Reshaping the Construction Industry

The following is excerpted from an article by Ulf Wolf which was originally published in Construction Dimensions, a monthly publication by the Association of the Wall and Ceiling Industry.  Reprinted with permission.

You find yourself underbid by 30 percent.

The contractor in question swears on a stack of Bibles that all of his labor is legal and documented and that he, as required by law, pays payroll tax and workers’ comp for all of his crew just like everybody else (all the while his nose grows faster and longer than Pinocchio’s ever did).

Meanwhile, the general contractor has a complicated job to get done and may be unaware of any violations on his job site (or he may look the other way) while the owner – well, the owner doesn’t really want to be bothered with “details.”   Read more » about Immigration Reform and the Shadow Economy

Our friends at Software Advice – a company that researches and reviews construction takeoff software – have completed a survey of 385 construction companies with gross revenues of $100 million or less to see how fast takeoff software is being integrated into the estimating and bidding process of those firms.

The market demand for new projects has increased as the economy continues to rebound from the recession.  With skilled labor demand high and supply not meeting that demand, many firms are turning to software to assist them in the estimating and bidding process, but that pace reflects the conservative nature of the industry.

Not too surprising, many of the companies surveyed are still using manual or spreadsheets for their takeoffs.  According to the survey, “63% of buyers are using manual methods alone, such as Excel spreadsheets.”   Read more » about Construction Industry Software Survey Yields Interesting Results

As we've written numerous times, a primary way to deter cheating in the labor market in construction is for the hammer to be dropped on companies that don't follow the law.  All too often, ethical contractors that properly classify their workers as employees are bidding against companies that can offer customers a lower price because they're paying people as “independent contractors” or, in an interesting twist, as “member/owners.”  This misclassification gives cheaters a competitive advantage that they should be punished for, plain and simple.

That was the case with an Arizona company that was on the hook earlier this year for $600,000.  The National Roofing Contractors Association reported the case on the group's website:   Read more » about Arizona Company Shells Out Over a Half Million For Misclassification

MHC, AIA, NABE surveys imply improving construction market; retailers think small

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

New construction starts in June advanced 6%” at a seasonally adjusted annual rate to the highest level so far in 2014, McGraw Hill Construction (MHC) reported last Tuesday. “Nonresidential building strengthened [+12%] after pulling back in May, with the lift coming from the start of several large manufacturing plant projects. Modest gains in June were also reported for housing [+3%] and nonbuilding construction (public works and electric utilities) [+2%]. During the first six months of 2014, total construction starts on an unadjusted basis were…up 1% from the same period a year ago….During the first two months of 2014 [activity was sluggish], but then the pace of construction starts began to pick up…‘The first half of 2014 revealed a mixed performance by project type,’ stated Robert A. Murray, chief economist for [MHC].   Read more » about AGC's Data DIGest: July 21-25, 2014

The labor shortage in construction is no myth. Here in Texas, amidst the immigration debate, we’ve heard from business leaders who tell us that it now takes about four weeks in Houston to frame up a house and homes built in Dallas take about six months to complete.  Over at Business Insider, reporter Mamta Badkar reminds us that America-born construction workers are simply vanishing:

“The reasons are varied. Many of these unemployed construction workers went to other sectors like manufacturing. Many found themselves moving to the oil and gas states where the energy industry has been booming. At least some have just left the labor force.   Read more » about Competition For Labor Heats Up

At an early age, young children, especially boys, are given all sorts of construction toys. These toys spark creativity and allow our kids the opportunity to use their imagination. They develop concepts such as structural design and receive an early introduction into math, physics, mechanics, and engineering – all of which are turned into fun learning adventures. Cartoon programs with names such Handy Manny and Bob the Builder have become popular and appeal to children’s imaginative personalities. My own son even runs around with a hardhat and tool belt fixing things that don’t really need to be fixed.

If construction is considered to be a great early learning experience, why is it not an acceptable career option for an adult?

Most parents who once supported their child’s curiosity for construction are the first to say it is not a career option. These parents are not knowledgeable about the opportunities that exist for their children or the money that can be made working in the field.   Read more » about When Did It Become Socially Unacceptable to Obtain a Career in Construction?

The following article originally appeared in the July newsletter to clients of Kiley Advisors, LLC.  Reprinted with permission.

This is the period we have been waiting for!  From every indication, and from many different sources, the next several years should see a robust construction market in all major sectors (commercial, industrial, residential and civil) and in all segments (e.g. office, medical, educational, retail, light industrial, etc.).  Companies that think and act strategically will use these coming years and this abundant market to build a stronger foundation so that they will add additional generations to their company’s future.  Those that think only opportunistically, will make money, but struggle again as soon as the cycle turns.   Read more » about The Most Strategic Word For Today’s Times: “No”

Most states add jobs year-over-year but not since May; most PPIs remain mild in June

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

Seasonally adjusted construction employment increased in 38 states and the District of Columbia from June 2013 to June 2014 and decreased in 12 states, an AGC analysis of Bureau of Labor Statistics (BLS) data released Friday showed. The largest percentage gains were in Florida (11%, 41,700 jobs), Nevada (10%, 5,900) and Utah (9.3%, 6,800). Florida added the most jobs, followed by California (29,800, 4.7%) and Texas (19,100, 3.1%). The steepest 12-month percentage losses occurred in New Jersey (-8.1%, -11,200) and Alaska (-5.5%, -900). New Jersey lost the most construction jobs, followed by Arizona (-4,500, -3.6%). For the month, 21 states and D.C. added construction jobs, 27 states lost jobs and Arizona and New Mexico had no change.   Read more » about AGC's Data DIGest: July 14-18, 2014

Even though the humanitarian crisis along the border has complicated the issue and certain political setbacks have caused pundits to proclaim that immigration reform is dead, business leaders at the state and national levels are pushing as hard as ever for comprehensive reform.

Bill Gates, Warren Buffet, and Sheldon Adelson – three men who could not be more different in their politics – contributed an op-ed article to the New York Times last week stating that time for reforming the system is long past due.  The trio argued that it is ridiculous for Washington to grind to a halt simply because one member of congress lost a Republican primary election and the reason for it may have been that lawmaker's support for comprehensive immigration reform:

“The three of us vary in our politics and would differ also in our preferences about the details of an immigration reform bill.  But we could without doubt come together to draft a bill acceptable to each of us.  We hope that fact holds a lesson: You don’t have to agree on everything in order to cooperate on matters about which you are reasonably close to agreement.  It’s time that this brand of thinking finds its way to Washington.   Read more » about Despite Setbacks, Business Leaders Push Immigration Reform

The Texas Uniform Trade Secrets Act (TUTSA) became effective on September 1, 2013.  Texas was the 48th state to adopt a version of the model Uniform Trade Secrets Act.

Texas businesses should welcome the consistency offered by TUTSA, since it brings our law in line with that of most other states (the exceptions are New York and Massachusetts).

The statute defines “trade secret” as: “information, including a formula, pattern, compilation, program, device, method, technique, process, financial data, or list of actual or potential customers or suppliers, that:

(A) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and   Read more » about Trade Secret Protection: New Law, Practical Issues

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