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We reported last October that the cost of Drywall was due for another spike this year. That one is coming on top of a large spike in 2012 in the middle of one of the largest recessions in our careers. We wondered how the Drywall industry would respond and now we know.According to Top Class Actions.com, “An Arizona-based drywall company has filed a class action antitrust lawsuit against nine major drywall manufacturers accusing them of conspiring to fix and raise the prices for gypsum board, also called drywall or sheetrock. The defendants collectively control 99 percent of the gypsum board sold in the United States and Canada, according to the class action lawsuit.“Sierra Drywall Systems Inc. alleges in the drywall price-fixing class action lawsuit that Georgia-Pacific LLC, American Gypsum Company LLC and seven other defendants forced consumers to pay inflated drywall prices starting in January 2012 with a large, coordinated price hike. The price-hike also included new restrictions on the supply of gypsum board made available to distributors.”
Reshaping the Construction Industry
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Researchers at the University of Texas back up what we've been saying at Construction Citizen for years: far too many construction workers in Texas are the victims of payroll fraud.They released a study this morning in Austin called “Build a Better Texas”.Download the 74-page report: Build a Better Texas.Among the study's findings:Wage theft results in lost tax revenue: at least $117 million in lost wages and $8.8 million in lost sales tax revenue impact cash-strapped state and local governments.Texas construction workers are forced to fall back on public safety nets to support their families. Low wages and wage theft contribute to economic instability for construction workers and their families. Fifty-two percent of Texas construction workers report that they were unable to meet the basic needs of their family at some point.
January 29, 2013
“I don't need training, I don't have time for that! Get me a job and then I can show them what I can do!”I hear this all the time when I recruit small and minority contractors to sign up for leadership/management training. After spurning my invitation, the contractor eventually wins a job, fails to perform, and is either struggling to keep the business afloat, or has quit altogether and moved into a different industry.I've seen this happen many times and had to bail out many a contractor in my career as a consultant to the construction industry. The question we must ask is, “What can we learn from other people's mistakes?”Actually, everyone needs strategic training and planning, and here's why.I recently read an interesting Construction Lending News article entitled, Why Do Contractors Really Go Under? by Dev Strischek and Kevin McLaughlin that provides insight to this issue. Strischek and McLaughlin indicated that a study identified 80 construction firms with revenues over $300 million annually that went out of business or experienced significant financial distress in the past 25 years.
January 24, 2013
The phenomenon of a high unemployment rate coupled with a skilled labor shortage continues to baffle many people. Construction executives know exactly why people looking for jobs in the trades cannot find work – it is the skills gap, which is not just confined to America. Construction Citizen has also told you many times about the shifting attitudes on whether college should be for everyone. More and more experts say “no”.Now, NPR has taken notice of the problem. NPR National Desk Correspondent Yuki Noguchi reported on the issue on the news program All Things Considered. Here is the audio of her report, Homebuilding Is Booming, But Skilled Workers Are Scarce. Noguchi spoke with a couple of construction executives in the Houston area: Jan Maly, the President and CEO of J.M. Maly Inc., and Mike Holland, Division President of Marek Brothers Systems.From Noguchi's report:Maly pins much of the blame on the fact that young workers aren't coming into the field to replace all the boomers who are retiring. He says that's due to a cultural and political bias in favor of sending all kids to college, and that there's a stigma against blue-collar work.
January 23, 2013
We’ve written and talked about the upcoming worker shortages in skilled trades, managers and estimators in the construction industry, but we have not written about the skills that you need to become a construction estimator. That is, until now.Aundraya Ruse, Editorial Coordinator over at Software Advice in Austin sent along a post about construction estimators that outlines those skills and how to get them. The article, written by freelance writer Tom Zind, states:“With the pressure on contractors to win not just more business but work that’s profitable, it falls to estimators to get the numbers right. But that’s a big challenge in an environment of volatile materials costs, stiff competition, increasingly tighter margins and shorter bidding windows.“As such, demand for estimators is only likely to grow. And that translates to opportunities for those with not just the right mix of skills, training and experience, but the up-front knowledge of the forces shaping the market, the educational resources available and potential career pathways.”The article goes on to quote the Bureau of Labor Statistics (BLS) reports about pending shortages and then goes on to outline a road map for becoming a construction estimator.
January 22, 2013
The debate over payroll fraud in Texas is now in the national spotlight.Fox News Correspondent Casey Stegall traveled to Austin to cover the story, where he reported on what the Texas Workforce Commission has endorsed as the forthcoming study from the University of Texas. University of Texas researchers have found that more than 40 percent of construction workers in Texas are misclassified.In his report, Stegall points out that many have called for increased audits by the TWC: “To bring change, a spokeswoman for the Texas Workforce Commission says the agency is enhancing its audit system to find and track down more of these offenders.“The commission’s board also unanimously voted to submit a legislative proposal to get new laws on the books to crack down on the problem. The details of that proposal are still being ironed out but the agency hopes to take advantage of the current legislative session to usher in change.
January 21, 2013
Click this link to view the entire Kiley Fall Briefing content, including video, presentation materials, and more: Kiley Advisors 2012 Fall BriefingPat Kiley, respected construction consultant, former head of AGC Houston and Construction Citizen blogger, recently hosted construction industry executives for an update on what's happening in Houston and around the country. His company, Kiley Advisors, LLC, conducts custom conferences and other services for construction firms and associations. His 2012 Fall Briefing was well attended and featured speakers Dan Bellow, Joe Synan and representatives from Kiley Advisors: Candace Hernandez and Pat Kiley himself. It began with a tribute to Dr. Richard Wainerdi, President and CEO of the Texas Medical Center.For those who were unable to attend, or for those who were there and want to share the experience with others, Construction Citizen is proud to partner with Kiley Advisors to present it in its entirety. The following link will take you to a page with videos of each presentation and other content related to the half-day conference held at the Houston offices of Marek Brothers Systems, Inc.:
January 17, 2013
We're not completely out of the woods, but a survey of Associated General Contractors of America (AGC) members shows they're confident that 2013 will be a better year than 2012.Tricia Lynn Silva reports in the San Antonio Business Journal that builders in Texas expect to see business pick up in some key areas: “hospitals, higher-education, retail, warehouse, lodging and private-office construction”. Contractors think things will stay about the same for work like highway projects and manufacturing.The survey, conducted by the AGC of America and Computer Guidance Corporation, is called “Tentative Signs of a Recovery: The 2013 Construction Hiring and Business Outlook”. The AGC website breaks down the results of the survey by states, including the numbers for Texas.The San Antonio Business Journal article quotes AGC of America CEO Stephen Sandherr as saying
January 16, 2013
While the Texas Legislature prepares to wade into the debate over the best way to deal with payroll fraud, some leaders at the local level say they're not waiting for Austin to take action.Doug Miller, a city councilman in the Fort Worth suburb of Keller says he's going to be in Austin quite a lot during this legislative session a bit to ask that lawmakers “do the right thing.”Miller, who is also a vice president of a construction company in Fort Worth, wrote on his blog “I have expressed my support for a bill that will deal with this situation with my state representatives. I have also looked into having an ordinance in place in Keller that requires contractors that work for the city not have illegitimate contractors, and in the coming year, if this legislation doesn’t pass, I will push something through on the local level.”Miller said his plaster, masonry, and stucco firm, Bobby Lee and Company, has been underbid by cheaters by as much as 35 percent.In an interview with Construction Citizen, Miller said his main concern about the legislature is that “they won't do enough”. He said the Texas Workforce Commission, which has endorsed legislation, needs to go back to the way it used to operate: audit companies for misclassification and penalize them by levying fines. Twenty years ago, Miller's company was fined for misclassifcation. “That stopped that for us. We learned our lesson,” Miller said.
January 14, 2013
