Contractors add 19,000 jobs in March, jobless rate lowest in seven years

Associated General Contractors of AmericaConstruction employers added 19,000 workers to payrolls in March, bringing industry employment to the highest level since June 2009, while the industry’s unemployment rate dropped to the lowest March level in seven years, according to an analysis of new government data by the Associated General Contractors of America. Association officials warned that the pool of available workers is declining rapidly, raising the prospects for significant labor shortages if demand continues to expand.

Construction employment totaled 5,964,000 in March, a gain of 151,000 or 2.6 percent from a year earlier, compared with a rise in total nonfarm employment of 1.7 percent over that period, Simonson noted. Residential building and specialty trade contractors added a combined total of 9,100 workers in March and 103,000 (4.8 percent) over 12 months. Nonresidential construction—building, specialty trades and heavy and civil engineering contractors—grew by 9,900 employees last month and 48,800 (1.3 percent) since March 2013.

The unemployment rate for workers actively looking for jobs and last employed in construction declined from 14.7 percent a year earlier to 11.3 percent last month. Ken Simonson, the association’s chief economist, noted that the unemployment rate for construction workers had fallen by more than half since March 2010, when it reached 24.9 percent. During that time, the number of unemployed workers who last worked in construction declined by 1.3 million, but industry employment increased by only 445,000.

Association officials said that one reason the industry is likely to face labor shortages is because of the declining number of secondary-level construction training programs. They urged federal, state and local officials to take steps designed to make it easier for schools, construction firms and local trade associations to establish new training programs for future construction workers.

Sealy to Receive Ronald H. Brown Standards Leadership Award

nibsNational Institute of Building Sciences (NIBS) Past Chairman Jimmy W. Sealy, FAIA, has been selected by the U.S. Celebration of World Standards Day Planning Committee to be the 2014 recipient of the prestigious Ronald H. Brown Standards Leadership Award. Sealy will be honored by members of the U.S. standards and conformance community during the U.S. Celebration of World Standards Day, to be held Thursday, October 23, 2014, at the Fairmont Washington in Washington, D.C.

Named for the late U.S. Secretary of Commerce, the Brown award recognizes demonstrated leadership in promoting the important role of standardization in eliminating global barriers to trade. The award is presented at the U.S. Celebration of World Standards Day, an annual event which honors the U.S. standards and conformity assessment community and recognizes its efforts to promote American competitiveness in a global marketplace, safeguard the environment and improve the quality of life for workers and consumers around the world.

As the Administrating Organization of this year’s celebration, NIBS nominated Sealy for his important, long-standing contributions to the development of the nation’s building codes and related standards, among other work. He has been active in the codes and standards community since 1972 and worked with all of the model code organizations. He has served on the Underwriters Laboratories (UL) Fire Council, the American Institute of Architects (AIA) Codes and Standards Advisory Committee, and the AIA committee for accessibility, among many other groups, and is currently the chair of the NIBS Building Seismic Safety Council Board of Direction. Mr. Sealy is a recipient of multiple industry awards, including the Southern Building Code Congress International (SBCCI) Alton T. Riddick Award; the NIBS Member Award and the Mortimer M. Marshall Lifetime Achievement Award; as well as the International Code Council (ICC) Bobby J. Fowler Award, which is the building code administration profession’s highest honor.

Celebrated annually, World Standards Day pays tribute to the thousands of volunteers around the world who participate in standardization activities, and helps to raise awareness of the role that standards play in addressing national and global priorities. The event has been held since 1970 and is recognized in nations around the globe. U.S. activities are organized annually by a planning committee consisting of representatives from across the standards and conformity assessment community. The American National Standards Institute (ANSI) and the U.S. Department of Commerce (DoC)’s National Institute of Standards and Technology (NIST) co-chair the event each year.

More information about the U.S. Celebration of World Standards Day 2014 is available atwww.wsd-us.org.

Innovative method for implementing green construction code proposed

nibsRepresentatives from across the building industry, including code officials, building owners, manufacturers, designers and energy efficiency advocates, have come together under the leadership of the National Institute of Building Sciences to develop a new approach to meeting energy efficiency requirements. This “Outcome-based Pathway,” which the group submitted as a proposed code change to the International Green Construction Code (IgCC), appears in the monograph of IgCC proposed changes that the International Code Council released this past Friday, March 15, for public review.

The Institute’s Consultative Council highlighted the “Outcome-Based Pathway” in its 2010 Moving Forward Report submitted to the President of the United States. The approach focuses specifically on the actual energy used in the building. The report notes:

The building community needs a better baseline of actual building performance against which to measure progress. More importantly, the application and use of prescriptive criteria must be eliminated in favor of stated performance goals or expected outcomes (although, after setting those goals or outcomes, prescriptive guidance to achieve them can be developed).1

The industry group specifically focused on an outcome-based approach to address a number of challenges facing the building industry:

  • Code departments have limited resources available to enforce building codes (particularly energy codes, which are not usually seen as a life safety issue).
  • Energy use is highly measurable, yet current code pathways anticipate results from designs; they do not assess actual building performance.
  • Designers do not have the flexibility to use some of the latest technologies or practices to achieve energy efficiency requirements.
  • Not all energy-saving strategies, such as building orientation, are effectively captured in codes.
  • Energy efficiency goals increasingly rely on reductions in energy use at the systems level, but the IECC has primarily focused on a component approach.
  • A growing percentage of energy uses associated with buildings are not currently covered within the existing code framework (i.e., plug loads).

The proposed code change will be heard by the IgCC Energy/Water Committee during the International Code Council’s Committee Action Hearings, to be held this April 27 through May 4, in Memphis, Tennessee.

In addition to the Institute, a number of organizations, including the New Buildings Institute, The Institute for Market Transformation and the Colorado Chapter of the International Code Council, support the proposal.

View the proposal, a section-by-section summary and reasoning statement. For questions, or to provide additional organizational support for the proposal, contact Ryan Colker.

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1. Moving Forward: Findings and Recommendations from the Consultative Council. National Institute of Building Sciences 2010 Annual Report to the President of the Unite States, 2010. 43-49.

MCA publishes two new EPDs

mca-epdTwo Environmental Product Declarations (EPDs), one for Metal Composite Material Panels and one for  Roll Formed Steel Panels for Roofs and Walls, are now available free of charge from the Metal Construction Association (MCA) on its website. These documents are the second and third EPDs to be released by MCA, an organization of manufacturers and suppliers whose metal wall and roofing components are used in buildings throughout the world. In October 2013, MCA developed an EPD for Insulated Metal Panels.

Environmental Product Declarations provide LCA-based information and details about the environmental impacts of products and assist purchasers and users in making informed comparisons. As more members of the design community use EPDs, which are now included in the new LEED V4 green building rating system, MCA is responding by issuing industry-wide EPDs that report the environmental impact of members’ products and related assemblies.

MCA’s EPDs contain valuable information about product definition, building physics, the basic material and its origin, product manufacture and processing, in-use conditions, life cycle assessment results, and testing results and verifications. Environmental impacts were assessed throughout the lifecycle of metal composite material panels and roll formed panels, including raw material extraction, transportation, manufacturing packaging, use, and disposal at the end of a building’s useful life. The product configurations in the EPDs use ranges representative of all types of panels based on specific products from the primary producers that were used in the assessment and testing.

To obtain a copy of any of the MCA EPDs visit www.metalconstruction.org or contact MCA at 847-375-4718 or mca@metalconstruction.org

AGC to build equestrian center for Horses 4 Heroes

agc-charitiesConstruction charity organization AGC Charities, Inc. announced today that it will build a new equestrian center for a local charity group that provides equestrian programs and activities for veterans, their families and local first responders. As part of its annual Operation Opening Doors effort, contractors will donate their time, expertise and money to create a new facility for Horses 4 Heroes.

Since its establishment in 2006, Horses 4 Heroes has been operating out of the back yard of the woman who founded the group, Sydney Knott. But thanks to AGC Charities, Inc. and the help of many member firms, the group has received permission from Las Vegas to build a new facility at the historic Tulley Springs Ranch on the northern end of town.

Las Vegas-based Martin-Harris Construction has volunteered to serve as the lead contractor for the charitable effort. The AGC of Las Vegas has also committed to recruiting many of its members to participate in the effort. The new facility will have an area for farm animals, riding arena and Mare Motel, as well as new fencing. In addition, the team will renovate one of the Ranch’s old cottages into a residence for the horse caretaker and perform significant site-prep work. The facility is scheduled to open on Thursday, March 6.

Clemens said the AGC Charities group is currently fundraising to support the soon-to-be renovated facility. He noted that the charitable group was established six years ago to channel and support the charitable efforts of the construction community. He added that the group held previous national Operation Opening Doors projects in Washington, D.C., Honolulu, Orlando and Palm Springs.

Click here for more information about Horses 4 Heroes, AGC Charities, Inc. and its Operation Opening Doors projects.

Construction firms expect demand to grow in 2014

Associated General Contractors of AmericaMany firms plan to start hiring again and most contractors predict demand will either grow or remain stable in virtually every market segment this year according to a survey by the Associated General Contractors of America. The survey, conducted as part of Optimism Returns: The 2014 Construction Industry Hiring and Business Outlook, provides a generally upbeat outlook for the year even as firms worry about growing worker shortages, rising costs and the impact of new regulations and federal budget cutting.

Stephen E. Sandherr, the association’s chief executive officer noted that many firms plan to begin hiring again, while relatively few plan to start making layoffs. Forty-one percent of firms that did not change staff levels last year report they plan to start expanding payrolls in 2014, while only two percent plan to start making layoffs. However, net hiring is likely to be relatively modest, with 86 percent of firms reporting they plan to hire 25 or fewer new employees this year.

Among the 19 states with large enough survey sample sizes, 100 percent of firms that did not change staffing levels last year in Utah plan to start hiring new staff this year, more than in any other state. (Click here for state-by-state survey results.)

Contractors have a relatively positive outlook for virtually all 11 market segments covered in the Outlook, in particular for private-sector segments. For five of those segments, at least 40 percent of respondents expect the market to expand and fewer than 20 percent expect the market to decline in 2014. The difference between the optimists and pessimists – the net positive reading – is a strong 28 percent for private office, manufacturing and the combined retail/warehouse/lodging segments, and 25 percent for power and hospital/higher education construction.

Among public sector segments, contractors are more optimistic about demand for new water and sewer construction, with a net positive of 17 percent. Contractors are mildly optimistic about the market for highway construction, with a net positive of 10 percent. Respondents are almost equally divided regarding the outlook for the other four segments, ranging from net positives of 5 percent for public buildings, 4 percent for schools, 3 percent for transportation facilities other than highways, to a negative of 2 percent for marine construction.

Sandherr added that contractors’ market expectations are significantly more optimistic than they were at this time last year. At that time, more contractors expected demand for highway, other transportation, public building, retail, warehouse and lodging, K-12 schools and private officers to shrink than expected it to grow.

Many contractors also report they plan to add new construction equipment in 2014. Seventy-three percent of firms plans to purchase construction equipment and 86 percent report they plan to lease it this year. The scope of those investments is likely to be somewhat limited, however. Forty-four percent of firms say they will invest $250,000 or less in equipment purchases and 53 percent say they will invest that amount or less for new equipment leases.

One reason firms may be more optimistic, association officials noted, is that credit conditions appear to have improved. Only 9 percent of firms report having a harder time getting bank loans, down from 13 percent in last year’s survey. And only 32 percent report customers’ projects were delayed or canceled because of tight credit conditions, compared with 40 percent a year ago.

Ninety percent of construction firms report they expect prices for key construction materials to increase in 2014. Most, however, expect those increases will be relatively modest, with 43 percent reporting they expect the increases to range between 1 and 5 percent. Meanwhile, 82 percent of firms report they expect the cost of providing health care insurance for their employees will increase in 2014. Despite that, only 1 percent of firms report they plan to reduce the amount of health care coverage they provide.

Simonson noted that as firms continue to slowly expand their payrolls, they were likely to have a harder time finding enough skilled construction workers. Already, 62 percent of responding firms report having a difficult time filling key professional and craft worker positions. And two-thirds of firms expect it will either become harder or remain as difficult to fill professional positions and 74 percent say it will get harder, or remain as hard, to fill craft worker positions.

Those worker shortages are already having an impact, the economist added. Fifty-two percent of firms report they are losing construction professionals to other firms or industries and 55 percent report they are losing craft workers. As a result, a majority of firms report they have improved pay and benefits to help retain qualified staff. One reason they are likely worried is that nearly half of the firms believe training programs for new craft workers are poor or below average.

Adding to their challenges, 51 percent of contractors report that demand for their services is being negatively impacted by federal funding cuts, new federal regulations and/or Washington’s inability to set an annual budget. “It would appear that Washington is not here to help as far as contractors are concerned,” Simonson noted.

Association officials added that survey respondents would prefer that Washington officials work on other priorities. Seventy-seven percent of firms reported listed having Washington find ways to make it easier to prepare the next generation of skilled workers as a top priority. Sixty-three percent listed repealing all or part of the Affordable Care Act as a top priority. And 63 listed renewing tax deductions and bonus depreciation for construction equipment as a top priority.

The Outlook was based on survey results from over 800 construction firms from every state and the District of Columbia. Varying numbers responded to each question. Contractors of every size answered over 40 questions about their hiring, equipment purchasing and business plans. Click here for Optimism Returns: The 2014 Construction Hiring and Business Outlook report. Click here for the survey results.

SBIC Recognizes High-Performance Building Leaders

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The National Institute of Building Sciences’ Sustainable Buildings Industry Council (SBIC) recognized the 2013 Beyond Green™ High-Performance Building Awards winners at Building Innovation 2014: The National Institute of Building Sciences Annual Conference and Expo.

The SBIC Jury selected six winners ranging across four categories. Each of the six award-winning projects, products, initiatives and innovations demonstrate leadership in advancing the production of high-performance buildings.

The top prize in the High-Performance Buildings Category went to DPR Construction’s Phoenix Regional Office. During this project, the team transformed an abandoned, distressed building in a redeveloping community of Phoenix into a modern sustainable facility that achieves net-zero energy use. Their efforts earned the building an Honor Award, First Place.

In the High-Performance Products Category, SageGlass earned an Honor Award, First Place. The electrochromic or electronically tint-able, dynamic glass provides architects, building owners, glazing contractors and homeowners with an energy-efficient glazing solution that controls the sun without blocking the view to the outdoors.

RDH Building Engineering’s Enclosure Renewal approach, which lowers a building’s energy consumption at low incremental capital cost, earned it recognition as an Honor Award, First Place recipient in the Innovations for High-Performance Buildings Category.

The SBIC Jury also recognized three Merit Award winners. In the High-Performance Buildings Category, a Merit Award went to Chemeketa Community College, Salem, Oregon for its new Health Sciences Complex.

Construction employment declines by 16,000, but unemployment rate also declines

Associated General Contractors of AmericaConstruction employment declined by 16,000 in December but the industry unemployment rate fell to 11.4 percent, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that the new employment data was likely impacted by cold weather, but also reflects underlying weakness in the construction sector.

Construction employment totaled 5,833,000 in December, an increase of 122,000 from a year earlier, noted Ken Simonson, the association’s chief economist. But while employment grew by 2.1 percent during the past year, construction employment remains nearly 1.9 million below the sector’s April 2006 peak. Meanwhile, the unemployment rate for workers actively looking for jobs and last employed in construction declined from 13.5 percent in December 2012 to 11.4 percent last month.

Nonresidential construction firms lost 22,900 new jobs in December while residential firms added 6,200 jobs. Nonresidential specialty trade contractors lost 12,900 jobs for the month, the most of any segment, while heavy and civil engineering firms – which are most likely to perform federal construction work – lost 8,800 jobs, the second most. Meanwhile residential building contractors added the most new jobs during the past month, 4,800 jobs.

The number of unemployed construction workers dropped from 1,105,000 in December 2012 to 958,000 in December 2013, a decline of 147,000. Yet the industry added only 122,000 new jobs during the same timeframe. The shrinking pool of available construction workers may be one reason so many firms reporthaving a hard time finding qualified workers, Simonson noted.

Association officials said the outlook for construction could be helped by new investments in infrastructure and other construction programs. They urged Congress to finalize Water Resources Development Act legislation to invest in ports and other waterways. They also said Congress and the administration should work together to find a way to pay for needed repairs to aging roads and bridges before the current transportation legislation expires at the end of September.

Construction spending increase by 5.9% between November 2013 and 2013

Associated General Contractors of AmericaTotal construction spending increased between October and November and for the year amid growing private-sector demand, according to an analysis of new Census Bureau data by the Associated General Contractors of America. Association officials noted, however, that the spending levels were held back by declining public sector investments for both the month and the year.

Construction put in place totaled $934 billion in November, rising 1.0 percent since October and up 5.9 percent since November 2012. Private residential construction spending increased by 1.9 percent in November and jumped 17 percent from a year earlier. Private nonresidential spending climbed 2.7 percent for the month and 1.0 percent year-over-year. Public construction spending dropped 1.8 percent for the month and 0.2 percent over 12 months.

Over the past 12 months, the biggest jump in construction spending has occurred in new multifamily construction, which rose 0.9 percent for the month and 36 percent year-over-year. The lodging sector recorded the second highest annual gain, with spending rising 32.7 percent for the year and 0.3 percent for the month. Spending on communications facilities experienced the largest monthly increase, jumping 11.2 percent in November, although it is still down 10.5 percent for the year.

The largest private nonresidential category, power construction—which includes oil and gas field and pipeline projects as well as power plants, renewable power and transmission lines—increased by 3.3 percent in November but is actually down 24.2 percent for the year. The analysis noted, however, that there was a surge in power construction during the last quarter of 2012 as contractors rushed to finish wind projects before the expected expiration of the wind production tax credit at the end of 2012. Those credits were extended for projects that broke ground by the end of 2013, explaining the more recent surge. “Both the electricity and oil and gas components of power construction should do well in 2014,” he added.

Highway and street construction, the largest public category, declined by 0.4 percent in November but is up 4.6 percent compared to a year ago. The next largest public niche, educational construction, increased by 1.1 percent for the month but was unchanged for the year, he added.
Association officials noted that the spending figures would have been even better had it not been for the public sector declines. They urged Congress and the administration to work together in 2014 to pass vital transportation and other infrastructure legislation.

Slight Contraction for Architecture Billings Index Contracts Slightly

AIAAfter six months of steadily increasing demand for design services, the Architecture Billings Index (ABI) paused in November.  As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending.  The American Institute of Architects (AIA) reported the November ABI score was 49.8, down from a mark of 51.6 in October.  This score reflects a slight decrease in design services (any score above 50 indicates an increase in billings).  The new projects inquiry index was 57.8, down from the reading of 61.5 the previous month.

Key November ABI highlights:

  • Regional averages: South (52.0), Midwest (51.6), West (50.2), Northeast (47.5)
  • Sector index breakdown: multi-family residential (55.2), mixed practice (53.1), commercial / industrial (48.6), institutional (47.7)
  • Project inquiries index: 57.8

The regional and sector categories are calculated as a 3-month moving average, whereas the index and inquiries are monthly numbers.