Sunday, 28 November 2010

Lejeune ends one record growth year, begins another

In an all-time record infrastructure growth year, Camp Lejeune spent up to $2 million a day in 2010 on vertical construction projects, ENCtoday.com reports.

With a massive influx of troops and families to North Carolina Marine bases due to the 2008 Grow the Force Initiative, the military can’t build fast enough to accommodate the need for everything from new childcare centers and barracks to fitness centers. Two years after about 20,000 additional troops and dependents arrived in eastern North Carolina, many of the projects are finally underway, and that means a construction boom with no end in sight.

According to information from Marine Corps Installations East presented at a military business summit in October, Camp Lejeune, New River and Cherry Point received more than $810 million in Federal Military Construction funding this fiscal year, exceeding 2009’s funding by nearly $200 million. While this is the largest construction year since these installations were built, FY ’11 will set a new record, officials said.

Between construction and renovation of old facilities, opportunities abound for contractors and subcontractors. Scott Dorney, executive director of the North Carolina Military Business Center, said the center is doing everything it can to make sure that in-state and local businesses take advantage of those opportunities.

“The biggest opportunity in 2011 is going to be with the Navy and Marine Corps,” Dorney said. “It has a larger project base than the Army has. It’s also more openly competitive than the Army program.”

Dorney said the center worked with North Carolina companies to provide market intelligence about upcoming projects, offer business counseling about how to submit a winning bid and assist with networking events between prime contracting companies and potential subcontractors.

Dorney said more than $150 million this year went to renovation and restoration projects alone aboard North Carolina bases.

It’s not always easy: Most of the new Marine installation projects call for “green” construction and design, from energy reduction features to low impact environmental concerns. And contracts today, Dorney said, tend to follow a design-build model, where contracting teams are expected to incorporate general contractors and designers.

“In this environment, teaming is very important; and it’s important for companies to use our market intelligence resources to get on effective teams,” he said.

A spokesman for Marine Corps Installations East, Maj. Bradley Gordon, said local companies are hired to complete work whenever possible.

“We would like to go local, because local is easier,” he said. “We try to be good stewards of the community, so we would love for local businesses to be the contractor we choose.” Bids are considered based on a company’s quality of work and ability to complete a project, as well as the asking price, he said.

The president of Jacksonville’s R&W Construction company, Wayne Pierce, said work from Camp Lejeune and other local Marine bases has been steady for the last 10 years. A company that focuses primarily on renovation and repair projects, R&W worked on about 25 base projects priced from $2,000 to $4.5 million this year, Pierce said. “We’re very blessed to be situated here,” he said.

On Dec. 7, NCMBC will hold a subcontracting workshop in Jacksonville with Baltimore-based contractor Whiting-Turner regarding a recently awarded barracks construction contract on Camp Lejeune’s Wallace Creek. The center is planning a similar event in Wilmington in 2011. “With the commercial market being down, there has been more interest and engagement than ever by North Carolina companies in the market,” Dorney said. Read more.

Saturday, 27 November 2010

Facebook fan page seeks local contractors and suppliers for NC data center

Facebook is using its fan page to identify local contractors and materials suppliers who can help build its new data center facility, the Shelby Star reports.

Facebook first announced its new center will be off Old Caroleen Road, near U.S. 74 in Rutherford County. Now the company, through the Facebook page it created for the "Rutherford County Data Center" is soliciting contact information for subcontractors and vendors.

“The Facebook Rutherford Data Center project will seek to provide as many local construction opportunities for workers and companies as possible, and seek to purchase materials locally whenever possible,” the company recently posted on the data center’s page. The data center, which will employ 35 to 45 full-time workers following construction, is set for a March 2012 opening.

“No announcement has been a bigger game changer than this one,” Lt. Gov. Walter Dalton said during the announcement. “Companies are realizing North Carolina is a great state to do business in.”

Facebook suggests companies to contact DPR Construction Inc.,Fortis Construction Inc at Construction@RutherfordDataCenter.com and include any relevant information about your company and services. Read More.

Friday, 26 November 2010

NC construction employment virtually unchanged in AGC analysis

Construction employment expanded in 29 states between September and October, while fewer people are working in construction compared to last year in 39 states, the Associated General Contractors of America reported in an analysis of state employment data released by the Labor Department. North Carolina and South Carolina construction employment remained virtually unchanged, according to the AGC study,

The new figures continue a nearly year-long trend of ups and downs in construction employment as the industry performs stimulus-funded work yet grapples with broad market uncertainty.

“Considering that most states adding construction jobs in October had shed workers in September, it is safe to say that construction employment remains volatile,” said Ken Simonson, the association’s chief economist. “Construction is no longer in free fall, but the industry remains fragile as improvements vary greatly by state and project type.”

North Carolina added 500 construction jobs in October (3.0%). South Carolina experienced a 3.2% increase in construction employment (2,500) during the past month. North Carolina shed 7,700 construction jobs over the year (-4.3%). South Carolina lost 1,300 jobs (-1.6%) over the past year.

Eleven states and D.C. added construction jobs for the year, Simonson added. The largest year-over-year percentage increase was in Kansas, where construction employment rose 9.0 percent (5,100 jobs), followed by Oklahoma (8.1 percent, 5,400 jobs); Arkansas (5.1 percent, 2,600 jobs); D.C. (4.6 percent, 500 jobs); and West Virginia (3.3 percent, 1,100 jobs).

Association officials said that temporary stimulus funding has helped the industry, but that most firms were worried about business levels for next year. They added that private, state and local demand for construction remains weak, while long-term federal infrastructure programs and tax rates remain in limbo. “We won’t see sustained job growth until the private sector picks up and long-term federal plans are clear,” said Stephen E. Sandherr, the association’s chief executive officer.

View construction employment figures by state Here.

Thursday, 25 November 2010

ABC urges Congress to address small business lending

The Associated Builders & Contractors (ABC) sent a letter to the Senate Small Business & Entrepreneurship Committee, urging Congress to immediately address the near freeze on lending for private sector construction projects. The letter was considered during a committee round table discussion on “Small Business Access to Capital: Challenges Presented by Commercial Real Estate.”

In the letter, ABC pointed out that access to capital is a major concern for ABC members and the construction industry, given the unemployment rate of 17.3 percent. Many ABC members have viable low-risk projects and/or contracts that simply need funding in order for work to commence. As the construction industry works toward economic recovery, it is critical that small businesses have access to much-needed funds.

“Small businesses are the backbone of the U.S. economy and give Americans a sense of pride and accomplishment,” the letter states. “Within the construction industry, they provide valuable jobs and play an integral role in building communities. We look forward to working with you as you develop initiatives to promote small business lending.” Click Here to view the letter sent to Congress.

Tuesday, 23 November 2010

Lien law changes ahead?

by Melissa Brumback, Ragsdale Liggett PLLC

Are you familiar with North Carolina lien law provisions? Ever think they should be changed and updated? You are not alone. The NC Bar Association (through the Lien Law Revision Committee of the Construction Section) is in the process of preparing substantive changes to a proposed new Lien Law statute. The committee is aiming to have a prepared piece of legislation drafted for consideration in the upcoming legislative session of the General Assembly.

According to the Lien Law Committee, revisions to the statute are needed for several reasons, including:

--Handling the uncertainty created by recent Bankruptcy court decisions relating to liens


--Reexaming the “relation back” and “double payment” issues in current lien law


--Reexaming the long form lien waivers and current problems with those waivers

I was given a copy of a lien law draft proposal for revision to the lien law. The Lien Law Committee wants their proposals to be discussed by the construction industry, so that all sides can be fully vested in the new lien process.

The proposal contains some rather large changes to the lien statute. Are these good, bad, or irrelevant to your business? Email the Lien Law Committee any thoughts, questions, suggestions, or concerns. Read more.

ABC of the Carolinas announces 2010 Projects of the Year

The Associated Builders & Contractors of the Carolinas recognized ‘the best of the best” general contractors and specialty contractors at the Ninth Annual ABC of the Carolinas Excellence in Construction Award Banquet held November 18 at the Grandover Resort in Greensboro. Two outstanding Projects of the Year were selected from twenty-five Excellence in Construction Eagle Award winners. Also twenty-four general contractors and specialty contractors received Excellence in Construction Merit Awards.

The 2010 GC Project of the Year Award went to the joint venture of Turner Construction Company, BE&K Building Group and Walter B. Davis Company for the NASCAR Hall of Fame complex. Adams Electric Company won the Specialty Project of the Year Award for the East Cooper Regional Medical Center project.

The Carolinas Green Award was presented to Balfour Beatty Construction for outstanding sustainable construction and design practices on the Ritz-Carlton, Charlotte project. General contractor Robins & Morton won the Free Enterprise Award for the largest number of ABC member subcontractors, suppliers and associate members working on the East Cooper Medical Center project. Click Here to see other finalists.

Saturday, 20 November 2010

Falls Lake pollution rules kick in 2011

The state Environmental Management Commission has approved a set of regulations designed to cut nitrogen and phosphorus pollution in Falls Lake. The "nutrient management strategy" will take effect Jan. 15, though it could be amended by the legislature, reports the News and Observer.

Falls Lake is Wake County's largest source of drinking water, but its water quality does not meet state and federal standards for drinking water reservoirs. A 2005 law required the EMC to devise a program to restore and maintain the lake at acceptable quality.

The EMC's regulations affect new and existing development, agriculture as well as sewer and septic treatment and discharge throughout the Falls Lake watershed. They prescribe a two-stage program to put the lower lake, near Raleigh's water intake, in compliance with federal water quality standards within 10 years and the entire lake in compliance within 30 years.

Environmentalists have said that is too long to wait. "The plan is certainly not as aggressive as it should be," Karen Rindge of WakeUp Wake County said after the EMC meeting. "These rules do not ensure that Falls Lake will be clean in the long run."

But local governments that would be covered by the rules have said it will take time and continuous monitoring to determine whether the rules work as designed. They also have said it will take time to cover the costs of compliance.

The state Division of Water Quality has estimated that the rules could cost taxpayers in the Falls watershed as much as $1.5 billion. Only Wake County residents get drinking water from Falls Lake, but most of the dozen or so cities and counties affected by the rules are outside Wake.

Last winter, the affected governments issued "consensus principles" they wanted the state to factor into the final rules. They included reassessing the program before stage 2 rules take effect and regular monitoring of Falls Lake's water by the affected governments, with the expectation that more and better data will show that cleanup doesn't require measures as costly as what's planned now.

The rules note that improving technology and test results could make revisions necessary and require assessments to begin in 2016. Read more.

Friday, 19 November 2010

Construction contractors squeezed by rising material prices

Construction contractors continue to be squeezed by rising prices for key construction materials and flat prices for what they can charge for finished projects, according to an analysis of October Producer Price Index figures released by the Associated General Contractors of America. Prices for materials used in construction jumped by 0.6 percent in October and 4.8 percent over the past 12 months, while the price index for finished buildings remained flat.

“As if declining demand and dramatic layoffs weren’t enough, the construction industry also has to pay more for key materials while charging the same for finished projects,” said Ken Simonson, the association’s chief economist. “This squeeze is likely to force firms to shut their doors, compounding the already staggering 17.3 percent unemployment rate for the sector.”

Simonson noted that prices in October soared for a range of key construction materials. For example, the price of diesel fuel is up 7.2 percent since September and 20 percent since October 2009. Copper and brass mill shapes are up 5.4 percent for the month and 15 percent for the year. The price of steel mill products is up 1.4 percent since September and 12 percent over the past 12 months.

Prices for some construction materials, however, remained flat or declined slightly this past month, Simonson added. Concrete prices were unchanged from the previous month and down 0.4 percent from the previous year. Gypsum products declined by 0.2 percent since September but were unchanged from October 2009. Prices for asphalt paving mixtures and blocks dropped 0.5 percent in October but were still 4.8 percent higher than last year. And lumber and plywood prices declined 0.9 percent since September but rose 6.7 percent during the past 12 months.

Contractors are likely to continue to be squeezed by rising materials prices and flat prices for completed projects for the remainder of the year, Simonson predicted. He added that contractors will be vulnerable to sudden price spikes in multiple materials in 2011 as the U.S. and foreign economies gradually recover.

“Unfortunately, demand for construction will likely remain weak for several more months, exacerbating the price squeeze that has already taken a toll on many firms and far more workers,” Simonson noted. Click here to view the AGC press release and the latest producer price index tables for construction.

Wednesday, 17 November 2010

Architectural billing index reverts back into negative territory

Following the first positive reading since January 2008, the Architecture Billings Index (ABI) dropped nearly two points in October. 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 October ABI score was 48.7, down from a reading of 50.4 the previous month. This score reflects a decrease in demand for design services (any score above 50 indicates an increase in billings).

Fortunately inquiries for new projects remain extremely high said AIA. The new projects inquiry index was 61.7, down slightly from a nearly three-year high mark of 62.3 in September.

“This is not altogether that surprising,” said AIA Chief Economist Kermit Baker. “We were anticipating a slow recovery period and it is likely that there will be some fits and starts before conditions show consistent improvement. Right now, reluctance from lending institutions to provide credit for construction projects and a sluggish economy are the main impediments to a revival of the design and construction industry.”

Key October ABI highlights:

◦Regional averages: Northeast (54.5), Midwest (51.8), South (48.6), West (44.3)

◦Sector index breakdown: commercial / industrial (54.5), institutional (50.8), multi-family residential (49.1), mixed practice (43.2)

◦Project inquiries index: 61.7

The Architecture Billings Index (ABI)is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI. Read more.

Construction backlog indicator falls 3.3 percent

The Associated Builders and Contractors (ABC) today reports that its latest Construction Backlog Indicator (CBI) is sliding backward as the nation’s construction contract activity declined 3.3 percent in September to 6.7 months after falling more than 5 percent in August to 6.9 months.

The Constructionn Backlog Indicator is a forward-looking indicator that measures the amount of construction work under contract to be completed in the future.

“CBI is now edging back toward levels observed in early 2010 as new government stimulus-financed construction projects are no longer translating into additional backlog – a lack of momentum in three construction segments that is cause for concern,” said ABC Chief Economist Anirban Basu. “However, CBI remains well above its historic low point of 5.5 months recorded in January of this year.

“Construction backlog in the infrastructure-related sector is no longer expanding because fewer new contracts are being put on the table. For many months, the infrastructure category drove increases in backlog, but that is no longer occurring. Backlog in the infrastructure category is now approaching 9 months, down from more than 11 months during the early summer of 2010 while recovery in privately financed activities remains stalled, with the overall effect that backlog is now shrinking in that sector,” Basu said.

“The U.S. economic recovery is now roughly 17 months old and nonresidential construction activities typically lag the overall economy by 12 to 24 months, with the implication that privately financed activities should soon begin to show signs of rebound. However, through September, backlog in categories dominated by private financing has yet to expand on a sustained basis. ABC anticipates improvement in construction backlog in the industrial and commercial/institutional categories as the economy continues to recover. However, backlog may continue to decline in the infrastructure category as stimulus funds are steadily spent down,” said Basu.

The infrastructure sector continues to report the largest average construction backlog at 9 months, though it is now shrinking. Between July and September, backlog in this category declined by more than one month.

The heavy industrial category registered the largest expansion in construction backlog from 4.5 months in September 2009 to 6.5 months in September 2010. Construction backlog in the commercial and institutional sector grew by nearly one month from the same time last year. Read more.

Tuesday, 16 November 2010

Head of NC stimulus office leaving job

The man charged with overseeing North Carolina's share of the federal stimulus program is leaving the job, reports the News-Record.

Dempsey Benton has spent his last day on Monday at the Office of Economic Recovery and Investment. Benton said he planned on staying on the job about 18 months, and actually spent nearly 21 months on the job.

The office staff of about 15 has shrunk in half as the program winds down. Benton said about 95 percent of the state's $6 billion allotment has either been spent or is already dedicated to be spent. He said he's pleased that there have been very few complaints of fraud or waste in the program. Benton is a former state Health and Human Services secretary and Raleigh city manager. Read more.

Monday, 15 November 2010

Facebook to begin building $450M data center in NC

Facebook plans to begin construction of a $450 million data center in North Carolina. The Washington Post reports Facebook is one of a growing list of companies converging on the state amid the push toward centrally storing vast amounts of digital data - a concept called cloud computing.

"This is a game-changer," said Lt. Gov. Walter Dalton, who joined representatives from Facebook and local officials at the site near Forest City, about 60 miles west of Charlotte. The data center will take about 18 months to build. said Facebook Director of Site Operations Tom Furlong. It's the second data center Facebook has built in the U.S., following one in Prineville, Ore.

The company expects the construction phase to generate as many as 250 jobs during that time, while the data center will have between 35 and 45 full-time employees. State Commerce Secretary J. Keith Crisco said he's optimistic this will be the first of several Facebook projects in the state.

North Carolina is becoming a popular location for data centers, essentially huge collections of Internet servers capable of processing tremendous amounts of digital traffic. The Facebook announcement follows decisions by Apple, Google, IBM, SAS and American Express to establish similar facilities in the state.

Data centers are growing in importance amid the emergence of cloud computing, where information that once was kept on individual computers is stored in central locations to make it available more economically and on demand.

North Carolina has a combination of natural and man-made advantages that draw data centers, state officials say, including relatively inexpensive energy costs - a key factor for facilities that can draw as much electricity as a city of 50,000. Another is its mild climate: extremes of cold and heat are a challenge for facilities with huge amounts of sensitive electronic equipment. North Carolina lawmakers have passed a number of tax incentives specifically aimed at data centers. Read more.

Thursday, 11 November 2010

Tax breaks, incentives, offered in HIRE Act

You still have time to reap the full benefits of the retention credit, reports Elliott Davis, an accounting and financial consulting firm with offices in Charlotte and the Southeast.

The Hiring Incentives to Restore Employment (HIRE) Act offers two valuable tax breaks for hiring certain unemployed workers: payroll tax forgiveness and a retention credit. Although payroll tax forgiveness is available only through Dec. 31 and thus will provide llimited tax savings for hires you make between now and year end, you still have time to reap the full benefit of the retention credit.

The credit applies to workers who are qualifed for the purpose of the payroll tax forgiveness and whom you retain for 52 consecutive weeks. The tax savings per qualified retained workers are equal to the lesser of 6.2% of the wages paid to the worker during the 52 week retention periof or $1,000.

Because the retention period won't end until 2011, you'll claim the credit on your 2011 tax return. But you must make the hires by Dec. 31 2011.

Detailed information is outlined Here.

ABC predicts 'slow progress' for construction industry in 2011

The Associated Builders & Contractors released its 2011 construction outlook that predicts “grudgingly slow progress” for the construction industry despite the end of the recession for nonresidential construction companies, according to ABC’s Chief Economist Anirban Basu.

“ABC’s forecast of nonresidential construction spending for next year suggests that total spending will be 0.1 percent less than 2010 levels,” said Basu. “Privately financed construction levels are projected to decline 0.2 percent while publicly financed construction levels are projected to be virtually flat.

“The roughly flat expectations for spending are reflected in ABC’s nonresidential construction employment forecast,” said Basu. “After losing about 50,000 jobs in 2010, ABC does not see nonresidential building employment rebounding until 2012. However, ABC predicts that residential construction employment will grow substantially as the number of housing starts will expand by roughly 25 percent.”

The national recession that began in December 2007 ended in June 2009, but because nonresidential construction typically lags the overall performance of the U.S. economy by 12 to 24 months, in 2008, nonresidential construction volumes continued to expand by 9 percent. In 2009, when the recession in the overall economy was over, nonresidential construction spending fell 9 percent, according to U.S. Census Bureau, and ABC projects that spending will fall another 14.7 percent this year.

The good news for 2011 is the period of deep decline in U.S. nonresidential construction spending is over; however this means the industry will remain stagnant, with overall construction volumes mired at or near bottom-of-the-cycle levels. That means 2011 construction spending is positioned to be nearly a quarter less than 2008 totals.

As a whole, 2010 was a period of widely variable performance between construction segments as sectors powered by the availability of federal stimulus funds experienced growth, and privately financed activities buckled under the weight of depleted capital availability and excess supply. Next year, ABC predicts the variable in performance between segments will be much less, at least in terms of percentage changes in spending volumes.

ABC expects power will lead the way for segments that are poised to experience spending growth in 2011, with an anticipated increase of 5.5 percent. In contrast, segments closely linked to state and local government spending are positioned for a decline as many states and localities trim both operating and capital budgets and construction volumes in the education category suffer.

Privately financed construction will likely fare better in 2012, because credit conditions will improve by that point as large, well-capitalized banks become more aggressive in their pursuit of industry market share. Finally, certain leading indicators have turned the proverbial corner, including ABC’s Construction Backlog Indicator, which has been indicating a steady improvement in the commercial and industrial construction outlook.

To read the full outlook, visit www.abc.org.

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Wednesday, 10 November 2010

NCSU economist Walden creates leading-indicators index

N.C. State's oft-quoted and influential economist Michael Walden has created a new index designed to provide a snapshot about where the state's economy is headed, the News & Observer reports.

Walden has earned a reputation as a go-to resource for local and state government leaders, and last month accepted the UNC system's highest award for public service.

His monthly Index of North Carolina Leading Economic Indicators will give business owners, politicians, economic recruiters and others a fresh source on North Carolina's economic health looking four to six months ahead.

"I started it now because I receive a large volume of questions about the economic future," Walden said. "Given the times, people are very interested in where the economy is going."

For September, the index declined 0.8 percent from August, led by a large reduction in building permits and a decrease in weekly earnings in manufacturing. Compared to a year ago, the index was up 0.1 percent.

The index is based on five components, including initial claims for unemployment benefits and weekly hours of work for manufacturing employees. It's modeled on the national leading index and similar indices in other states.

Walden said he focused on components that are readily available on a timely basis each month. And manufacturing is a "leading sector."

"It tends to fall before others do prior to a recession, and it tends to revive before the others do prior to a recovery," he wrote.

Find his new leading-indicators index online here.

Tuesday, 9 November 2010

Contractor to use local NC companies for Caterpillar plant

The Winston-Salem Journal reports Gray Construction of Lexington, Ky., chosen as the general contractor for the Caterpillar Inc. plant in Forsyth County, plans to hire as many local companies as feasible to help build the 850,000-square-foot facility.

Potential subcontractors, suppliers and vendors will be judged on five key criteria, said Jill Wilson, the vice president of communications and marketing for Gray. The criteria are: most competitive price, the scope of the bidder’s work and experience, references, safety record, and financial performance and stability, she said.

“We are very in tune with hiring locally because we understand the economy and the jobs impact our projects can provide,” Wilson said. She estimated there will be 150 to 300 employees at the work site daily when full construction is under way.

“We also want to follow Caterpillar’s commitment to hire locally within the set parameters,” Wilson said. As part of its announcement, Gray said it has selected Cavanaugh & Associates of Winston-Salem to help with the site development. The company does engineering-consulting work for major land projects.

“The award of other packages will start within the next 30 to 45 days and will be phased throughout the construction process,” Wilson said. Gray’s project manager can be accessed by e-mailing to caterpillar@gray.com.

Gray was chosen over at least six other known bidders — only one with ties to the Triad. The company said it has designed and built nearly 460 manufacturing plants in the United States with a combined space of 53 million square feet.

Although it is Gray’s first major project with Caterpillar, Wilson said, the company has experience in building plants where heavy equipment is used in an assembly-line format.

For example, it is about to complete construction of a 277,000-square-foot plant for Siemens in Hutchinson, Kan., focused on producing wind energy nacelles — 90-ton, oblong steel structures that are perched atop wind-turbine towers that house generators, gears and electrical systems.

Gray is facing a challenging construction timetable. Caterpillar officials have indicated recently they plan to begin production before the end of 2011, two to three months sooner than its initial projection. The company will break ground on its $426 million plant on Friday. Wilson said that the grading subcontractor will begin work next week. It expects to have the plant completed in April 2012. The plant, when fully operational, will have 392 Caterpillar and 118 contract employees.

City and county officials have encouraged Caterpillar to consider local companies for the project, especially in light of being made eligible for up to $23.5 million in local incentives.

Those officials said they are confident that local companies still will be considered for subcontractor work, including grading, utilities, electrical work, masonry, heating and ventilation. Read More.

Monday, 8 November 2010

Public construction spending offsets decline in private-sector construction

Even as the number of people working in construction increased by 5,000 between September and October 2010, the industry’s unemployment rate rose to 17.3 percent, according to an analysis of federal employment figures released by the Associated General Contractors of America. Temporary government investments boosted commercial construction employment, offsetting further job losses in residential construction, association officials noted.

“Despite significant help from programs like the BRAC and the stimulus, construction employment continues to lag behind much of the private sector,” said Stephen E. Sandherr, the association’s chief executive officer. “It is yet another indicator that the economy has a long way to grow before demand for new office buildings, retail centers and manufacturing facilities returns.”

Association officials noted that construction employment lagged behind other sectors of the economy. For example, while total private employment rose by 1.1 million during the past 12 months, the construction industry lost 122,000 jobs. Meanwhile, the industry’s unemployment rate is nearly double the unadjusted national rate of 9.5 percent.

Nonresidential construction fared relatively well in October compared to residential construction, association officials said. Nonresidential construction employment added 10,300 jobs since September, while residential construction lost 5,800 jobs. Nonresidential specialty construction added 7,300 jobs and heavy & civil engineering added 4,800 jobs. However, nonresidential building construction employment declined by 1,800 jobs between September and October.

The employment data is consistent with construction spending figures released earlier this week that showed increases in public construction spending offsetting continued declines in private-sector construction. Temporary federal programs like the stimulus and base realignment efforts were driving demand for construction workers from the specialty trades and heavy & civil engineering construction sectors. Meanwhile decreased private-sector activity contributed to the nonresidential building job losses.

While the stimulus has helped protect the construction industry from more severe job losses, construction firms were unlikely to significantly expand payrolls until the long-term market outlook improves, association officials said. They urged Washington officials to act on long-delayed water and transportation infrastructure programs and to provide the tax and regulatory relief needed to boost private sector economic activity. Read More.

Friday, 5 November 2010

Modest recovery predicted for construction industry

The construction market has yet to see signs of recovery from the current recession, but the recovery may be coming next year if factors such as employment and bank lending fall into place, according to a forecast released by McGraw-Hill Construction.

Robert Murray, MHC’s vice president of economic affairs, foresees an 8% increase in total construction starts to $445.5 billion in 2011. Much of that prediction is based on the single-family housing market, which finally is seeing substantial growth with starts rising 27% to $126.7 billion.

Similarly, multifamily housing starts are predicted to rise 24% to $23.6 billion, but that prediction comes with some caveats. Murray explains that, for the construction market to realize those gains, employment will need to show growth, banks will have to loosen lending, and state and local government will need to contain their budget difficulties.

“Assuming that takes place, an 8% gain for construction is realistic, but if things go wrong and we slide back into recession, then it will be another year of flat to declining activity for construction starts,” he adds.

Commercial Rebirth

Among non-residential building sectors, Murray predicts that, next year, commercial construction starts could pull out of a three-year decline, during which time contracting volume dropped 62%. His forecast calls for a 16% gain in starts up to $44.9 billion, which would counter the 17% decline realized in 2010. Office, hotel, warehouse and store activity all are expected to see an uptick in 2011.

Institutional building continued to suffer in 2010, dropping 7% to $103.6 billion. That sector includes health care, which remained flat, along with the educational and public building sectors, which both declined. McGraw-Hill Construction forecasts the institutional market will flatten out next year at $102.7 billion in total starts, as the health-care sector makes gains and the declines in the educational and public buildings sectors ease.

Among the transportation sectors, Murray predicts that construction starts on highways and bridges will retreat by 4% to $57.6 billion, as federal stimulus dollars run out and many state and local governments continue to struggle with their budgets. Mass transit, which has made tremendous gains in recent years, will see starts begin to level off, rising 3% to $7.5 billion. That level remains historically high—nearly double the $3.9 billion spent in 2008.

Decline Puts on the Brakes

The current year was notable for the slowing of the declines of prior years. McGraw-Hill Construction estimates total construction starts will drop 2% to $411 billion in 2010, marking the fourth year in a row of decline. This year’s slump in activity, however, is countering expectations that 2010 would mark a turnaround for the industry. Last year, McGraw-Hill Construction forecast that construction starts could climb 11% in 2010, up to $466.2 billion. However, Murray says that, despite a promising first quarter, the economy remained weaker than expected and produced limited job growth.

“That early stage of recovery has, in effect, been pushed back due to the stall that we had in the overall economy this year,” he says. Much of the softness was felt in the single-family-home sector. Although the sector was expected to see a 30% jump in starts this year, it will close with a modest growth of 6% to $100 billion.

While the stimulus did have an impact on the construction industry, Murray says many of those gains were offset by cuts to transportation projects made by revenue-strapped state and local governments. Read More.

Wednesday, 3 November 2010

'Lien wavers don't waive lien laws,' ASA tells NC Court of Appeals

“The protections afforded contractors, subcontractors, and suppliers through mechanics’ and laborers’ liens are essential to the survival of the construction industry,” the American Subcontractors Association and ASA of the Carolinas said in an amici curiae, or “friends of the court,” brief filed with the North Carolina Court of Appeals.

The brief, filed in Preserve Holdings, LLC v. Superior Construction Corp. et al., asks the court to reverse a trial court’s decision flouting North Carolina law that establishes a contractor’s mechanic’s lien as effective on the date on which it first furnishes labor or materials.

“The law is clear, and ASA and ASA of the Carolinas are standing up for subcontractors’ valuable lien rights,” said 2010-11 ASA President Timmy McLaughlin, Austin Construction Company, Summerville, SC. “Lien waivers don’t waive lien laws.”

In the underlying case, a contractor, Superior Construction Company, constructed improvements for a multi-building condominium project, and filed suit on a lien after not being paid nearly $1 million. The construction lender obtained a lien for the project (based on a deed of trust) after the contractor started work. The lender convinced a court that the contractor’s decision to sign partial lien waivers changed the effective date, and therefore the priority, of the contractor’s lien claim. The lender claims that the contractor’s lien claim is effective only as of the first day for which the contractor has not executed partial lien waivers for progress payments.

In their brief, ASA and ASAC stated: “The Trial Court’s decision, if not reversed, will have a particularly severe and unnecessary harsh impact on the very subcontractors the lien statutes are designed to protect. A subcontractor’s right to lien a project, and the first furnishing date for a subcontractor’s lien is the date of first furnishing of the contractor. The Trial Court’s holding misapprehends the relation back doctrine, misreads the lien waiver, and ignores the effect of waivers on subcontractors.”

Eric Biesecker, Esq., Nexsen Pruet PLLC, Greensboro, prepared the brief for ASA and ASAC. ASA tapped its Subcontractors Legal Defense Fund to pay the fees associated with its filings in this case. The SLDF supports ASA’s critical legal activities to protect the interests of all subcontractors, and is funded solely by contributions. SLDF funds are invested in precedent-setting cases across the country. To learn more about this case and the Subcontractors Legal Defense Fund, visit www.sldf.net.

Fort Bragg incorporates green technology into its construction projects

Fort Bragg is working to set itself apart from other installations by incorporating green technology into everyday military life. The Fayetteville Observer reports Fort Bragg has incorporated "sustainability" into its future.

DPW LEADING THE WAY

The Directorate of Public Works, which heads sustainability efforts on Fort Bragg, tends to try out green technologies on its buildings first. Rain barrels made of recycled plastic are positioned below water spouts on the sides of buildings. In some instances, rainwater is channeled into planters, where employees have grown tomatoes, herbs and flowers. A rooftop "bubble atrium" allows sunlight in, reducing the need for turning on lights.

A BUILDING OF CONTAINERS

Fort Bragg houses the first multistory commercial building in the U.S. made from steel shipping containers. It took 110 days to complete, and the cost was less than $750,000. The facility, which serves as the 249th Engineers Company operations building, was built from 12 used containers, and each module weighs about 8,500 pounds.

SOLAR ENERGY

Fort Bragg has been experimenting with different types of solar energy, and future projects may include car ports made of solar panels. An example of construction that successfully integrates solar energy is the new Community Emergency Services Station. It is a designated LEED Platinum building that uses geothermal energy, or the temperature underground, to heat and cool the interior.

Another project nearing completion is the thermal energy storage tank in the 82nd Airborne district. The tank cools water at night to be used during the day, when electricity costs are higher.

GREEN CONSTRUCTION

According to a Department of the Army executive order to installations, all new construction since 2008 has to be LEED Silver certifiable. However, Fort Bragg is making existing buildings LEED Silver certifiable, one renovation at a time. Starting in fiscal 2013, all new buildings on military installations must be LEED Silver certified, which means a third party will verify if the building meets green goals.

The debris at Fort Bragg construction sites also has been pinpointed and recycled: Contractors have recycled as much as 95 percent of debris on individual construction sites, said Rob Harris, chief of the Fort Bragg Engineering Division. Read More.

Tuesday, 2 November 2010

NC business climate rated the best

Site Selection magazine has selected North Carolina as having the nation’s top business climate for 2010.

It is the sixth year in a row, and the ninth time in 10 years, that the state has taken the top honor in the annual ranking by the magazine.

The rankings are determined 50 percent by performance of the 50 states in Conway Data’s New Plant Database, which tracks new and expanded business-facility activity, and 50 percent by a survey of corporate site-hunters across the country.

“North Carolina’s first-place finish underscores its success across a wide spectrum of industries, from aerospace to life sciences to energy,” said Mark Arend, the magazine’s editor in chief.

Among North Carolina’s strengths, according to executives associated with projects in the state, are: its extensive higher-education resources; work-force training initiatives; moderate climate; and transportation infrastructure.

Another factor, the magazine said, is the governor’s proactive approach to business recruitment. Read More.

Monday, 1 November 2010

Construction industry recovery predicted in 2011

The nation's construction industry, virtually on life support during the economic downturn, will begin a slow recovery next year, according to a forecast reported in the Wall Street Journal.

Next year, the value of new projects that start construction is expected to climb to $445.5 billion, an 8% rise from this year when that figure hit a post-recession low, according to the closely watched McGraw-Hill Construction forecast.

New development of single-family houses, apartment buildings and commercial properties is expected to increase. But there will be less building of new highways, bridges and other public works as federal stimulus money dries up, according to the forecast.

Even with an increase next year, construction activity will still be far off the boom-year peak it hit in 2006 when there were $689.3 billion in construction starts, according to McGraw-Hill.

McGraw-Hill last year initially forecasted a gain of 11% for 2010, but that projection proved to be overly optimistic. Construction starts are estimated to decline 2% from 2009 as a recovery in the housing industry stalled in the middle of the year, credit remained sparse and municipal budget deficits widened.

"State and local governments saw their fiscal health erode to a greater extent than previously thought," said Robert Murray, vice president of economic affairs at McGraw-Hill Construction, part of New York-based McGraw-Hill Cos.

McGraw-Hill expects the U.S. economy will grow 2.5% in 2011. "The economy will continue to struggle in 2011 although avoid another recession," Mr. Murray said.

Among specific sectors, single-family housing should see the strongest rebound in 2011, with $126.7 billion in construction starts, a 27% boost, according to the forecast. But that projection assumes mortgage rates remain low, job growth improves and a resolution is found to the foreclosure documentation mess. The single-family estimate is 60% below the peak in 2005, underscoring how far builders have curtailed construction following the housing boom.

New construction of multifamily housing is expected to rise 24% to $23.6 billion next year, extending gains from 2010 as a growing number of renters enter the market amid the housing crisis. A 1% decline is expected for public-works construction, which should come in at $122.3 billion as a lack of federal stimulus money and budget woes of state and local governments put a lid on new projects.

Meantime, commercial buildings—which includes offices, stores, hotels and warehouses—will improve with a 16% gain to $44.9 billion. But that comes after falling 17% in 2010 and 43% in 2009. In 2010, construction starts hit a 50-year low.

McGraw-Hill projects that construction starts of manufacturing buildings will increase 9% as the drop in value of the U.S. dollar increases demand for U.S. goods. Read More.