go. The average monthly employment in 2009 was the same as in 2004.

Retail sales figures have been relatively stable over the first five months of the year.

Real estate

Wilmington's commercial real estate market was worth $108 million in 2007, said Huffmon of Coldwell Banker Commercial. Forty percent of that was land sales.

By 2009, the figures had declined to $21 million, she said.

"We're starting to see a slight increase," she said, with a trend toward $34 million for all of 2010.

The residential market is flat, said Intracoastal's Livengood. "It's moving sideways with a slight tendency for prices to continue to decline."
Read More.

Sunday, 3 October 2010

Private nonresidential construction spending slips in August

In a sign that the construction industry is mired in its own recession, private nonresidential construction spending slipped 1.4 percent in August, according to the October 1 report by the U.S. Census Bureau. In addition, private nonresidential construction spending is down 24.2 percent compared to the same time last year. However, total nonresidential construction spending – which includes both privately and publicly financed construction – was up 0.6 percent for the month but down 13.6 percent on a year-over-year basis. Total nonresidential construction spending in August now stands at $562.7 billion.

Associated Builders and Contractors Chief Economist Anirban Basu observes, "We continue to witness the familiar pattern of construction spending growth in publicly financed segments as opposed to the ongoing deterioration in privately financed segments.

Of the eight nonresidential subsectors posting spending declines in August, power construction was down 2.6 percent; commercial construction dropped 2.2 percent; and communication construction fell 1.8 percent. However, on a year-over-year basis, lodging construction is down 52.0 percent; manufacturing construction is down 35.4 percent; and office construction is down 31.4 percent.

In contrast, eight of the sixteen nonresidential construction subsectors posting increases in spending for the month include highway and street, up 5.1 percent; amusement and recreation, up 4.3 percent; and sewage and waste disposal construction, up 4.3 percent. Four subsectors had increases in construction spending compared to August 2009 including conservation and development, up 18.3 percent; sewage and waste disposal, up 18.1 percent; and water supply construction up 7.4 percent.

Meanwhile, residential construction spending was flat in August and down 0.6 percent year-over-year. Total construction spending – which includes both residential and nonresidential construction – edged up 0.4 percent in August, but is down 10 percent from the same time last year.

“Overall, construction spending remains roughly flat in America, but this perspective masks what is truly occurring. Last month, publicly financed construction activities rose 2.4 percent while privately financed activities shrank 1.4 percent. The implication is that privately financed construction remains mired in its own recession,” said Basu.

“The question remains whether or not privately financed construction activities will acquire some positive momentum as publicly financed construction winds down in a number of categories as stimulus package monies are steadily whittled away,” Basu said. “For now, there is no evidence of substantial improvements in the underlying conditions that influence privately financed construction spending, including signs that banks will loosen lending standards any time soon, making it difficult for developers and owners to get financing. In short, the overall construction outlook remains somewhat negative given the anticipated slowing of publicly financed construction."
Read More.

Friday, 1 October 2010

U.S. OSHA audit criticizes Carolinas' workplace safety programs

The Charlotte Observer reports a U.S. Department of Labor audit of workplace safety programs run by North Carolina and South Carolina downplay serious safety problems, issue weak fines to violators and fail to properly handle whistleblower complaints.

South Carolina's problems are so severe that auditors said increased federal oversight may be needed.

The audits, conducted by the U.S. Labor Department, are part of the federal government's pledge to strengthen its oversight of states that run their own workplace safety programs. About half the states - including the Carolinas - run their own programs, which the law allows as long as they are as effective as the federal Occupational Safety and Health Administration (OSHA) in protecting workers.

South Carolina has the nation's lowest average penalties for workplace safety violations, noted Jordan Barab, deputy assistant secretary of labor for OSHA. "We're very concerned that with the low penalty number, they're not presenting a credible deterrent to employers around the state who cut corners on workplace safety," Barab said.

Lawmakers and officials have grown concerned in recent years over the ability of some state-run programs to protect workers. Federal audits conducted this year were more intensive than those done in previous years. Auditors examined case files from October 2008 to September 2009.

Both states praised their low injury and illness rates in written statements and said they work hard to protect employees. Among the U.S. Labor Department's findings:

Both Carolinas impose weak penalties when violations are found - an average $281 per serious violation in S.C., compared with $512 in N.C. and $970 by federal OSHA. North Carolina shaves 10 percent off fines for "cooperation," and state policy "results in lower penalties for serious violations," the report says.

South Carolina cuts fines by 60 percent in exchange for the employer's promise it will improve safe working conditions. But auditors found the state rarely checked to see if problems were fixed, and employers who got the discount were not required to take more steps than other companies to ensure safety.

Compliance officers in the Carolinas understate the severity of problems by misclassifying violations and rarely label problems as "willful" - the most serious degree. N.C. compliance officers issued only one willful violation in 2009 "due to the belief that it would be too difficult to pass the review process," auditors said. South Carolina had five willful violations.

Auditors said of the N.C. program: "Some violations that would most likely have been classified as serious by federal OSHA were classified as non-serious by the state, and some violations categorized as low or medium severity would have been categorized as high severity by federal OSHA." Companies receive higher fines when they are cited for serious or willful violations.

North Carolina lets bureaucrats purge documents from case files when they are closed. Removing the documentation limits the state's ability to review a company's history and properly investigate future violations, auditors said.

South Carolina files, meanwhile, lacked narratives explaining items such as a description of the hazard and didn't have contact information for employees interviewed. The report said the files involving one fatality, for example, "did not provide a complete picture of how the accident occurred."

The federal government took both states to task for failing to properly handle cases involving workers who had complained about their employer. It criticized North Carolina for doing only phone interviews, for example.

The reports show little is being done in the Carolinas to deter companies from shortchanging safety, said workplace safety advocate Tom O'Connor, executive director of the National Council for Occupational Safety and Health. "Unfortunately, sometimes the only way to get people's attention is with a significant dollar fine. And there just isn't an adequate deterrent from the low penalties assessed," said O'Connor, who lives in Chapel Hill. "If discrimination programs are not effective, then workers don't feel able to express themselves and will keep quiet if they find themselves in a dangerous situation," O'Connor added.

The reports, released in the last two weeks, could prove troubling for South Carolina, as auditors noted "inadequate enforcement documentation and state policies that potentially render the program less effective than the federal program."

An S.C. OSHA spokesman, Jim Knight, said in a statement the state is proud of its record in occupational safety and health. "Evaluations during the past eight years indicate that we have exceeded expectations and have an effective state program. Nothing has changed in the program, whether staffing levels or enforcement procedures, since the last evaluation in 2009," the statement said.

N.C. OSHA said in a written response it "will make adjustments that are in the best interest of North Carolina. It appears (recommendations included in the report) are procedural in nature and do not directly impact our workplace safety efforts."

The report noted some achievements for N.C. OSHA, including an increase in the number of health inspections, which are more time-consuming and complicated than safety inspections, and for reaching out to Spanish-speaking workers. Construction deaths also fell to 10 in 2009 from 17 in 2008.

The states must respond to OSHA this month. If states don't adequately address the concerns, federal OSHA can increase its oversight - or even start proceedings to take over a state program. Read More.