Reshaping the Construction Industry

This is the first in a series of posts that will focus (sometimes with a bit or bite of humor) on the games that some GCs and subs play on your jobsite while they are working on your projects.

We are interested in exposing some of the dangerous, costly, and frankly, stupid practices in an attempt to make you aware and to encourage the industry to improve its practices in the future.

Let me start by relating a simple story that I saw happen on one of my first multifamily projects. Let me call it “now you see it, now you don’t.”

As a rookie architect, I was sent to a site in Dallas where a client was building a garden apartment project for our biggest private client. Not only was this particular developer the firm’s largest client, he was also the “most profit-minded client” (read cheapest).   Read more » about Games Contractors and Subs Play

Last month, I visited Lone Star College North Harris (LSC-North Harris) and spoke with Erica Jordan, Executive Director of Career and Technical Education about the skilled trades training programs at LSC and about the Construction and Skilled Trades Technology Center which is currently being constructed on that campus.

In her office on the Lone Star College-Tomball campus, Jordan advises students and works with representatives from the industry to advise them of potential hires which are coming out of the LSC programs and what particular skill sets each of them have.

Jordan works with a variety of programs offered by Lone Star College, including their Allied Health programs, Construction Trade programs, ATCP (Alternative Teacher Certification Program), and FastTrack non-credit programs.   Read more » about Director of CTE Discusses Workforce Training Offered at Lone Star College [VIDEO]

PPIs edge mostly higher; starts reports are mixed; union pay agreements trend up

Editor’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 PPI for final demand in September, not seasonally adjusted, increased 0.2% from August and 0.7% year-over-year (y/y) from September 2015, the Bureau of Labor Statistics (BLS) reported on Friday. 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, edged up 0.1% for the month and 0.8% 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 0.7% y/y. Changes ranged from 0.1% y/y for industrial building construction to 0.4% for schools, 0.5% for healthcare buildings, 1.1% for warehouses and 1.2% for office buildings.    Read more » about AGC's Data DIGest: October 8-19, 2016

The following article originally appeared in the October newsletter to clients of Kiley Advisors, LLC.  Reprinted with permission.

Recently, Larry Brookshire, the former owner and leader of Fisk, the large electrical contractor, offered some deeply insightful comments, to a group of both general and specialty contractors. Many in the Houston Commercial Construction Community know Larry. He is respected as one the most successful leaders, by all standards used to judge business executives. And, he is very deserving; his is an “up from bootstraps” story. Raised by a single mom, he put himself through the University of Texas to get an Electrical Engineering Degree and then later though law school. Clients, employees, and peers all admire and celebrate his success.   Read more » about Reflections of a Successful Leader

Under a deal with prosecutors, a construction firm based in Manhattan will pay out $9 million to avoid prosecution for over-billing clients over the years. The company will also be forced to establish a hotline that employees can call to report ethics violations.

We get the news via the New York Daily News:

Plaza Construction billed more than $2.2 million for hours not worked by laborers on projects that included the Brooklyn Navy Yard, Bronx Terminal Market, Federal Reserve Bank, and New York University, authorities said Thursday.

Under the deferred prosecution agreement with the Brooklyn U.S. Attorney's office, Plaza will repay its clients which were defrauding in the scheme going back to 1999.

“The company defrauded its clients and abused the trust placed in it to provide construction services at some of New York's most storied sites,” said U.S. Attorney Robert Capers.   Read more » about New York Construction Firm Agrees to Big Settlement to Avoid Fraud Prosecution

We have posted articles on the “twisted towers” that demonstrate the outstanding engineering and construction capabilities of today. Now the Council on Tall Buildings and Urban Habitat or CBTUH has compiled a database of some really twisted tall buildings with detailed statistics for each of them that include the normal height, floors and the degree of twist for all of the “twisted buildings” around the globe.

We found it most interesting that over the next 5 years a total of 179 “twisted” buildings will be completed. The data shows that most of those buildings will take between 4 and 6.5 years to build. If you assume that it took 2-3 years to design, then a number of them were planned in the economic slowdown and are just now becoming a reality.

The “most twisted tower” underway today is the Diamond Tower in Jeddah, Saudi Arabia. It is a 432-meter tall, 93-floor residential tower that is planned for completion in 2019. It is planned to contain 300 residential units. This tower twists a total of 360 degrees from the ground to the top floor, a record to date.

Of the list of 30 twisted towers on the current list, only two of them are being built in the US. Both are 24 floor residential towers located in Miami at the Grove at Grand Bay. According to the sales site, the units range in size from 1,194 sf to 5692 sf and are priced at $3 – 5 million or and average of $1,152 per square foot. -Take a look at the list and the views.    Read more » about Twisted Towers Two: Diamond Tower

Yesterday the Greater Houston Partnership hosted a reception in their newly-built convening space located in the heart of downtown to allow media including myself an opportunity to view their gorgeous venue designed to show visiting CEO’s and government dignitaries exactly how wonderful and diverse the Houston region is for both business and living.

Partnership Tower is a ten-story building consisting of parking below and office space above, and featuring a 13,000 square foot configurable space which opens up to a 2,030 square foot terrace overlooking the George R. Brown Convention Center, Discovery Green, and the Marriott Marquies hotel.  Views from the floor-to-ceiling walls inside offer impressive views of the downtown skyline as well as Minute Maid Park, home to the Houston Astros, next door.  Also nearby is BBVA Compass Stadium and easy access to the light rail system.  While it is difficult to look away from the stunning view of the city outside, the interior wall of the hall featured a photo wall consisting of local scenes representing industry and leisure and showing the many faces of the region, all taken by Houston-based photographers.   Read more » about Partnership Tower Offers Stunning New View of Houston

The following article originally appeared in the October 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.

Did Houston already go into a recession? Jesse Thompson, Business Economist at the Federal Reserve Bank of Dallas - Houston Branch, noted the Houston Business Cycle Index shows that Houston entered a recession late 2015/early 2016. He provided a chart (right) showing the correlation between rig count and Houston’s core oil and gas related employment noting “further revisions will like confirm what we’ve already observed: that Houston’s economy is contracting, and that Houston may or may not be out of it yet.”

However, fueling the recovery discussion is the renewed optimism in the Purchasing Managers Index’s oil and gas respondents, who for the first time in several months, seemed happier and more upbeat. The PMI itself increased to 46.1 in August – still in an overall contraction phase, but production, sales and new orders were all noticeably up, a leading indicator.   Read more » about Houston’s Monthly Metrics: October 2016

SEIU march in HoustonA fairly new group proposing tighter constraints on organized labor in Texas is starting a fresh push to pass legislation that would make life even tougher for unions in this right to work state.

Some business leaders are frustrated after a bill aimed at further reining in unions was unsuccessful at the Texas Capitol in 2015. The bill, which would have prohibited the automatic deduction of union dues from government paychecks, died in the closing days of the last legislative session. At that time, the Texas Senate passed it in “flawed form,” according to House leadership, while there were multiple other priority pieces of legislation facing critical deadlines.

The Texas Business Coalition, chaired by Houston janitorial executive Brent Southwell, was formed with passing this legislation in mind. The group includes the National Federation of Independent Business, Texas Retailers, the Building Owners and Managers Association, the Associated Builders and Contractors of Texas, and others.    Read more » about Anti-Union Push Begins Anew at the Texas Capitol

September employment hits highest level since 2008; August spending slides

Editor’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.

Nonfarm payroll employment in September increased by 156,000, seasonally adjusted, from August and by 2,447,000 (1.7%) year-over-year (y/y), the Bureau of Labor Statistics (BLS) reported today. The unemployment rate (5.0%) inched up from 4.9% in August, as the number of jobseekers increased more than hiring. Construction employment (6,669,000) increased by 23,000 from the upwardly revised August total to the highest level since December 2008. Over the past 12 months, industry employment rose by 218,000 or 3.4%, twice as fast as total nonfarm employment. Residential construction employment (residential building and specialty trade contractors) rose by 15,700 for the month and 146,000 (5.9%) y/y.    Read more » about AGC's Data DIGest: October 3-7, 2016


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