Monday, 31 October 2011

Infrastructure projects boosts NC construction contracts in September

A more than 300% gain in North Carolina’s nonbuilding category pushed the state’s September total for new construction contracts to a 58% overall improvement for the month, according to  McGraw-Hill Construction.

The state  recorded an estimated $1.3 billion in new contracts in September. The nonbuilding category, which includes infrastructure projects, recorded an estimated $604.5 million in new contracts, compared to last September’s $148.8-million tally. The nonresidential construction category was also positive, with its monthly total of $257.7 million equating to a 17% gain. The residential market was down 1%, however, with roughly $468.4 million in new work.

On a year-to-date basis, the nonbuilding category is again the shining star. Through September it has recorded more than $3.7 billion in new contracts, or 82% higher than the first nine months of 2010, when this category saw just over $2 billion in new work.

The other construction categories are negative for the year, however. McGraw-Hill Construction estimates nonresidential contracts at nearly $3.3 billion, or 12% lower than a year ago. Residential contracts are down 11% compared to 2010, with just over $4.2 billion in new projects so far. Overall, McGraw-Hill Construction estimates North Carolina’s 2011 contracts at roughly $11.2 billion, or 7% ahead of 2010’s pace. Read More.

Feeble demand; rise in construction materials prices put contractors at risk

Ken Simonson, chief economist of the Associated General Contractors of America, says construction materials climbed 8.1 percent in the past 12 months, while the amount contractors charge for new nonresidential construction increased only to 3 percent. “Feeble demand for construction is forcing contractors to absorb the bulk of materials price hikes, instead of passing them along to owners,” Simonson reported at the 15th annual Construction Financial Management Conference last week. “This pattern has persisted for more than two years, and many contractors are increasingly at risk.”

Simonson noted that key materials showed divergent price trends in September but all posted double-digit year-over-year increases. Those materials include diesel fuel, copper and brass mill shapes, steel mill products, and aluminum mill shapes.

Simonson observed that the price index for new construction – what contractors charge for construction projects – rose 2.2 percent over 12 months for industrial buildings, 2.6 percent for offices, 2.8 percent for warehouses and 3.0 percent for schools. “In light of the much steeper materials cost increases, these gains are not enough to keep contractors solvent,” he warned.

In addition to the cost squeeze, Simonson said the industry was suffering from decreasing demand for public sector construction activity. While state and local construction budgets will continue to contract for the foreseeable future, he said Congress could help offset some of the decline by enacting new infrastructure investments. Enactment of the $50 billion American Jobs Act proposed by President Obama appears unlikely, he added.

On a positive note, the AGC economist predicted continued growth in nonresidential spending in the following market segments: power (including oil and gas structures, pipelines), manufacturing (including data centers), health care and warehouse/distribution.

Sunday, 30 October 2011

Non residential construction investment up 16.3 percent

“The third quarter Gross Domestic Report (GDP) report puts any talk of an imminent recession to rest for now,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Indeed, economic data released over the past month have been surprisingly good."

Nonresidential fixed investment jumped 16.3 percent in the third quarter of 2011 following a revised 9.2 percent increase in the previous quarter of this year, according to the GDP report by the Department of Commerce. Nonresidential fixed investment in structures increased for the second straight quarter this year, up 13.3 percent in the third quarter following a 22.6 percent increase in the second quarter. Fixed investment in equipment and software expanded 17.4 percent last quarter following a 6.2 percent increase in the second quarter.

“The GDP report shows that a growing share of American corporations are willing to spend money to spur top-line and bottom-line expansion,” Basu said. “However, this does not signify that the nonresidential construction industry is set to boom.

“Public sector support for construction services is likely to be flat at best, and job growth remains halted and lending disciplined,” said Basu. “But the overall economic outlook for the nonresidential construction industry has improved materially over the past several weeks.

“Eventually, the investment in equipment software and structures will trend late into expanded hiring. Capital and labor go together and what the United States is now experiencing is acceleration in capital formation,” said Basu.

“That, in turn, will help trigger more demand for construction services, whether in the form of office buildings, apartments, or shopping centers. In short, the improved outlook for the broader economy in 2012 signals more recovery for construction activities in 2013 than were contemplated just a few weeks earlier,” Basu said.  Read More.

Saturday, 29 October 2011

Carolinas construction employment continues to drop in some metro areas

Construction employment declined in 153 out of 337 metropolitan areas between September 2010 and September 2011, according to a new analysis of federal employment data released by the Associated General Contractors of America. Statewide, North Carolina lost 1,300 constructon-related jobs in the last year. South Carolina lost 2700 jobs in the same period.

Association officials noted that declines in publicly funded construction projects continue to offset modest improvements in the private sector market. “Despite the fact the industry added 26,000 new jobs in September, industry employment continues to fall in far too many metro areas,” said Ken Simonson, the association’s chief economist. “Construction demand in many parts of the country seems to be ranging somewhere between tepid and non-existent.”

In North Carolina, Wilmington showed the most dramatic job loss: 1300 jobs (14 percent). Asheville lost 400 jobs (5%) and Charlotte lost 200 jobs (1 percent). Statewide, the only employment increases were in Raleigh/Cary (2,100 jobs, 7 percent) and Winston-Salem (400 jobs, 5 percent). South Carolina experienced a 3 percent construction job lossk in the same period. Both Augusta and Greenville lost 500 jobs (4 percent). Charleston lost 300 jobs (2 percent).

Association officials said that in addition to passing long-delayed highway, transit and airport investment legislation, elected officials should act quickly to establish a self-funded Water Trust Fund to address an estimate $600 billion in clean water infrastructure needs during the next 20 years. They also called on the Senate and Obama administration to support legislation expected to pass in the House today repealing the 3 percent tax withholding mandate that would devastate the construction industry.

“Instead of finding fiscally responsible ways to improve our aging infrastructure and keep our water clean, Washington is planning to force contractors working on public projects to give the government interest-free loans,” said the association’s chief executive officer Stephen E. Sandherr. “Unless Washington rethinks its priorities, even more metro areas are likely to lose construction jobs.”

See construction employment figures by state .

WoodWorks accepting nominations for East Region Wood Design Awards

WoodWorks, is now accepting nominations for its East Region Wood Design Awards. The awards recognize excellence in wood design and construction, as well as innovative projects that showcase wood’s strength, beauty, versatility and cost-effectiveness.

“We want to honor those architects, engineers and designers that have found innovative ways to use wood in buildings,” said Pat Schleisman, PE, regional director of WoodWorks East. “These are real-world examples that demonstrate how wood can help maximize the beauty, functionality and sustainability of modern buildings while in many cases minimizing cost.” Contractors, designers and/or  projects based in the Eastern US including North and South Carolina are eligible.

Projects may be submitted in nine categories: institutional, commercial, or multi-family wood design; interior beauty of wood; green building; exterior use of wood; traditional use of wood; wood behind walls; and engineering. The entry deadline is December 23, 2011. There is no cost to nominate a project or individual and multiple submissions are encouraged. Projects must have been completed in the past three years. Entrants can find nomination materials and more information Here.

Wednesday, 26 October 2011

Sobering forecast from McGraw-Hill Construction

A fifth straight year of decline is how 2011 will go into the record books, with no growth likely next year. That's the sobering forecast from McGraw-Hill Construction.

In light of the sluggish economy, construction spending continues to limp along in a depressed state with few limited signs of hope on the horizon. McGraw-Hill Construction, the parent of ENR, estimates that 2011 will close out with a 4% drop in total construction starts to $410 billion, marking the fifth year in a row of decline. Analysts forecast that 2012 will see essentially flat activity with an estimated $412 billion in starts. The forecast was announced during McGraw-Hill Construction’s Outlook 2012 Executive Conference in Washington, D.C.

Murray says that given the current fragility of the economy, overall recovery may not come until 2013 or 2014. “It’s going to be another year on this extended bottom,” he said. “The corner is being turned, but ever so slowly and in an uncertain manner.”

The forecast dashes previous hopes for a recovery in 2011. Last year, McGraw-Hill Construction predicted an 8% increase in total construction starts to $445.5 billion.

Robert Murray, vice president of economic affairs at McGraw-Hill Construction, credited much of the decline to decreased activity in the single-family housing, public works and institutional building sectors. Single-family housing, in particular was expected to buoy the market with a 27% rise, but instead dropped 5% to 94.7 billion.

Murray notes that recovery is hampered by a sluggish economy where GDP is expected to drop from 3% in 2010 to 1.6% in 2011. Meanwhile, unemployment remains around 9%. Still, Murray is hopeful that single-family housing will improve to $104.6 billion in 2012—a 10% increase. Low mortgage rates and moderate job growth could fuel the uptick, he adds. Read More.

Tuesday, 25 October 2011

Simulation technology offers 360-degree view of proposed projects

Metropolis Magazine says helping clients visualize a new space is often crucial to moving a project forward. Many architects and design-build contractors will pull out all the stops when it comes to drawings, renderings, and BIM models. But what if all of those fall short? An entrepreneur based in Raleigh, NC, might have the answer.

Since 2008, David Fuller’s company, FullCon Solutions, has been offering the design team an immersive virtual experience. He calls it “full-scale analysis.” Architects bring clients into a ten-foot cube, and the design is projected onto all six of the cube’s surfaces—the four walls, the ceiling, and the fioor­—providing a 360-degree view. Using a handheld wand, designers then simulate a walk-through of the model. It’s the closest you can get to being inside a space before it is actually built.

The technology itself isn’t new. The facility that Fuller uses—the Duke Immersive Virtual Environment, housed at Duke University in nearby Durham—was built six years ago, and it’s one of only eight labs that can do this kind of six-sided projection. But the cube was primarily used for scientific visualizations—medical students explored the minutiae of the human brain, for instance. Fuller saw how useful it could be for complex design projects. “I was looking for a technology that could simplify how we communicate 3-D CAD or BIM data,” he says.

Designers have to budget around $2,000 an hour to use the tool, but that figure can vary significantly from project to project. Andy King, the design lead at the Raleigh-based firm BBH Design, used it for modeling a cancer center and an energy plant. “After the clients had experienced it once,” he says, “they were more than willing to pay for it two more times.” Key decisions were made quickly. For the energy plant, workers could check that controls and mechanical parts were easily accessible. “The real value is that it expedites the process,” he says. “Clients give better feed-back, because they can fully grasp the scale of a project.” Read More.

NC contractor named 2011 National Minority Construction Firm of the Year

Aaron Thomas, president of Metcon Construction Inc. of Pembroke was recognized this month as the  “2011 National Minority Construction Firm of the Year” by U.S. Department of Commerce’s Minority Business Development Agency (MBDA).  The award was presented at the 2011 Minority Enterprise Development Week Conference held in Washington, D.C. 

Founded in 1999, Metcon is certified by the N.C. Office for Historically Underutilized Businesses (HUB Office) as an American Indian-owned general construction business. Metcon specializes in commercial building and infrastructure, with complete design-build and construction management capabilities. Thomas recently expanded operations and created new jobs by opening a branch office in Raleigh. 

“HUB certification and support has been instrumental to our firm’s success,” Thomas said. “We value this experience and encourage other HUB firms to take full advantage of available services and programs.”  

In collaboration with the HUB Office and the N.C. Indian Economic Development Initiative, Thomas recently led a Statewide Uniform Certification Program (SWUC) training at the University of North Carolina at Pembroke. SWUC ensures that qualified HUB firms are represented in the statewide vendor database and provided notice of competitive bid opportunities, which helps them to keep and grow local jobs.

 In addition to the national award, Metcon recently was honored as “2011 Minority Construction Firm of the Year” by the Atlanta Region MBDA. Metcon was nominated by the N.C. Institute for Minority Economic Development, which operates the N.C. Statewide Minority Business Development Center.   

For additional information about HUB certification or other services, call 919-807-2330 or visit

Monday, 24 October 2011

Impact of Federal stimulus spending on NC construction industry

The  2.3-mile stretch of road that bridges the Neuse River in Johnston County, slated to be opened on Wednesday, is only a sliver of the $19.4 billion in federal stimulus money being spent in North Carolina, reports the News & Observer.  The two-lane Johnston County road is one of 477 such projects in North Carolina funded by the American Recovery and Reinvestment Act. The $14.3 million two-lane project has pumped money into a struggling economy, much of it into a construction industry decimated by the downturn.

The money paid for concrete girders to be poured in Charlotte, a rock quarry to be mined near Benson and provided work for more than a dozen subcontractors from Mount Airy to Maysville. The Johnston County project appears to have added only a few new jobs in a state with a persistently high unemployment rate. But it did keep things from getting worse, say people involved in the project. 

The Johnston County project was one of the first North Carolina projects funded by the stimulus package, in part, because it was already on the state Department of Transportation's plans and was "shovel ready." The project, approved July 1, 2009, extends Booker Dairy Road, crossing the Neuse River to U.S. 70 business, providing a new east-west route, relieving traffic through downtown Smithfield. Smithfield officials have clamored for the project for 15 years as a much needed second crossing of the NeuseRiver.

"It will have better access for a number of schools, for economic development areas," said Rick Childrey, president of the Greater Smithfield-Selma Chamber of Commerce. The project, which crossed the Neuse River and environmentally sensitive wetlands, required four bridge crews to construct a 3,000-foot span. Although it was in Johnston County, the project had a ripple effect across the state.

For Wilson road construction company S.T. Wooten, it meant 67 employees on the project - providing work for existing employees as well as hiring 12 new workers. This wasn't a make-or-break project for a company with 1,000 employees and with many major projects, including the toll road being built in western Wake County. But it was welcome nonetheless. "If it had not been for that, we would have had to lay off people," Nelson said. "It was a big impact for our company as well as for our suppliers." Crane operators, bulldozer operators, backhoe operators, skilled laborers, roller operators, skilled carpenters, concrete finishers, supervisors and project management staff were among those who worked on the project.

It also meant work for 107 subcontractors for S.T. Wooten. Subcontractors based in Mocksville, Indian Trail, Mount Airy, Kinston, Fayetteville, Kannapolis,Cary, Maysville and Winston-Salem worked on the project. There were 90 to 100 people employed by suppliers. Supplying the concrete girders for the bridge was Charlotte-based Prestress of the Carolinas. Last year, a crew of between six and 10 people worked for up to 40 weeks at the Charlotte plant pouring 96 concrete bridge girders - all more than 100 feet long and weighing as much as 116,000 pounds each. No extra workers were hired. "There were times in the last few years where we were sitting here wondering where our next job was going to come from," said Jeff White, assistant plant manager for Prestress. "This gave us some breathing room."

Providing 48,000 tons of crushed stone for the project was Martin Marietta Materials, a Raleigh-based company that is one of the largest suppliers of asphalt and rock in the country. The job kept 12 people working for the equivalent of a month at the company's Benson quarry. The firm also contracted with independent haulers who made 2,400 trips, each truck averaging about 20 loads between the quarry and the road project. "We need more of them," Paxton Badham, a Martin Marietta executive, said of the project. "It is this and other jobs that keeps them working."
Overall, S.T. Wooten officials estimate it spent $2.7 million buying construction materials from North Carolina companies, plus another $6,000 on copies of plans, safety vests, hard hats and other supplies. 

There are no precise numbers on how many jobs were created or preserved in North Carolina by the stimulus package. The state recovery office has tracked the effects of stimulus spending in North Carolina for the past two years. The office's best guess is that about 25,000 North Carolinians have worked - either through jobs created or jobs preserved over that period, said John McHugh, who worked as a senior analyst for the office.  McHugh believes the 25,000 jobs figure provides an incomplete picture because it excludes the effect of major portions of the stimulus package.

It doesn't include jobs created through loans and grants made to businesses through various stimulus programs. The stimulus office estimates 9,600 North Carolina jobs were saved and another 4,600 were created through such programs. Read More.

Project Manager's Toolbox - Closing Out

Guest Editorial by Richard Law, Principal, *Jadesdad* , Charlotte NC. Reprnted from the October/November 2011 North Carolina Construction News.

Closing out a construction project can be an emotionally and financially trying process with what seems to have a constantly shifting end-point. However, this doesn’t need to be the case. A closeout that is the product of a well-organized project, in which the policies and procedures have been consistently and carefully applied and maintained throughout the life of the project, can generate a feeling of successful accomplishment. 

A poorly organized project with incomplete records can still be closed out. It’s just a more likely to be a protracted and wasteful experience. An examination of the major tasks necessary for closing out a project provides us with a collection of activities that must be concluded in order to calmly reach closeout.  

Contractors sometimes forget that Permits need to be closed as the permitted work is concluded. Permit control sometimes suffers from inattention. A case comes to mind regarding a recent nine-figure project (with a major international contractor as the Design-Build Entity), on which Permit maintenance was shirked. A State EPA Surface Water Discharge Permit was left open for over a year after all work that could have resulted in a discharge of surface water had been completed. During a major storm, a surface water event occurred on an adjacent undeveloped property, and that event caused damage on a second adjacent property. Although the Permitted Project had no involvement in either the event, or in the damage caused, a State EPA examiner decided that the slick thing to do was to make coordinating the resolution of the situation the responsibility of the Permitted Contractor (as the price for closing a permit that should have been painlessly closed over a year earlier). Project closeout requires that all Permits be successfully concluded; this permit conclusion work is most easily done as the project progresses, instead of leaving it all to the end.

Required Owner Training must be certified as having been completed, and all Operations and Maintenance Data must be submitted and accepted. O&M’s are things which can be accumulated piecemeal throughout the life of the project and held for dissemination as the various aspects of the project are transferred to Owner control (usually as a part of Owner Training). Remember that the final tests for each system are a part of transferring systems to Owner control. Be sure to also include any required systems sign-offs by Owner Representatives.

Click Here to read the rest of the article on page 8 of the October/November 2011 North Carolina Construction News.

Question the power of social media?

Guest editorial by  Chris Hearn , Co-founder, Qudeso
We regularly get involved in conversations where contractors tell us they understand that Facebook, Twitter, Linked In, etc. are great tools for teenagers and college kids. Yet they have not been able to draw a correlation to the advantages this powerful business medium could bring to their business.  While this economy has forced many businesses to look at new, cost effective tools to reach and hold potential clients, there has also been reluctance to embrace this technology wholeheartedly as a viable solution.
The question you should be considering is: How can I use this cost effective, productive tool to help grow my business?  There are a number of ways to get started:
1.       Ask your current customers how they use and succeed using Facebook, Twitter, Linked In, etc.
2.       Find one or two people in your own organization who use social media every day and ask them for their opinion.
3.       Read any one of a number of blogs and websites that detail how you can employ this platform.
4.       Check competitive websites to get some ideas.

5.       Ask every person who contacts your business how they found out about your company.
If your business could use new customers, you should be seeking out this information.  Your competition is probably doing the same thing.
Chris Hearn is Co-Founder of Qudeso, a North Carolina-based full service marketing  For more information call 877-478-3376 or email:

Friday, 21 October 2011

Architectural Billing Index drops in September

Following the first positive score in four months, the Architecture Billings Index (ABI) reversed direction again in September.

 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  reported the September ABI score was 46.9, following a score of 51.4 in August. This score reflects a sharp decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 54.3, down from a reading of 56.9 the previous month.

“It appears that the positive conditions seen last month were more of an aberration,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The economy is weak enough at present that design activity is bouncing around more than usual; one strong month can be followed by a weak one. The economy needs to be stronger to generate sustained growth in design activity.”

Key September ABI highlights:
      • Regional averages: Midwest (51.0), Northeast (50.8), South (47.3), West (46.7)
      • Sector index breakdown: commercial / industrial (52.4), mixed practice (50.0), institutional (48.0), multi-family residential (46.4)
      • Project inquiries index: 54.3
      The regional and sector categories are calculated as a 3-month moving average, whereas the index and inquiries are monthly numbers. Read More.

Military leaders meet with contractors meet to discuss state business opportunities

Fort Bragg has enjoyed a construction boom highlighted by the $300 million combined headquarters for Forces and Army Reserve commands.  The Fayetteville Observer reports  military leaders and private contractors from across the state met in Wilmington this week to discuss life after base realignment and closure - the process that brought the combined headquarters to Fort Bragg. The headquarters building was dedicated Aug. 1.

The annual North Carolina Federal Construction & Infrastructure Summit - also known as Fedcon -  featured representatives from more than 100 companies and several military installations, as well as leaders with the state National Guard, Army Reserve and Army Corps of Engineers. Presenters did not paint a bleak future for contractors after BRAC, but they cautioned that there are "new realities."

Tad Davis, chief executive officer for Army Reserve Command at Fort Bragg, said this new world order features tighter budgets and a greater emphasis on eco-friendly designs to help conserve energy and money. "The Army - our Army, my Army - is building green, buying green and going green,'' Davis said. "It's a team effort ... That's why we're here."

"We're at the end of the BRAC era. The reality now is the budget is shrinking," said Maj. Gen. Jeffrey Dorko, deputy commanding general of military and international operations for the Army Corps of Engineers. Soon, there will be fewer new construction projects, Dorko said, and contractors can instead expect a greater emphasis on restoring and modernizing existing buildings.

That's certainly the case on Fort Bragg, said retired Col. Greg Bean, Fort Bragg's director of public works. Bean made a brief presentation during a panel discussion in which he highlighted Fort Bragg's BRAC-related growth and discussed future opportunities for contractors.

While Fort Bragg does have several upcoming construction projects - including two new schools, a new non-commissioned officer academy and a hospital addition - much of the work on the installation will involve restoring existing structures to make them more modern and energy efficient. "We have to reinvent the facilities we have," Bean said. "We've got a lot of facilities that were constructed in the '70s that need to be refurbished."

Bean said contractors also could expect the installation to focus on repaving projects for the installation's roads and runways at Pope Field, which alone needs an estimated $100 million in paving over the next five years.  Many contractors attending the summit were veterans themselves. They said they were seeking information on better ways to do business with the government. In addition to informational panels, contractors heard from keynote speakers and were able to participate in "speed networking" with various agencies. The summit wasn't meant to benefit only businesses.

Military leaders said they were open to new ways of doing business and encouraged contractors to come to them with ideas on how to make the military more efficient. Maj. Gen. Al Aycock, director of operations for the Office of the Assistant Chief of Staff for Installation Management, said he needs help updating policy and programing for the Army. "Give me your ideas. I can help you a great deal," said Aycock, a former Fort Bragg garrison commander.

Aycock offered the privatization of Army housing and lodging as examples of relatively new ideas that save the military money while putting money in the hands of contractors. In keynote remarks, Aycock said the nation's budget deficit is the biggest threat to national security. "We have to help balance the budget," he said, referring to Department of Defense attempts to save $450 billion in the next decade. "We really don't have a choice."  Read More.

Thursday, 20 October 2011

AIA announces five new documents for sustainable projects

Five AIA Contract Documents are going green. Developed using the American Institute of Architect's flagship documents as a base, and incorporating concepts and model language from the AIA’s Guide for Sustainable Projects, the new documents address the unique roles, risks and opportunities encountered on sustainable design and construction projects.

“The development of these new documents for sustainable projects is a natural next step following the release of the Guide for Sustainable Projects in the spring,” said Ken Cobleigh, Managing Director and Counsel for AIA Contract Documents Content. “We continue to see a demand for incorporating sustainable elements in projects. The AIA Contract Documents program continues to revise existing documents and develop new documents and guides, as necessary, to remain current with trends and changes in the industry and law.”

The new AIA Contract Documents created for use on sustainable projects include:
    1. A101™-2007 SP, Standard Form of Agreement between Owner and Contractor, for use on a Sustainable Project where the basis of payment is a Stipulated Sum
    2. B101™-2007 SP, Standard Form of Agreement Between Owner and Architect, for use on a Sustainable Project
    3. A201™-2007 SP, General Conditions of the Contract for Construction, for use on a Sustainable Project
    4. C401™-2007 SP, Standard Form of Agreement Between Architect and Consultant, for use on a Sustainable Project
    5. A401™-2007 SP, Standard Form of Agreement Between Contractor and Subcontractor, for use on a Sustainable Project
AIA Document D503™-2011, Guide for Sustainable Projects, including Agreement Amendments and Supplementary Conditions, was released by the AIA in May 2011. In the short time since it was released, over 4000 users have downloaded the Guide. In addition to providing model language that may be used to amend or supplement AIA Contract Documents for design-bid-build projects, the Guide discusses the applicability of key concepts to other delivery models such as design-build, construction management and integrated project delivery.

Because the AIA believes the Guide is an important resource for the design and construction industry, it is available as a free download at  The new documents will be available in the first quarter of 2012 as part of the new AIA Contract Documents service and AIA Documents on Demand®. To purchase these and other AIA Contract Documents, please go to

Wednesday, 19 October 2011

Construction material prices unchanged in September

While the nation’s wholesale prices increased for the first time in five months, construction materials prices were unchanged in September, according to the Producer Price Index (PPI) report by the Department of Labor. Construction materials prices decreased 0.2 percent for the quarter, but are 8.1 percent higher than one year ago.

“Despite today’s report, there is no reason to believe that construction materials prices will generally decline during the months ahead, even if the global economy continues to soften,” said
Associated Builders and Contractors Chief Economist Anirban Basu.

“For now, commodity investors appear heavily focused on the ongoing slowdown in global growth," said Basu. “The economic issues in Europe are now well known and have been thoroughly discussed, but China and other emerging nations are also experiencing their own set of economic problems.

“In short, the expectation is that the demand for commodities will not be quite as brisk from this point forward,” Basu said. “Therefore, it is likely that materials prices are no longer on the rise.”

Generally, metal prices trended downward for September. Nonferrous wire and cable prices dropped 3.5 percent in September and were down 0.8 percent for the third quarter. However, prices were still up 9.3 percent year-over-year. Steel mill product prices slipped 0.6 percent last month, 1 percent lower for the quarter, but are still 13.5 percent higher from one year ago. Similarly, iron and steel prices were down 0.1 percent for the month, down 0.2 percent for the quarter, but up 13.8 percent over the past twelve months.

However, not all metal product prices were down for the month. Fabricated structural metal product prices were unchanged in September and the quarter, but are 5.2 percent higher from September 2010. Prices for plumbing fixtures and fittings inched up 0.1 percent on a monthly basis, up 0.5 percent for the quarter, and 2.8 percent higher from one year ago.

Prepared asphalt, tar roofing, and siding products fell 2.3 percent in September, were down 1.5 percent for the quarter, but are up 3.7 percent over the past twelve months. Prices for softwood lumber fell 1.2 percent in September, but were up 1.4 percent for the quarter and rose 3.7 percent from the same time last year. Concrete product prices were up 0.1 percent for the month, up 0.3 percent for the quarter, and are 0.3 percent higher compared to September 2010.

Crude energy prices jumped 7.7 percent in September as crude petroleum prices rose 23 percent. Crude energy prices were down 0.5 percent for the quarter, but were up 20.3 percent over the last twelve months. Overall, the nation’s wholesale prices were up 0.8 percent for the month, up 1 percent for the quarter and are up 7 percent from one year ago. Read More.

Friday, 14 October 2011

NLRB extends deadline for displaying new NLRA posters

The National Labor Relations Board has extended to Jan. 31, 2012, the deadline for employers to display posters notifying employees of their right to organize. The NLRB postponed its original Nov. 14 deadline “to allow for enhanced education and outreach to employers.”

The new rule requires all private-sector employers, including employers with or without union work forces, subject to the National Labor Relations Act to display posters in “conspicuous places, including all places where notices to employees are customarily posted.” In addition to the physical posting, the rule requires every covered employer to post the notice on an Internet or intranet site if personnel rules and policies are customarily posted there. The notice must also be posted in another language if at least “20 percent of an employer’s employees are not proficient in English but speak the same foreign language.”

For more information, visit the NLRB’s Frequently Asked Questions or contact the agency at or (866) 667-NLRB.

Thursday, 13 October 2011

NC data hub grows; Facebook begins construction on second building

Presenting what the company describes as innovative, energy-efficient technology, Facebook officials with the social-networking behemoth showed off the first of what could eventually be a three-building data center in Rutherford County, the Charlotte Observer reports.

The first building, scheduled to go online in March, will be capable of serving half the 800 million users now on Facebook, company officials said. Construction begins immediately on a second building, expected to be completed by September 2013.

The data center, about 75 miles west of Charlotte, will house well beyond tens of thousands of servers, although company officials will not give a specific number. The servers will be home to much of Facebook's daily traffic - which now comes from more than 800 million users, producing 250 million daily photo uploads, and checking out any of 900 million "objects," such as group pages or events.

The $450 million data center will serve the Eastern U.S. and Europe; Facebook's only other facility of this kind is in Prineville, OR.

The tour of the Facebook campus underscored state officials' efforts to lure high-profile companies to North Carolina to build data centers with the help of incentives. Companies have cited the state's low-cost electricity, ready access to water for cooling purposes and significant state building incentives in their decisions to locate here.

Facebook, based in Palo Alto, CA, is eligible for NC tax breaks and can receive up to $11.4 million in incentives from Rutherford County. More than 30 of the announced 42 jobs have been filled, and the second building is expected to increase the number of permanent jobs. Read More.

Wednesday, 12 October 2011

Winston-Salem ranked 2nd best downtown in nation by website

Winston-Salem was ranked second best downtown in the country according to the website. "Winston-Salem's downtown works a little like magic," the site says. "Once you step into the historic district of Old Salem, you may as well have stepped back into 1772." Indianapolis won the title of best downtown on the site.

According to the Winston-Salem Journal, the site's staff considered a downtown's entertainment options, its planning, architecture and green spaces. "These downtowns are well thought out, walkable and easy to navigate," the site reads. The site is owned by a company called Journal Communications which was co-founded by Alex Haley, author of "Roots." is "a resource of more than 500 of America's best places to live, work, play, explore and belong."

A number of other North Carolina cities and places made other top 10 lists on the site. Charlotte was No. 1 on the list of most-manly cities in the United States.

The Piedmont Triad Farmers Market was ranked seventh on list of top 10 farmers markets. Lexington's Barbecue Festival was ranked as the fourth-best food festival. North Wilkesboro was the fifth-best place to ride a bike, and Smithfield ranked ninth. Charlotte was ranked the 10th-best city in which to be a book lover.

Rocky Mount was the 10th-best water city. Greensboro's Carolina Film and Video Festival was the fourth-best film festival, and Asheville's ActionFest was the ninth-best film festival. Fayetteville was ranked as the sixth-best city for high school football and as the 10th most "death-defying" city. Asheville was ranked as the No. 2 city for foodies and as the ninth-best golf city.

Fayetteville's Cape Fear River Trail was the eighth-best hiking trail. Fayetteville's Cape Fear Botanical Garden was ninth on the "Top 10 Gardens to Inspire" list, and the Daniel Stowe Botanical Garden in Gastonia was in the No. 8 spot.

Asheville's McCormick Field was second on the site's list of "Top 10 Minor League Baseball Stadiums Worth Visiting." Grainger Stadium in Kinston was fourth; Fieldcrest Cannon Stadium in Kannapolis was seventh.

Statesville's Museum of Mountain Bike Art and Technology was ranked seventh on the "Top 10 Fun and Unusual Museums" list, and the Ava Gardner Museum in Smithfield was No. 2.

Charlotte was the sixth-best city for college grads and third on the "10 Green Cities" list. Greensboro was the sixth most green city. Dunn's Raven Rock State Park was the seventh-best "place to smooch," and Asheville was ranked 10th. Rocky Mount was the third most pet-friendly city; Asheville the seventh. Read More.

Monday, 10 October 2011

Significant increase in nonresidential construction as private sector demand continues to inch up

Construction employers added 26,000 jobs between August and September as the industry’s unemployment rate dropped to 13.3 percent, according to an analysis of new federal employment data released today by the Associated General Contractors of America. Association officials said the increase is the first significant change in construction employment levels since February and reflects growing private sector demand for nonresidential construction projects.

“These numbers give us a taste for how investing in construction activity can really boost overall employment figures,” said Stephen E. Sandherr, the association’s chief executive officer. “However, the real question is whether these numbers are an anomaly or the start of a positive trend.”

Total construction employment now stands at 5,551,000, compared to 5,514,000 in September 2010, a 0.7 percent increase. Association officials added that the bulk of the construction gains came from the nonresidential sector. Nonresidential building construction added 13,200 jobs in September while nonresidential specialty trade contractors added 10,700 jobs and heavy and civil engineering construction added 6,200. Meanwhile, residential building contractors added only 1,800 jobs while residential specialty trade contractors lost 5,600 jobs.

Sandherr noted that the industry’s 13.3 percent unemployment rate was an improvement from the 17.2 percent rate of a year earlier but far above the all-industry rate of 9.1 percent. He cautioned that much of the decline in the industry’s unemployment rate was caused by construction workers leaving the industry, as opposed to returning to the sector’s workforce.

Association officials cautioned that the increase in construction employment will be short-lived should Congress and the administration continue making cuts to infrastructure and construction programs. They noted that construction programs accounted for more than half of the fiscal year 2011 federal budget cuts and that Congress and the administration have yet to finalize aviation, surface transportation or water system legislation that expired years ago.

“With private sector demand inching back up, the construction industry is finally on the brink of recovering from years of hardship and job losses,” Sandherr said. “If Washington continues to cut infrastructure funding instead of addressing out of control entitlement spending, the industry will lose whatever momentum it picked up in September.”
Read More.

Sunday, 9 October 2011

Ninety percent of construction disputes are fact-driven

Guest Posting by Matthew J. DeVries, Stites Harbison, PLLC
Best Practices Construction Law

Facts are important. More appropriately, facts are really important! I have found that a construction dispute with good facts and bad law can, nonetheless, result in a good outcome. Rarely, however, do you find that bad facts and good law will result in a good outcome.

Since facts are so important, what can you do to develop and preserve the facts necessary to help you win your case? Here are some tips:

1.Keep written records. Although conditions in the field may constantly change, make sure you have a process in place to reduce to writing all pertinent facts that affect construction. This may be a changed condition, interference by another party, unusually severe weather conditions, a change in material price, etc. If you have a pertinent conversation by phone or in person, make sure you follow-up the conversation in writing. I cannot tell you how many times I have heard, "Well, they agreed to the change order on the phone."

2.Record just the facts. If you take the time to record the facts in writing, make sure you leave out all the informal language and other information that will make a good exhibit in litigation. There is no need to tell the owner's representative that he is an idiot (...even if he is...) in a request for information. There is no need to tell the contractor's project manager that he is incompetent (...even if he is...) in an email responding to the RFI. Stick to the facts.

3.Organize your information. Whether you keep hard-copy documents or you have incorporated the paperless project, make sure you take the time to use a folder structure system that organizes the information in a chronological manner. This will help you (and your attorney) in the event a dispute arises.

Although this is my own personal opinion, remember that 90% of disputes are fact-driven ... which means that you need to get the facts right, reduce them to writing, and keep them organized. Read More.

Thursday, 6 October 2011

Industry leaders invited to October 27 Piedmont Construction and Design Symposium

The October 27 Piedmont Construction and Design Symposium is a one-day event that will bring project owners together with contractors, lenders, government and labor representatives in the Piedmont Region.

The Symposium will preview the future of the Piedmont design and construction industry and explore regional economic drivers: biotechnology, biopharmaceuticals, higher education, transportation and healthcare, as regional leaders discuss future construction and development across the Triad.

Join industry leaders, legal experts, and government representatives in discussion of new federal and state statutory requirements and their intended and unintended impacts on North Carolina's design and construction industry.

The Piedmont Construction and Design Symposium, “Driving Forces in the New Regional Economy,” is sponsored by Goler Community Development Corp. and Goler Piedmont Contractors Resource Ctr., Winston Salem State University, Wake Forest University, and the Anderson Center at WSSU.

The Symposium will is being held on Thursday, October 27, from 9 am to 4 pm in Albert H. Anderson Center at WSSU, 601 S. Martin Luther King, Jr. Dr. Winston-Salem. Call 336-750-2120 or click Here for details.

Upturn in NC construction contracts continues

The value of North Carolina construction contracts signed in August totaled more than $1.1 billion, an increase of 11% compared to a year ago, according to McGraw-Hill Construction.

The nonbuilding and nonresidential sectors led the way in August. Nonbuilding, which includes infrastructure work, totaled $182.4 million for the month, an increase of 59% compared to the same period of a year ago. Nonresidential contracts totaled $474.1 million, an uptick of 35%. The volume of residential contracts declined, however, by 14%, to tally $469.4 million.

On a year-to-date basis, North Carolina’s 2011 construction contracts total $9.9 billion through August. That represents a 3% overall improvement compared to 2010’s pace.

So far, however, only the nonbuilding sector is positive. Through August, this construction category is 64% ahead of last year’s volume, with an estimated total of more than $3.1 billion. Residential contracts have tallied nearly $3.8 billion, or 12% behind 2010’s pace. Nonresidential contracts are also lagging by 12% compared to a year ago, and total nearly $3.1 billion so far. Read More.

Wednesday, 5 October 2011

House plans October vote to repeal 3 percent withholding

The U.S. House of Representatives is expected to begin consideration of a bill to repeal the 3 percent withholding mandate next week. The bill will first be considered by the House Ways and Means Committee, followed by a vote on the House floor as early as the week of Oct. 24.

Starting Jan. 1, 2013, all federal and state contracts for goods and services will be subject to a 3 percent income tax withholding on each and every payment over $10,000 to a contractor. The requirement also applies to large local governments that make $100 million or more in annual expenditures for goods and services. This mandate will be bad for the construction industry.

Both the Associated General Contractors and Associated Builders & Contractors are asking contractors to contact their Representative to urge them to cosponsor and support passage of H.R. 674 and to encourage their employees to do the same.

Visit AGC’s 3 percent withholding website to find additional resources, including talking points, IRS regulations, videos on the impact of this legislation and ways to become involved. Additional information is found on the ABC website.

Tuesday, 4 October 2011

Nonresidential construction spending increases 1.6 percent

In a bit of unexpected news, the Associated Builders and Contractors reports nonresidential construction spending, which includes both privately and publicly financed construction, was $553.1 billion in August, up 1.6 percent for the month and 0.1 percent higher from one year ago. “This should be considered a bit of unexpected good news,” said ABC Chief Economist Anirban Basu. “Current economic conditions pointed towards a much less rosy prediction of construction spending."

According to the October 3 report by the U.S. Census Bureau, private nonresidential construction spending inched up 0.2 percent in August and is 5.6 percent higher from one year ago. Public nonresidential construction spending was 3 percent higher for the month – the largest monthly increase since February 2009 – but was down 5.8 percent compared to the same time last year.

Meanwhile, twelve of the sixteen nonresidential construction subsectors posted increases for the month, including conservation and development, up 6.5 percent; public safety, 5.3 percent higher; sewage and waste disposal, up 4.5 percent; and highway and street, 3.6 percent higher. Five subsectors experienced growth in construction spending from August 2010: power, up 21.5 percent; commercial, 9.1 percent higher; conservation and development, up 6.5 percent; health care, 3.3 percent higher; and manufacturing, up 2.9 percent.

In contrast, four construction subsectors had decreases in spending for the month: lodging, down 5.6 percent; communication, 3.7 percent lower; commercial, down 2.7 percent; and health care-related construction, 0.3 percent lower. Eleven subsectors experienced reductions in construction spending over the last twelve months including lodging, 28.6 percent lower; religious, down 16.9 percent; sewage and waste disposal, down 13.2 percent; water supply, 12 percent lower; and amusement and recreation, down 11.6 percent.

Residential construction spending increased 0.9 percent for the month, and is up 2.9 percent over the last twelve months. Overall, total construction spending – which includes both nonresidential and residential – rose 1.4 percent in August, and is up 0.9 percent compared to August 2010.

Many economists continue to stress the possibility of another recession, which, among other things, would have the impact of further constraining demand for construction services,” Basu said.

“Over the past month, both publicly and privately financed construction spending grew – an indication that recessionary forces are being held at bay for now,” said Basu. “Among the leading categories of monthly growth were conservation and development, public safety, and sewage and waste disposal.

“Because construction spending represents a lagging indicator of economic activity, it may be that the growth in construction spending last month is largely a reflection of the economy as it had been entering the year,” Basu said. “Since that time, the economy has begun to dim, and presumably so too has the outlook for construction spending.

“It is worth noting that publicly financed construction expanded more rapidly than privately financed construction. This is certainly a reversal of recent previous reports,” said Basu. Read More.

Sunday, 2 October 2011

Construction materials industry pushes for stimulus funding

The transportation construction lobby is primed to pave Capitol Hill with an aggressive campaign aimed at scoring what could be a massive stimulus for the struggling industry.

And it is spurred by two multibillion-dollar proposals, backed by Republicans and Democrats, that suggest their blitz might work, despite Congress’s zeal this year for spending cuts, says

President Barack Obama is calling for monumental infrastructure investments in the name of job creation, using much of his address earlier this month before a joint session of Congress to tout as much.

Key congressional members, meanwhile, are pushing for a long-term transportation reauthorization bill that could include billions of dollars above initial expectations. Such a bill, in turn, could translate into lucrative, job-creating projects.

“The opportunity is now, front and center, for us to make our case,” said Andy O’Hare, vice president of regulatory affairs for the Portland Cement Association. “We certainly welcome and are working for a lifeline for all of these hard-hit markets.”

“Our efforts so far have borne fruit, and we’re going to be just as active in the next six months, which will be a critical time,” said Pamela Whitted, vice president of government affairs for the National Stone, Sand & Gravel Association.

Efforts range from traditional inside-the-Beltway lobbying fare of lawmaker meetings and staffer briefings to more circuitous outreach efforts that seek out politicians on their home turf, such as meeting them while they’re back in their districts and inviting them to tour production facilities.

Take the National Asphalt Pavement Association, which has been petitioning congressional supercommittee members in their home districts while simultaneously pressing the Senate Finance Committee and congressional Ways and Means committees to keep its member companies in mind.

“It started over the August break — we were really hammering Congress really hard, and this month is a critical month to keep the pressure on the House and Senate,” said Jay Hansen, the National Asphalt Pavement Association’s executive vice president. “It’s definitely been busier this year than in past years, and we’re going to sustain what we’re now doing. I take it as a good sign that we’re at least at the point where government is paying attention.”

Construction material companies have struggled in recent years, as the need for the metals, concrete, rock and the like have waned along with road building, bridge repair and most every other transportation project that governments could conceivably defer or delete to save a dime. The companies and affiliated organizations in some cases also scaled back their government affairs efforts, too.

The Obama-driven federal stimulus plan of 2009 helped the industry. But the effects for the construction materials industry were fleeting, executives say. Read More.