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Editor’s note: AGC Houston held their 2014 Annual Chapter Meeting last week where attendees heard about the chapter’s 2013 successes and accomplishments and also received economic and construction industry updates from featured speakers. Ken Simonson, Chief Economist for the Associated General Contractors of America, offered the following update about the improving economy and what that means for construction companies in 2014.Last week, AGC of America put out our annual survey that over 800 companies participated in, and for the first time in the five years that we've done this survey, there was much more optimism about the current year than there was pessimism. We asked first to say when they thought the market would turn positive, and a plurality, 37%, said 2014. Over two-thirds of the firms said it would be this year or next year, and previously a majority had always said that things weren't going to turn up for at least two years. Now here in Houston, the good times have already been rolling, and the breakout on Texas contractors definitely shows more optimism about the current year and about most business segments than the national survey.
Reshaping the Construction Industry
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In Texas political races all over the state, candidates are being grilled about what they think of sweeping education reforms passed by the legislature last year. While there is pretty much universal agreement that the big reductions in standardized testing were a positive step, there is controversy about changes to graduation requirements that create multiple paths to a high school diploma. The idea, essentially, is that not all kids will go to college so the state will now promote both college readiness as well as career readiness.The business community is not monolithic, so there are some such as the Greater Austin Chamber of Commerce and the Texas Association of Business as well as some minority rights groups which want to roll back those reforms.
January 28, 2014
AGC members, MHC, Reed economists foresee upturn in 2014; union share of jobs risesEditor’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.Contractors are more upbeat about the near-term outlook for construction – especially private construction – than they have been since the recession ended in 2009, according to an annual survey AGC released last Tuesday. More than 800 members from every state and the District of Columbia answered the online questionnaire in December or early January. In contrast to prior years, when most respondents thought the construction market would not begin to grow for two years or more, a plurality of this year’s respondents – 37% – picked 2014 as the year the market would grow.
January 27, 2014
Hi there. The Chamberlin Man here.In the current issue of the Chamberlin newsletter is a poignant piece from consultant David Leslie of Building Exterior Solutions that suggests far too many buildings leak and begs the question, “how do we change the industry?” As in, he has ideas about how we can more often prevent leaks in the first place rather than fix them once happened. Provocative thinking!This is an article you don't want to miss. It's chock-full of research and poses a new way to look at the building envelope – proactively rather than reactively. Chew on just the thought of it for a minute.Don't get our newsletter by some off chance? Let us know and we'll drop one in the mail to ya. Isn't it nice to get REAL mail every now and again?You can click on the chart below to enlarge the image.
January 24, 2014
Reuters has reported that the new AGC survey released yesterday pointed to the increasing shortages in the skilled workforce that we have been reporting for the last four years.The Reuters article describes not only the recruitment issues for new skilled workers, but the increasing difficulty of retaining those who have the skills needed to keep up with the demand as the economy continues its recovery. The article quotes AGC Chief Executive Officer Stephen Sander who said that “competition for the available construction workers was heating up. The survey found that 52 percent of firms reported losing workers to other construction companies. As a result, companies are raising wages and improving benefits to retain workers.”The AGC survey shows that those skilled workers who left during the recession have found new positions, and the expansion of the domestic oil and gas industry has created new markets for those workers.
January 22, 2014
Prices remain tame; federal funding rises a bit; Beige Book shows optimismEditor’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.Click to view the December Producer Price Indexes (PPI) table.The producer price index (PPI) for finished goods inched up 0.1%, not seasonally adjusted (0.4%, seasonally adjusted), in December and 1.2% over 12 months, the Bureau of Labor Statistics reported on Wednesday. The PPI for inputs to construction – an average of the cost of all materials used in construction plus items consumed by contractors, such as diesel fuel – also rose 0.1% for the month and climbed 1.3% year-over-year. That was the smallest yearly increase since 2009, slightly less than the 1.4% rise in 2012.
January 20, 2014
New regulations affecting federal contractors are scheduled to go into effect on March 24, 2014. The regulations involve federal contractors’ affirmative action and recordkeeping obligations for veterans and disabled workers.The agency issuing the regulations is the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). OFCCP regulates federal contractors.Application to Construction ContractorsIn general, contractors and subcontractors who hold a Federal or federally-assisted construction contract in excess of $10,000 are subject to regulatory requirements under one or more of the laws enforced by OFCCP.
January 17, 2014
The Florida Department of Financial Services Divisions of Workers’ Compensation and Insurance Fraud have released a joint report summarizing their efforts and activities in combating workers’ compensation fraud for the period of July 1, 2012 through June 30, 2013.Highlights of the report include:Workers’ compensation premium fraud continues to be a high priority. Cases involve construction industry contractors using shell companies and check cashing stores to launder money for cash pay to workers in order to avoid paying proper premiums. The report’s authors write: “This scheme allows these uninsured contractors an unfair advantage when competing with legitimate companies who abide by state statute and obtain and maintain workers’ compensation coverage on all their employees.”
January 16, 2014
Construction companies across Texas that work on public projects are on notice now that the targeted worker misclassification crackdown passed by the legislature in 2013 has taken effect.HB 2015 “Worker Classification” was signed into law on June 14, 2013, and became effective on January 1, 2014. This law is considered by many to be a good first step in the fight against the problem that is especially rampant in residential and commercial construction. But, advocates for workers and for a fair marketplace understand that much more needs to be done in the years to come if the playing field is going to be leveled so that ethical companies will be able to compete. While putting these penalties in place on public projects will help in the commercial sector, nothing at all will change in residential construction.
January 14, 2014
