Wednesday, 30 November 2011

Census Bureau reports NC ranks second in net inflows

The Census Bureau recently released reports on geographic mobility, which could give some indiation of where demand for construction may be found.  In his digest of the Census data, Ken Simonson, Chief Economist, Associated General Contractors of America observed that North Carolina ranked second in net inflows (the total amount of moves into the state minus moves out).

"The percentage of people who changed residences between 2010 and 2011-11.6%-was the lowest recorded rate since the Current Population Survey began collecting statistics on the movement of people in the United States in 1948," the Census Bureau reported on geographical mobility.

The total number of interstate moves declined from 7.9 million people in 2005-2006 to 6.7 million in 2009-2010. The top three destinations were Texas, 487,000 moves from other states, U.S. possessions and foreign countries; Florida, 483,000; and California, 445,000. California, Florida and Texas were also the top three states (in that order) for outmigration but they differed greatly in net flows: Texas added a net 75,000 residents from elsewhere (the largest net inmigration), Florida added 55,000 (third) and California lost 129,000 (the largest net outmigration).

The next largest net outflows were from New York, -94,000; Illinois, -74,000; and New Jersey, -66,000. North Carolina ranked second in net inflows (56,000).  Read More.

ABC and AIA announce contract document partnership agreement

The American Institute of Architects (AIA) and Associated Builders and Contractors (ABC) announced a marketing partnership agreement, designed to foster a greater understanding and exchange of ideas between architects and contractors in the construction community.

“We see this as the beginning of a larger, long-term partnership between the AIA and ABC,” said AIA President, Clark Manus, FAIA. “For more than 100 years, the AIA has been committed to promoting greater industry collaboration among architects, owners and contractors, and this partnership is a natural extension of this work. ABC’s decision to partner with the AIA speaks volumes about the fair and balanced nature of AIA documents and their universal acceptance in the industry.”

“We believe this partnership will provide value to ABC members by giving them access to more resources to help them win work and deliver that work safely and productively,” added ABC President and CEO Mike Bellaman. “This partnership will allow for a healthy exchange of best practices and enhance relationships between architects and contractors, as well as bring more value to the industry.”

AIA offers more than 100 documents including contractor/subcontractor agreements and forms; owner/contractor agreements; application and certificate for payment; and change order forms. AIA Contract Documents are revised as necessary in order to remain current with trends and changes in the industry and law, and to balance the interests of all parties. AIA solicits counsel from more than a dozen industry groups when creating or updating documents, including Associated Builders and Contractors, which, under the partnership, will have increased involvement with the AIA Contract Documents program.

As part of the partnership, AIA will provide a number of benefits to ABC members, including a discount on the purchase of any retail-priced AIA Contract Document software license and access to AIA Contract Documents education programs. Read More.

Tuesday, 29 November 2011

NC gas tax cap falls short

North Carolina House members agreed Monday to temporarily cap the state's gasoline tax - on the verge of sharply rising in the new year - but the Senate decided to leave Raleigh without taking up the idea, saying it wasn't the right time to consider it, reports the Winston-Salem Journal.

The full House tentatively backed a bill keeping the state motor fuels tax at 35 cents per gallon through June 30. The gas tax is recalculated automatically twice annually - Jan. 1 and July 1 - based on a formula linked to wholesale gas prices. The Legislature's nonpartisan fiscal staff estimates the state tax would grow to as high as 38.9 cents without the cap.

"Maybe 4 cents on the gallon is not a lot," said Rep. Edgar Starnes, R-Caldwell, before the House voted 96-23 in favor of the bill. "But if you're unemployed or underemployed, then every penny counts and these are the people that we need to help at this time."

The measure could receive final House approval Tuesday, but it didn't matter because the Senate scheduled to hold a procedural session just after midnight Monday and go home without taking up any more legislation. That means the bill is dead.

Senators were less inclined to lose road-building funds that have been projected in approving this year's budget. Senate leader Phil Berger, R-Rockingham, said members are concerned that Democratic Gov. Beverly Perdue, not the Legislature, would decide which projects get delayed. The House bill doesn't make those decisions.

"Now is not the time for us to be dealing with that issue," said Berger, adding that the Senate would be glad to examine the gasoline tax during the budget-adjustment session next May, and create a plan that could actually cut the tax, not cap it. Any bill also would be sent to Perdue, who would be asked to make the bill law or veto it.

The cap would have meant $95.8 million less in revenues, although the bill's top advocate, Rep. Mitch Gillespie, R-McDowell, said about a third of that loss would be canceled with yet-used money sitting on the bottom line in the Highway Fund.

Supporters of freezing the cap at the current rate said it would give relief to the public while promoting accountability within the Department of Transportation. The House bill would have directed a study of the DOT tax structure. Some people believe the automatic recalculation of the tax keeps the issue from becoming too political. Others argue it prevents lawmakers from having to make tough decisions on the gas tax.

"This is the first step in the right direction," said Rep. Mike Stone, R-Lee.

North Carolina's current combined federal-state gasoline tax of 53.7 cents ranks ninth-highest in the nation, the American Petroleum Institute said. North Carolina's state tax grew by 2.5 cents per gallon this past July.

Opponents said the gas tax goes up because materials to build roads - asphalt among them - increase at the same time because they're made from petroleum, too.

"If we don't have these dollars to look after our highway system, we're making a sad mistake," said Rep. Jim Crawford, D-Granville.

Jim Trogdon, the chief operating officer at the Department of Transportation, said the agency estimates capping the tax for six months would mean 400 miles of road resurfacing and 72 bridge repairs would be delayed. The bill, which would have required cuts throughout the agency, also could have meant longer lines at driver's license offices, he said.

"This is a true and significant impact," said Trogdon, adding that there are also no promises limiting the tax will result in lower prices at the gas pump. Cap supporters said the state would still spend more money overall on bridge and road repairs with a cap.

Christie Barbee, a lobbyist for the Carolina Asphalt Pavement Association, told the House Finance Committee the bill also could have placed up to 2,800 construction jobs at risk, although Gillespie said later he believed the amount was overstated. Still, the bill passed the committee by a 28-3 wide margin, with several Democrats joining Republicans in backing what's considered a politically popular measure. Read More.

Monday, 28 November 2011

North Carolina ranked 3rd 'Best State for Business'

For the second consecutive year, North Carolina has been ranked third in the nation in Forbes magazine's "Best States for Business" list.

The News and Observer reports North Carolina was ranked tops in regulatory environment, second in business costs and third in labor supply.

Among the other measures that figured into the rankings, North Carolina's growth prospects ranked 15th; the state was 20th in economic climate and 34th in quality of life. Utah ranked first in the list and our neighbor to the north, Virginia, came in second for the second consecutive year.  Read More.

Friday, 25 November 2011

Construction jobs decline 2.8 percent in NC

The number of construction jobs in North Carolina declined 2.8 percent over the past year, according to the News and Observer based on data released  from the Associated General Contractors of America. Between October 2010 and last month, the state lost 4,900 jobs, with total construction employment dropping from 175,000 to 170,600.  The AGC calculates the numbers by analyzing data collected by the U.S. Department of Labor. That percentage decline ranked North Carolina 39th among the country's 50 states.
The construction industry has been mired in one of its worst downturns on record. The credit crunch combined with the bursting of the residential housing bubble has led to a severe decline in ommercial and residential real estate construction.

Construction employment rose in half the states over the past year, according to the AGC. The top performing states were North Dakota and Oklahoma, places that have benefited from construction related to the energy industry. Construction employment declined the most in Georgia, dropping 9.5 percent, or 13,800 jobs. Read More.

Wednesday, 23 November 2011

Gas cap tax issue surfacing in NC House

The Carolinas Associated General Contractors report some legislators are pushing to lower or cap the gas tax while the General Assembly reconvenes for what is expected to be a short session of only a couple of days or so.

The issue did not surface, despite reports that it could, when the NC General Assembly recently held a brief session. That's partly because of help from NC Go, a coalition of which Carolinas AGC is a founding member, in leading efforts in getting nearly 2,000 emails to legislators urging them not to cap the gas and jeopardize road funding. The email messages centered around the fact that capping the gas tax would place more than 7,000 jobs at risk and set our state back just when we need to be fueling job growth and investing in infrastructure that attracts and retains businesses.

House Majority Leader Paul "Skip" Stam, R-Wake, said some people seem to want the gas tax lowered while increasing road funding. The tax is dedicated for road building and maintenance. In July, the tax went up to 35 cents per gallon, one of the highest gas taxes in the nation. A portion of the tax rises or falls, every six months, based on the wholesale price of gas.

Consideration of the issue might require some procedural tricks by legislators. The adjournment resolution approved by legislators earlier this month limits the legislation that can be considered in the upcoming reconvened session. Stam said the issue, if considered, might have to be part of a conference report already being negotiated by legislators. Read More.

Tuesday, 22 November 2011

Construction surety losses on rise

The construction recession is killing off numerous smaller companies and surety losses are growing, said insurers at the International Risk Management Institute's construction conference in San Diego. But bigger, better-managed companies continue to win jobs and the surety losses overall will be manageable.

Engineering News-Record reports risk managers, brokers and insurers at the conference say the never-ending legal wrangling over scope of coverage has led lawmakers in four states to attempt to assure that construction defects are covered under contractor liability insurance. As a result, a few insurers reportedly are steering clear of writing liability coverage for contractors in those states.

Insurers say they see two kinds of contractors as the construction recession reaches its bottom: strong companies with enough cash and backlog from the good times to ride out the trouble and win new work, and smaller, marginal prime contractors and subcontractors who to stay alive are switching markets and submitting overly competitive bids. Those companies regularly default on work in progress or shut their doors.

Surety losses are rising, but won't go so deep as to erase profit margins, says Roland Richter, vice president of Liberty Bond Services, a part of Boston-based Liberty Mutual Group. For the most part macroeconomic matters remained in the background at the IRMI Conference.. That allowed the risk managers, brokers and insurers to turn some of their attention to sessions involving the kind of legal hairsplitting that one construction CEO not in attendance described as a "two-coffee" seminar.

Some of them were worth staying awake for, especially the session that concerned the question embodied in lawsuits in several states about whether a construction defect is an "occurrence" under a general liability policy. Insurers and brokers at the conference generally agreed that 20 years ago construction defects were what you bought liability coverage for. But recent cases in Hawaii, South Carolina, Colorado and Arkansas have thrown the matter into doubt.

Contractors in those states convinced lawmakers to pass new statutes defining an occurrence or trying to clarify the issue, and a few insurers, according to scattered and unconfirmed comments at the conference, have stopped writing general liability policies for contractors in those or other states.

But such reported "carve outs" remain unusual.  In South Carolina, the courts couldn't produce consistent rulings. Attorney Patrick J. Wielinski said that because consecutive rulings in South Carolina had gone "covered, not covered, covered, not covered" on defects it had become "hard to plan and you can't predict." Meaning, neither insurers nor contractors could be sure what coverage they were getting and paying for.

To settle the matter in Arkansas, lawmakers adopted a statute that requires all commercial general liability policies to contain a definition of occurrence in the form of an endorsement.  In general, in order for a defect to be classed as an occurrence, it has to be unintended and unforeseeable.

While some insurance executives say such coverage was always intended for and priced to include defects, attorneys for insurers don't see anything strange in challenging definitions of such basic concepts because, as one insurer's lawyer said, each must be decided within its own context "and every project is unique." "We don't want to be providing coverage for something we didn't intend to cover and didn't price into the premium," he said.

Even so-called manuscript endorsements, which are non-standard and negotiated by the parties, can be troublesome in trying to fix the occurrence issue if the wording isn't sound, says Jeffrey J. Vita, an attorney who has represented contractors against insurers. "Be careful in creating manuscript endorsements that you aren't creating more problems than you solve."

Contractor general liability in most policies would cover injuries or property damage caused by a contractors' work, including damage to the property. Builders risk coverage, on the other hand, would insure against losses from events such as fires or storms while a contractor is working on a project. Read More.

Monday, 21 November 2011

Raleigh GC receives new assessment-based BIM credentials

Harry McKinney, Jr. of Clancy & Theys Construction Co., Raleigh, NC, was among the first to receive a new national accreditation in the use of Building Information Modeling (BIM), a process that relies on computer-generated models to better manage construction projects. The professional accreditation, which is being offered by AGC of America, is the first assessment-based credential to recognize construction professionals on their ability to use the process.

McKinney was one of 34 construction professionals nationwide who tested successfully to receive the new professional accreditation, the Certificate of Management-Building Information Modeling (CM-BIM). Candidates first had to complete the BIM Education Program, a series of four courses the association developed to help construction professionals learn how to use the construction process. To date, more than 3,800 professionals across the country have entered the association’s education program.

 “I have always been interested in truly collaborative construction, where designers and constructors work together to make an incredible building with all aspects of the job carefully thought through,” said McKinney “Getting credentialed means that I can be considered a trusted source of all things BIM-related for my company, and for our clients.”

The education program and assessment-based certificate were developed by a group of industry experts assembled by the association. “This new credential is a way to recognize professionals who have demonstrated a real mastery of the building information modeling process,” said Stephen E. Sandherr, AGC’s chief executive officer. “It is yet another way that this association is helping the construction industry embrace new methods of project delivery.”

Sandherr added that the association plans to make continuous updates to the education program and the assessment to make sure it keeps pace with technology developments. Read More.

Construction recycling rises sharply in NC

A combination of improvements in local recycling programs, recycling policies and the development of a strong private infrastructure has led the recycling and composting to rise sharply in North Carolina, according to Waste Management World.

According to a recent study, published by the state's Department of Environment and Natural Resources (DENR), over 15,000 North Carolinians are now employed in the recycling industry, recycling hundreds of thousands of tonnes of materials such as construction waste and plastic bottles.

One of the key reasons cited for the increase is rise in the number of households receiving curbside recycling collection to a record high of 1.62 million.

The study further claims that more recyclable commodities are moving away from the waste stream and into the stream of commerce. The rise is in part attributed to a rising number of recycling programs, such those to recycle carpet and shingles now can be recycled in locations across the state.

According to the DENR, a combination of effective policies, active recycling business growth, expansion of items that are recyclable, and momentum in local government recycling programs has helped to reduce dependence on landfill and to provide commodities to North Carolina material processors and manufacturers.

The study's major findings include:
  • Local government recycling programs have built a solid track record of capturing recyclable commodities from the waste stream and have recently begun a new period of expansion.
  • Recent policy measures designed to divert recyclable commodities from landfills are showing strong signs of success. The state's plastic bottle recycling rate has increased by almost 50% since the disposal ban was passed in 2005.
  • Recycling is steadily contributing to job creation and business growth in North Carolina, while providing valuable materials to in-state processors and manufacturers.
  • Even as the construction economy struggles in North Carolina, private construction and demolition facilities are increasing their recycling efforts. An all-time high of 112,315 tons (102,000 tonnes) of construction waste at private facilities was recycled in 2010.
  • Composting is an active area of recycling expansion and can be expected to contribute increasingly to the state's waste reduction efforts. Commercial composters processed more than 220,000 tons (200,000 tonnes) of organic materials in 2010.
  • Additional materials are becoming recyclable as collectors, processors and end-users boost their appetite for a wider range of recovered products and commodities.
"The opportunities continue to present themselves to make recycling both a core environmental and economic policy of the state," said DENR Secretary Dee Freeman. "It is a proven green job and green business creator and it delivers a wide range of environmental benefits. We can expect more growth ahead in the recovery of key commodities."

However, despite the momentum achieved in the past few years, the DENR warns of challenges ahead, specifically improving the market value for materials such as construction wastes, and expanding the capture of organic materials for composting and energy generation.  Read More.

Friday, 18 November 2011

Turner Construction and Adams Electric honored for 2011 ABCC Projects of the Year

The Associated Builders and Contractors of the Carolinas announced the 2011 Projects of the Year at the Tenth Annual Excellence in Construction Award Banquet at the Grandover Resort in Greensboro. Winning top honors were Turner Construction Company and Adams Electric Company.

 Turner Construction Company’s was awarded the GC Project of the Year for the Harrah Cherokee Casino & Hotel project.  Exception coordination and collaboration  allowed the company to deliver a 23-month project in 19 months. Turner employed lean principals, BIM and integrated project delivery with the subcontractors and design team. Seventeen percent of the contract value was awarded to TERO certified subcontractors and vendors.

Adams Electric Company was recognized as the Specialty Contractor Project of the Year winner for work on the Carolinas HealthCare Systems, Carolinas Medical Center-Main.  Adams Electric worked on 12 floors and 7 phases at once during the peak of this project.  The management scheduling required for this effort was complex and challenging all while the work was being executed in an existing hospital adjacent to very sensitive patient care areas.

 For additional information on award winners visit

Thursday, 17 November 2011

Architectural Billing Index climbs 2.5 points in October

After a sharp dip in September, the Architecture Billings Index (ABI) climbed nearly 2.5 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 49.4, following a score of 46.9 in September. This score reflects an overall decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.3, up from a reading of 54.3 the previous month.

“An increase in the billings index is always an encouraging sign,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “We’re seeing some regions and some construction sectors move into positive territory. But there continues to be a high level of volatility in the marketplace with architecture firms reporting a wide range of conditions from improving to uncertain to poor. It’s likely we will see a similar state of affairs in the coming months.”

Key October ABI highlights:
      • Regional averages: Northeast (51.7), South (49.1), Midwest (47.7), West (43.5)
      • Sector index breakdown: commercial / industrial (53.5), multi-family residential (51.3),
      • institutional (47.3), mixed practice (42.0)
      • Project inquiries index: 57.3  Read More.

Wednesday, 16 November 2011

Economic downturn impacts construction insurance industry

Business Insurance Magazine observed a significant decrease in construction insurance spending during the economic recession. "As construction spending fell, there was a near equivalent reduction in construction insurance spending," said Tim Kania, senior vice president of construction at Liberty International Underwriters, a division of Liberty Mutual Group Inc., in NY.

“For nonresidential construction, insurance spending is off  25% to 30%, or even more than that, because rate degradation was going on at the same time,” said Tom Miller, senior vice president at Lockton Cos. L.L.C. in Kansas City, MO. The recession and weak economy hammered the construction industry across all segments, with the sharpest blows hitting builders that specialize in private residential construction, and subcontractors and small contractors in all sectors.

Large, diversified contractors entering the recession with strong backlogs protected their bottom lines as revenues sank. In the face of fierce competition, they have pursued profitable work in their competencies rather than chasing unfamiliar work to increase revenues.

The vast majority of contractors in the US are small businesses. Those that have survived have shed employees and costs, but their long-term health is in question, sources said. “We expect to see more subcontractor failures in the coming months,” said Miller.

“There has been a significant impact on the insurance community because they had less (construction) exposure to insure,” said Paul Becker, Nashville, TN-based chairman of the construction practice at Willis North America, a unit of Willis Group Holdings P.L.C.
New carriers have entered the market, capacity is ample, and rates have been competitive for most construction-related coverages, sources said. But with the downturn, combined with catastrophic losses in 2011, “we're starting to see signs of rate hardening,” said Michael Anderson, U.S. construction practice leader at Marsh Inc. in Philadelphia.

“Insurance companies have come through the downturn and their balance sheets are in pretty good shape,” he added. “How (construction) companies and owners protect themselves is partnering with the right people—not the least expensive, but those who understand your exposure, who have sufficient capacity, longevity and financial stability,” said Kania.
Rates are not as competitive for professional liability, as more contractors take on the added liability for the design as well as the construction of a building, Becker said. Workers compensation rates also may see a hardening in 2012, sources said.

The surety market is “healthy and profitable,” said Rick Ciullo, chief operating officer at Chubb Surety, a unit of Chubb Corp. in Warren, NJ. “Contractors with good business plans and strong financials should have no problems finding surety.”

“We have not seen a wholesale closure of businesses or a big uptick in loss ratio,” he said. In 2008, Ciullo said, “we thought it would be a bloodbath in 2011 and it would show up in surety. That hasn't happened.” He added, “We expect failures to increase when the economy picks up” as weakened contractors can't qualify for surety and lose business that becomes available.

Michael Bosse, chair of law firm Bernstein Shur Sawyer and Nelson P.A.'s construction practice group in Portland, Maine, said that with money tighter, contractors are operating with fewer and often less-skilled employees. “In my practice in the past couple of years, I've seen many more performance bond claims than I ever had before,” he said. As a result, contractors have not been able to get bonding, “which cuts them out of a large sector of government work,” he said.

State and local governments, which depend on property taxes, will have less money to spend on needed infrastructure repair, including roads and bridges. Versions of a model, known as P3, in which architects, engineers and builders partner in a risk-bearing consortium, are popular in Europe and Canada and “is starting to take hold in the U.S.,” said Henry Lombardi, executive vice president for Aon Risk Solutions' construction services group in NY. But the model creates challenges for insurers, who are trying to develop coverages for those projects. Each state has different legislation for these partnerships and “there is no uniformity in contracting,” he said.  Read More.

Tuesday, 15 November 2011

Charlotte auto dealers fuel commerial construction growth

Several successful Charlotte car dealers are strengthening the local economy and the commercial construction industry by upgrading dealerships. New facades and the addition of upscale customer areas that include coffee bars and internet service are all a reflection of the success that local auto dealers are experiencing. At least one local dealer has plans to build an auto mall that will include larger showroom areas and increased customer services.

While the number of commercial building permits issued in Mecklenburg County last year rose over the previous year, the 5,517 permits issued in 2010 is still less half of that seen during Charlotte’s boom days, according to the Charlotte Observer.  Most permits, roughly two-thirds, were issued for renovations rather than new buildings, continuing a shift that emerged last year.

The auto industry has always been a key part of Charlotte’s economy and its continued growth is fueling the growth in local commercial construction. Growth is visible on “auto row” along Independence Boulevard from Charlotte center to Matthews.
Scott McCorkle's Liberty Buick GMC Trucks is one of many dealerships that are upgrading their facilities. According to Scott McCorkle, “The building just has to reflect the upscale service you get inside.” McCorkle is excited about the construction project underway at his dealership on Independence Boulevard. The new showroom includes a coffee bar, an internet bar and plush carpet in the reception areas. The goal is to highlight the luxury details of the new Buick line of cars and bring awareness to customers regarding the premier services.

“Our customers are doing better and we want a first class building to match our first class service,” says McCorkle.

Local business giant Hendrick Automotive Group was issued a permit for a new Auto Mall in 2003. According to Alysia Osborne at the Charlotte City Planning & Zoning Department, construction has begun on the 48.79 acre project. It will have 315 square feet of retail space with a customer center in the middle of the facility when completed says Osborne.

The AP reports that a typical showroom improvement can cost from $2,000,000 to $15 million. Dealers are adding leather chairs, special lighting, hair salons and food bars to create a nicer experience for buyers and service clients.

In addition to providing an increase in construction, these luxury dealership additions create an increase in the consumption of local products and services. This translates into a healthy boost for the local economy. Read More.

Monday, 14 November 2011

NC church construction picks up

A struggling construction sector that continues to bleed Charlotte's economic recovery hasn't slowed a mini building boom among area houses of worship, reports the Charlotte Observer.
Despite financial uncertainty from the job front to Wall Street, congregations have set aside millions of dollars for major expansions at Calvary Church and Christ Lutheran, both in south Charlotte.
New or renovated facilities have already opened at Providence Baptist, Myers Park Presbyterian and Temple Beth El.

Church leaders say their projects had been planned for years. Work started in the recession, they say, to take advantage of low construction prices and to meet pressing needs of their congregations or the community. "There does come a point if the facilities are poor that people will start to think, 'Wait a minute, we'll be looking elsewhere,' " said the Rev. John Munro, pastor of Calvary, which will soon start work on a $10 million expansion. "But this is not for the glory of Calvary. This is something that allows us to make an impact on future generations."

Adds Al Cadenhead, pastor of Providence Baptist Church on Randolph Road: "We spent several million dollars on a youth building that you can't even see from the road. But we had to have it."

The new construction comes at a time of mixed economic indicators for houses of worship. Nationwide, fewer people are attending services. Tithing to Protestant denominations, as a percentage of income, has fallen to its lowest level in more than 40 years, according to the annual "State of Church Giving" report by Empty Tomb Inc., an Illinois-based Christian research firm.

Across Charlotte, the "City of Churches," some congregations are struggling to survive while others continue to expand in numbers, dollars and space. Myers Park Presbyterian's new $8.1 million outreach center was part of a $30 million campaign goal reached by the congregation in 2008.

After first eliminating a longstanding debt, Calvary members put more than $4 million in the bank for their planned 51,000-square-foot expansion, mostly for children and teen programs.
"We've just run out of space," says Munro. "It wasn't that we said, 'Yippee, we want another building.' "

In its report, Empty Tomb says churches are spending more of their donations on themselves, and less on traditional missions, outreach and other "benevolences." Co-author Sylvia Ronsvalle says the 2009 figures support a 20-year-plus trend among churches to add amenities to keep or attract members. Churches, she says, have realigned themselves "along the lines of consumer acceptability" by building gyms, childcare centers and other amenities to build their congregations. Read More.

Saturday, 12 November 2011

Credit crunch plagues construction industry

The American Institute of Architects (AIA) released a comprehensive report which concludes that the major obstacle holding back job creation in the United States is the persistent lack of construction financing, despite record low interest rates.

“This report should lay to rest any doubt about what is a key source for holding back job creation in the United States,’ said Kermit Baker, chief economist of the AIA. “It is the lack of financing especially to the design and construction sector, which accounts for $1 in $9 of U.S. Gross Domestic Product.”

Relying on data compiled by McGraw-Hill Construction and Reed Construction Data, the report found that:

* The share of projects stalled due to financing problems through August 2011 has almost doubled since 2008;
* One-in-five stalled projects are directly resulting from financing problems;\
* Financing problems account for a higher share of stalled projects in the education and multi-family sector;
* More than 25 percent of projects reported as stalled due to the credit crunch could qualify for LEED, Green Globes or other green certification status;
* Financing issues are less of a factor holding back projects in the manufacturing, private healthcare and retail environments.

“Whatever, the reason – be it over-regulation, the threat of a double-dip recession or the reluctance to have too many loans on the books, lenders are just not lending to a major job-producing sector of the American economy,” Baker noted. “Until more credit is extended, the potential of non-residential construction to promote greater levels of economic growth will not be realized.”   Read More.

Friday, 11 November 2011

Construction industry associations celebrate pending repeal of 3 percent tax witholding measure

Association official say the pending repeal of the 3 percent tax withholding mandate (The U.S. House of Representatives is expected to vote on a Senate-approved measure this week) will provide some much-needed financial relief to the construction industry.

"The fact contractors won't be forced into providing billions in interest-free loans to the federal government beginning in 2013 will provide some much-needed relief for a hard-hit industry and its struggling workers," said Stephen E. Sandherr, the Associated General Contractors' chief executive officer.

Both the Carolinas Associated General Contractors and the Associated Builders and Contractors of the Carolinas praised the repeal of the 3 percent tax withholding mandate. Cynthia Mills, President and CEO of Carolinas AGC stated, "In September, Carolinas AGC Board members traveled to Washington, D.C. to meet with legislators carrying the message, along with contractors across the country, that this was one of several critical actions needed to assist the nation's hardest hit industry to recover. We are relieved to see one barrier removed as our members seek to be active players in the restoration of our nation's economy."

Associated Builders and Contractors  praised the U.S. Senate for passing legislation to repeal the imposition of the 3 percent withholding tax on contractors (H.R. 674). The repeal measure was passed Oct. 27 by the U.S. House of Representatives.

“The Senate has taken a positive and necessary step today to remove a level of uncertainty in the construction industry, allowing contractors to better plan their long-term businesses strategies,” said ABC Vice President of Federal Affairs Geoff Burr. “Without this burdensome, punitive requirement, contractors that do business with federal, state and local governments will now have the confidence to bid on new projects and create more jobs.  “We encourage the House and Senate to quickly work out their differences on this measure, and send it to the president so he can sign it into law,” said Burr.

Engineering News-Record reported the House had approved a version of the repeal bill on Oct. 27 with bipartisan support. But the Senate added a non-controversial amendment to the bill to provide tax credits to companies that hire veterans, so the Senate's amended version now must go back to the House for a vote. The House is expected to pass the Senate-approved measure. President Obama already has indicated that he will sign it.  Read More.

Thursday, 10 November 2011

Injury rate for NC construction workers well below national average

North Carolina's workplace injury rate remained at a record low in 2010, down by nearly half in the past decade as negligence lawsuits, insurance premiums and training programs pressure employers to improve safety, the News and Observer reports..

The 2010 rate for construction dropped to 3.0 per 100 full-time workers from 3.1 in 2009, well below the national average of 4.0. The 2010 manufacturing rate increased slightly to 3.7 from 3.5 in 2009, but still remains below the national rate of 4.4.

Last year, the state's injury rate was 3.1 cases per 100 full-time workers, one of the four lowest rates in the nation, according to data issued by the N.C. Department of Labor. The agency defines injury as an accident that results in unconsciousness, restriction of physical motion or restriction of the kind of work the injured employee can perform.        

Only Louisiana, Texas and New York have lower workplace injury rates than North Carolina. North Carolina's injury rate has fallen 45.6 percent since 1999, when the rate was 5.7 injuries per 100 workers. The Labor Department will issue on-the-job fatality data in January.

The injury data are not a tally of total injuries in the state but a rate per 100 workers. Thus it's comparable with past years regardless of how many fewer people are working because of automation, layoffs, outsourcing, off-shoring or other cost-cutting strategies. Read More.

Wednesday, 9 November 2011

AGC encouraged by overwelming support of repeal of the 3 perecent tax witholding mandate

The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, issued the following statement in response to the Senate’s vote to repeal the 3 percent tax withholding mandate:

“It is encouraging that an overwhelming majority of Senators understand the urgent need for a vote to repeal the 3 percent tax withholding mandate. Construction employers across the country tell us that this new tax withholding measure will force them to cut staff, scale back equipment purchases and charge more to complete publicly-funded construction projects. We hope the members of the Senate will keep the legislation clean of amendments that might delay final passage. Instead, Senators should follow the president’s advice and work in a bipartisan manner to repeal this punishing tax mandate.” Read More.

Tuesday, 8 November 2011

ABC of the Carolinas will present 2011 Excellence in Construction awards

The Associated Builders and Contractors of the Carolinas will recognize “the best of the best” general contractors and specialty contractors at the Tenth Annual ABC of the Carolinas Excellence in Construction Award Banquet to be held November 17 at the Grandover Resort in Greensboro. Twenty-four general contractors and specialty contractors will be honored with Excellence in Construction Eagle Awards. Twenty-two contractors will receive Merit Awards for outstanding projects. 

Eight contractors have been selected as Project of the Year finalists. They are Adams Electric Company, KBR Building Group, KBR Building Group/Turner Construction Joint Venture, Rodgers, SPS Corporation, Starr Electric Company, Turner Construction Company and Waldrop Mechanical Services.

The Carolinas Green Award will be presented to Brasfield & Gorie for outstanding sustainable construction and design best practices on the City of Raleigh Transit Operations Facility project.  The Free Enterprise Award will be given to KBR/Turner Joint Venture for the largest number of ABC member subcontractors, suppliers and associate members who worked on the The Boeing Company 787 Expansion/Final Assembly Building project.  Click Here to register for the 2011 ABC of the Carolinas EIC event.

Monday, 7 November 2011

Construction unemployment rises to 13.7 percent in October

Following a strong 27,000 job gain in September, the nation’s construction industry lost 20,000 jobs in October sending the unemployment rate up to 13.7 percent, according to the November jobs report by the Department of Labor. The construction unemployment rate increased from 13.3 percent in September, but is down from 17.3 percent the same time last year said  Associated Builders and Contractors Chief Economist Anirban Basu.

Nonresidential construction employment decreased by 4,500 jobs for the month with employment standing at 667,900 jobs. However, the sector added 10,300 jobs or an increase of 1.6 percent from October 2010 levels.

The heavy and civil engineering sector added 3,700 jobs in October and has added 6,000 jobs or 0.7 percent from the same time last year. In contrast, the specialty trade contractor sector lost 22,100 jobs for the month and has lost 6,400 jobs, or 0.2 percent, year-over-year. Within that sector, nonresidential specialty trade contractor employment dropped by 22,500 jobs from September and lost 20,700 jobs, or 1 percent compared to October 2010.

Residential building construction employment gained 3,300 jobs for the month and has added 3,100 jobs, or 0.6 percent, over the last twelve months.

Across all industries, the nation added 80,000 jobs as the private sector expanded by 104,000 jobs and government lost 24,000 jobs. Year-over-year, the nation has added 1,501,000 jobs or 1.2 percent. The unemployment rate stood at 9 percent in October.

““Due largely to the chilling effects of the soft-patch that emerged in the nation’s economy in March upon the confidence of lenders and developers, many construction projects that were set to break ground have been put on hold,” Basu said. “This has translated into weaker activity in many construction segments including architectural services and specialty trade contractors.

“One of the implications of this has been a sharp reduction in hiring in a segment that has been adding jobs recently, as witnessed in today’s report,” said Basu.

“No private industry lost as many jobs as construction,” said Basu. “Construction activity is likely to remain soft in the months ahead for a variety of reasons, including stretched state and local government capital budgets, the winding down of federal stimulus, and still disciplined lending.” Read More.

NC economic index at lowest level in more tha two years

North Carolina economic indicators for the rest of the year are now at their lowest point in more than two years reports the News & Observer.

The index of leading economic indicators, compiled by N.C. State University economist Michael Walden, shows that three of five measures declined. The economic forecast for the next four to six months dropped by 1.4 percent in September and our now slightly below where it was a year ago.

The Walden Index measures initial claims for unemployment benefits, building permits, average weekly hours of manufacturing work, average weekly earnings in manufacturing, and the Economic Cycle Research Institute's Weekly Leading Index.

Only manufacturing weekly earnings increased in September.

The index is still well above its most recent low point, reached in the spring of 2009. Walden also notes that the state's index fell about half as month as a comparable national index.

"While not necessarily flashing a recessionary warning, the Index does suggest a continued challenging economy with modest improvement -- at best -- in the outlook," Walden wrote in the report. Read More.

Friday, 4 November 2011

Preventing & detecting small business fraud

Guest Editorial by Garland Granger, CPA, CIA, CFE

Almost all fraud surveys and reports have found that the reasons why employees commit fraud in the workplace are most commonly:
  • Personal financial pressures
  • Vices (drugs, alcohol, gambling)
  • Extravagant lifestyles
  • Grievances against the employer
Management can prevent and detect fraud by taking the following actions: 

  1. Outsource to qualified professionals all functions beyond the abilities of company personnel.
  2. Perform periodic internal control evaluation and fraud/theft risk assessment.
  3. Perform timely financial trend analysis to identify potential “red flags.”
  4. Segregate incompatible functions.
  5. Perform periodic spot checks of the high risk ares for your company.’
  6. Establish a code of conduct which is well communicated, understood, monitored and enforced.
  7. Have a control environment that emphasizes integrity and proper internal controls.
  8. Have proper security for assets, computers and technology.
  9. Have adequate and appropriate bonding and insurance
  10. Properly use an accountability program. TDhe “number one” tool for detecting internal fraud is whistle-blowing by co-workers. The “number one” deterrent to internal and external misappropriation is the fear of getting caught. 
Garland Granger is president of Professional Accounting Seminars, Inc., Greensboro. He conducted an accounting seminar at the 10th Annual Carolinas Chapter of the CFMA Carolinas Construction Conference. Granger can be reached at 336-545-9769 or by email at


Thursday, 3 November 2011

DNC contracts issue heats up

Republican mayoral candidate Scott Stone last week continued to press Democratic convention officials and Mayor Anthony Foxx over the number of convention jobs going to unionized labor. Specifically, he questioned so-called project labor agreements that will require contractors to use union labor "to the maximum extent feasible."

Convention officials last week awarded $7 million worth of contracts to temporarily renovate Time Warner Cable Arena and outfit the Charlotte Convention Center as a media workspace. Convention CEO Steve Kerrigan said the contracts would maximize union labor while still providing jobs to local workers. He said there are no quotas on union participation.

"Steve Kerrigan continues to say they're going to maximize union labor," Stone told a handful of reporters outside convention headquarters, according to The Charlotte Observer. "If they're going to do that, how can they also use local labor when we don't have a lot of unions here?"

North Carolina, a right-to-work state, has the lowest percentage of unionized workers in the nation, according to the U.S. Department of Labor. Only 3.2 percent of North Carolina workers belong to unions. Two of the three contracts awarded Tuesday went to partnerships between national and local firms. Charlotte-based Rodgers Builders won the construction management contract with two out-of-state firms. Charlotte's Neighboring Concepts and an out-of-state partner were chosen as event architects.

"We have repeatedly stated that our intention is to maximize business opportunities for local companies," Dan Murrey, executive director of the convention host committee, said in a statement. Earlier this month, representatives of Carolinas AGC visited Foxx to discuss a number of issues, including the possibility of using union labor on construction projects, according to CAGC spokesman Dave Simpson.

"Using project labor agreements and possibly using union construction companies cause concerns," he said, "because North Carolina has a history of being a pro-employee, non-union state."
Read More.

Wednesday, 2 November 2011

Nonresidential construction spending slips 0.1 percent in September

Following a 2 percent surge in August, nonresidential construction spending – which includes both privately and publicly financed construction – slipped 0.1 percent in September to a seasonally adjusted annual rate of $550.9 billion, according to the November report by the U.S. Census Bureau. Year-over-year, total nonresidential construction spending is down 1.3 percent,  reports Associated Builders and Contractors Chief Economist Anirban Basu.

“The construction spending data is consistent with the outlook ABC has been putting forth for quite some time,” said  Basu. “The notion is that nonresidential construction spending is poised for a decline in the months ahead as publicly financed construction wanes and is not fully offset by an increase in privately financed construction

Private nonresidential construction spending was up 0.3 percent for the month and is 7.4 percent higher from one year ago. Public nonresidential construction spending decreased 0.4 percent for the month and is down 8.6 percent from the same time last.

One half of the sixteen nonresidential construction subsectors posted increases for the month, including health care, up 2.2 percent; communication, 2.2 percent higher; sewage and waste disposal, up 1.8 percent; and lodging, up 1.7 percent. Three subsectors experienced increased spending from one year ago with power construction spending up 19.3 percent; commercial construction 9.7 percent higher; and manufacturing construction spending up 4.7 percent.

Eight nonresidential construction subsectors had decreases in spending for the month, including conservation and development, down 7.7 percent; public safety, 4.9 percent lower; water supply, down 2.4 percent; and transportation, down 2.3 percent. With spending down in the majority of nonresidential construction subsectors year-over-year, those posting the largest declines include lodging, down 18.8 percent; religious, 16.7 percent lower; sewage and waste disposal, down 13.1 percent; amusement and recreation, 12.3 percent lower; and water supply construction, down 12.1 percent.

“During the past few months, publicly financed construction surged in part as a reflection of ongoing federal stimulus spending,” Basu said. “However, as federally financed projects end in larger numbers, publicly financed construction is expected to dip.

“This appears to be what occurred in September. Many of the segments experiencing the largest declines in nonresidential construction were those heavily financed and demanded by the public sector,” said Basu. “In contrast, privately financed construction continues to expand, such as commercial and manufacturing construction.

“Industry stakeholders can expect continued growth in health care construction for demographic and policy reasons, as well as in communications construction for reasons related to new technology and customer demand,” Basu said.  Read More.