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Reshaping the Construction Industry

Construction spending skids in June; jobs rise in July; wage gains vary by sector, stateEditor’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.Construction spending in June totaled $950 billion at a seasonally adjusted annual rate, down a steep 1.8% from May but up 5.5% from June 2013, the Census Bureau reported last Friday. Census revised up the totals for May (by $12 billion) and April ($5 billion). Private residential spending dropped 0.3% for the month but rose 7.4% over the latest 12 months; private nonresidential spending, -1.6% and 11%, respectively; and public construction spending, -4.0% and -2.9%. Of the three residential components, new single-family construction slid 1.4% in June but climbed 8.5% year-over-year; new multifamily, increased 2.5% and 33%, respectively; and improvements to existing residential structures, 0.4% and -0.2%.  
Ken Simonson's picture
August 11, 2014
Two performance evaluators at Construction and Maintenance Education Foundation (CMEF) enhanced their skills by adding another certification to their credentials.CMEF Performance Evaluators Richard Bolt and Zachary Burgoon both obtained new certifications illustrating CMEF’s commitment to safe practices and training knowledge in an ever evolving industry.  Bolt and Burgoon keep abreast of the latest technological advances and regulatory activities affecting the industry, and have committed to ongoing education in order to maintain their certification.  Because safety regulations and industry standards are continually changing, the ongoing education requirement is vital to maintaining a legitimate training program.  
Construction Citizen's picture
August 08, 2014
We have reported on the emergence of 3D printing in the construction industry several times.  Mostly the printers are being used to develop modeling for potential structures.  Sourceable, an Australian site, reported recently that a Chinese firm Yingchuang New Materials has begun to use industrial grade 3D printers to produce up to 10 single-room office buildings per day.According to Marc Howe, a contributor to Sourceable:“Yingchuang, which is headquartered in the Jiangsu-province city of Suhou, employed four giant 3D printers to create 10 one-room office buildings in just 24 hours, at a cost of only $5,000 per structure.“The building materials were first printed and allowed to harden at the company’s own premises before being delivered to a Shanghai industrial park and assembled into offices on site.  
Jim Kollaer's picture
August 07, 2014
The following article originally appeared in the August newsletter to clients of Kiley Advisors, LLC for the purpose of providing the latest leading indicators and industry issues to those clients.  Reprinted with permission.The construction market has become so busy, that there are reports of delays and pushbacks.  This is, in part, due to contractors being stretched too thin from the shortage of skilled workers.  And with no signs of slowing anytime soon – in residential, commercial, and industrial construction – the workforce bottleneck is expected to continue, if not worsen going forward.CBRE’s second quarter numbers are in, and they are staggering.  The light industrial market currently has 7.9 million square feet (msf) under construction.  The retail market continues to see rental rates rise with 2.7 msf is under construction.  
Candace Hernandez's picture
August 06, 2014
Amid the chaos in Congress and the humanitarian crisis on the Texas-Mexico border, construction executives from the Lone Star State traveled to the White House this past week to urge President Barack Obama to be smart about any executive action he might take to address longstanding challenges in immigration policy.Their message to top administration officials was that it would be preferable for Congress to pass legislation on the issue.  But in the absence of that – and seeing no evidence that the US House will act – the Republican businessmen from Texas would be okay with an executive order from the Democratic president allowing for millions of undocumented immigrants to stay in the United States as long as they can pass a background check, are identified, and taxed.  As envisioned, this would amount to an expansion of the president’s controversial Deferred Action for Childhood Arrivals, or DACA.  That executive action, as you may be aware, puts deportations on hold for two years for young immigrants living in the U.S. illegally.  Those waivers are renewable.Houston construction executives Stan Marek and Gregg Reyes, along with immigration attorney Beto Cardenas, met late Friday with Obama senior advisers Cecilia Munoz and Valerie Jarrett to talk about what might happen next as the administration grapples with immigration policy.  
Scott Braddock's picture
August 05, 2014
Most metros add construction jobs in June; second-quarter employment costs stay mildEditor’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.From June 2013 to June 2014, construction employment increased in 215 out of 339 metropolitan areas for which the Bureau of Labor Statistics (BLS) reports construction data, declined in 80 and was unchanged in 44, according to an analysis that AGC released last Wednesday. (The agency combines mining and logging with construction in most metros to avoid disclosing data for industries with few firms. Because metro data is not seasonally adjusted, comparisons with months other than June are not meaningful.)  
Ken Simonson's picture
August 04, 2014
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.”  
Construction Citizen's picture
July 31, 2014
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.”  
Jim Kollaer's picture
July 30, 2014
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:  
Scott Braddock's picture
July 29, 2014
MHC, AIA, NABE surveys imply improving construction market; retailers think smallEditor’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].  
Ken Simonson's picture
July 28, 2014