Reshaping the Construction Industry

PPIs for construction inputs fall in February but steel vendors post imminent price hikesEditor’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.The producer price index (PPI) for final demand in February, not seasonally adjusted, was unchanged from January and year-over-year (y/y) from February 2015, the Bureau of Labor Statistics (BLS) reported on Tuesday. AGC posted tables and an explanation focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction. The PPI for final demand construction, not seasonally adjusted, decreased 0.1% for the month and increased 1.0% y/y. The PPI for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of five categories of buildings—rose 1.0% y/y. Changes ranged from -0.1% y/y for healthcare construction to 1.0% for industrial buildings, 1.1% for offices, and 1.4% for warehouses and schools. PPIs for new, repair and maintenance work on nonresidential buildings fell 2.1% y/y for plumbing contractors and rose 1.2% for roofing contractors, 3.5% for concrete contractors and 5.4% for electrical contractors. The index for inputs to construction—excluding capital investment, labor and imports—comprises a mix of 59% goods (including 5% for energy) and 41% services (including trade services, 26%; transportation and warehousing, 4%; and other services, 10%).   

The following article originally appeared in the March newsletter to clients of Kiley Advisors, LLC.  Reprinted with permission.He was 88 years old and had lived an accomplished life, a rich legacy of significant contributions to his family, his company, his industry, his church and to Houston.  Nonetheless, Jerry Nevluds’s thoughtful announcement of his death left so many with a profound sense of sadness and loss.Jack Marshall, the 2nd generation leader of Marshall Construction Company, was a Rice University Graduate and a World War II United States Navy Veteran.  He was also a past member of the Houston AGC Board of Directors, and up until 2015, a member of the chapter’s Labor Committee for over 50 years!    

A construction executive in New York is charged with underreporting his payroll so that he could reap $2 million in insurance premium breaks.Prosecutors in Manhattan said Michael Cholowsky and his company allegedly concealed more than $3 million in payroll resulting in a fraudulent premium reduction over the course of a year starting in April of 2014.The Manhattan District Attorney’s office released a statement saying that the “indictment stems from an investigation into a construction site fatality that occurred last year at the former location of Pastis restaurant in the Meatpacking District. In April 2015, a 22-year-old worker was killed when an improperly secured trench collapsed and fatally crushed the victim.   

ING is accused of fabricating documentation of materials purchases from a minority firm which was part of their bid for a major project, after which federal officials blew the fraud whistle on them.