Reshaping the Construction Industry

Recently we made two points about the cost of gypsum products, especially wallboard.  First, last year during the economic downturn, many gypsum suppliers reduced overall capacity by closing production plants.  Second, we illustrated the gypsum price increases for the last three years.Robert Denk, Assistant Vice President for Forecasting and Analysis at the National Association of Home Builders (NAHB) posted in the Eye on Housing a comparison between the price of lumber and gypsum in light of the recovery in the residential markets.According to the Bureau of Labor Statistics (BLS), Denk says that, “Building materials prices have been responding to the progress of the housing recovery.  Early improvements in the housing market put upward pressure on materials prices, particularly wood products and gypsum.  

To some in construction, avoiding payroll taxes by paying workers as independent subcontractors is just the way to do business.  But, as we've repeatedly noted, it is illegal to do that when the person you're paying meets the government's definition of an employee.  The intentional misclassification of workers is also one of the largely unseen causes for the degradation of the American middle class because it undermines the employer-employee relationship in a way that leads companies to simply throw people away when they are through with them.  This problem didn't reach crisis levels overnight, and it won't be solved quickly, either.  But the tide is starting to turn.The federal government has largely been on the sidelines when it comes to enforcement, so what we've seen is more and more states making moves to crack down on the practice.  Texas is gearing up to root out worker misclassification on taxpayer subsidized projects, and other states are pursuing bolder policies.  A recent report by Bloomberg News declares that “States from New York to California are taking steps to crack down on employers who improperly classify their workers or fail to declare their income.”  From the Bloomberg report:  

Researchers at the Massachusetts Institute of Technology (MIT) recently discovered that some metals appear to “heal” themselves under certain conditions.  Graduate student Guoqiang Xu and Michael Demkowicz, a professor of science and engineering at the university, found that when a separating pressure was applied to a cracked piece of a nickel superalloy with which they were working, instead of the crack widening it appeared to fuse together.  The metal appeared to heal itself.An article in MIT News explained what the research team discovered:“Most metals are made of tiny crystalline grains whose sizes and orientations can affect strength and other characteristics.  But under certain conditions, Demkowicz and Xu found, stress ‘causes the microstructure to change: It can make grain boundaries migrate.  This grain boundary migration is the key to healing the crack,’ Demkowicz says.  

We have written about autonomous or driverless vehicles as an early signpost for technology changes in the industry.  Komatsu and Rio Tinto are two names on the forefront of autonomous vehicles in the construction and mining industry.  Komatsu, a Japanese company known around the world for its heavy-duty construction machinery, has made a commitment to developing autonomous heavy vehicles that can be used to improve production and payback on some of the largest sites and mines in the world.  That program is named “FrontRunner”, and it has been deployed to two sites, one in a copper mine in Chile and the second in Australia.