Reshaping the Construction Industry

The labor shortage in construction is no myth. Here in Texas, amidst the immigration debate, we’ve heard from business leaders who tell us that it now takes about four weeks in Houston to frame up a house and homes built in Dallas take about six months to complete.  Over at Business Insider, reporter Mamta Badkar reminds us that America-born construction workers are simply vanishing:

“The reasons are varied. Many of these unemployed construction workers went to other sectors like manufacturing. Many found themselves moving to the oil and gas states where the energy industry has been booming. At least some have just left the labor force.   Read more » about Competition For Labor Heats Up

At an early age, young children, especially boys, are given all sorts of construction toys. These toys spark creativity and allow our kids the opportunity to use their imagination. They develop concepts such as structural design and receive an early introduction into math, physics, mechanics, and engineering – all of which are turned into fun learning adventures. Cartoon programs with names such Handy Manny and Bob the Builder have become popular and appeal to children’s imaginative personalities. My own son even runs around with a hardhat and tool belt fixing things that don’t really need to be fixed.

If construction is considered to be a great early learning experience, why is it not an acceptable career option for an adult?

Most parents who once supported their child’s curiosity for construction are the first to say it is not a career option. These parents are not knowledgeable about the opportunities that exist for their children or the money that can be made working in the field.   Read more » about When Did It Become Socially Unacceptable to Obtain a Career in Construction?

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

This is the period we have been waiting for!  From every indication, and from many different sources, the next several years should see a robust construction market in all major sectors (commercial, industrial, residential and civil) and in all segments (e.g. office, medical, educational, retail, light industrial, etc.).  Companies that think and act strategically will use these coming years and this abundant market to build a stronger foundation so that they will add additional generations to their company’s future.  Those that think only opportunistically, will make money, but struggle again as soon as the cycle turns.   Read more » about The Most Strategic Word For Today’s Times: “No”

Most states add jobs year-over-year but not since May; most PPIs remain mild in June

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.

Seasonally adjusted construction employment increased in 38 states and the District of Columbia from June 2013 to June 2014 and decreased in 12 states, an AGC analysis of Bureau of Labor Statistics (BLS) data released Friday showed. The largest percentage gains were in Florida (11%, 41,700 jobs), Nevada (10%, 5,900) and Utah (9.3%, 6,800). Florida added the most jobs, followed by California (29,800, 4.7%) and Texas (19,100, 3.1%). The steepest 12-month percentage losses occurred in New Jersey (-8.1%, -11,200) and Alaska (-5.5%, -900). New Jersey lost the most construction jobs, followed by Arizona (-4,500, -3.6%). For the month, 21 states and D.C. added construction jobs, 27 states lost jobs and Arizona and New Mexico had no change.   Read more » about AGC's Data DIGest: July 14-18, 2014

Even though the humanitarian crisis along the border has complicated the issue and certain political setbacks have caused pundits to proclaim that immigration reform is dead, business leaders at the state and national levels are pushing as hard as ever for comprehensive reform.

Bill Gates, Warren Buffet, and Sheldon Adelson – three men who could not be more different in their politics – contributed an op-ed article to the New York Times last week stating that time for reforming the system is long past due.  The trio argued that it is ridiculous for Washington to grind to a halt simply because one member of congress lost a Republican primary election and the reason for it may have been that lawmaker's support for comprehensive immigration reform:

“The three of us vary in our politics and would differ also in our preferences about the details of an immigration reform bill.  But we could without doubt come together to draft a bill acceptable to each of us.  We hope that fact holds a lesson: You don’t have to agree on everything in order to cooperate on matters about which you are reasonably close to agreement.  It’s time that this brand of thinking finds its way to Washington.   Read more » about Despite Setbacks, Business Leaders Push Immigration Reform

The Texas Uniform Trade Secrets Act (TUTSA) became effective on September 1, 2013.  Texas was the 48th state to adopt a version of the model Uniform Trade Secrets Act.

Texas businesses should welcome the consistency offered by TUTSA, since it brings our law in line with that of most other states (the exceptions are New York and Massachusetts).

The statute defines “trade secret” as: “information, including a formula, pattern, compilation, program, device, method, technique, process, financial data, or list of actual or potential customers or suppliers, that:

(A) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and   Read more » about Trade Secret Protection: New Law, Practical Issues

Starts jump in June, Reed says; several reports point to growth in diverse segmentsin May

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 value of nonresidential construction starts in June jumped 14% compared with June 2013, Reed Construction Data reported Friday, based on data it collected. Cumulative starts for the first half of 2014 exceeded January-June 2013 starts by 2.4%. Nonresidential building starts slipped 3.1% year-to-date, with a 14.5% drop in commercial starts offsetting gains of 5.9% for institutional buildings and 13.5% for industrial (manufacturing). Heavy engineering starts rose13% year-to-date.   Read more » about AGC's Data DIGest: July 7-11, 2014

This past week, the Austin Chapter AGC Safety Committee visited with Marco Ramos, who was recently hired to enforce the City of Austin's rest break ordinance for construction workers.  Ramos discussed his new compliance role and said he proactively visits sites and also responds to complaints lodged via the City's 311 phone system.  Typically, the first thing he looks for on site is the required signage to be posted per the ordinance.  He also talks with workers about rest breaks and water availability.  He can issue citations for failure to post signage or allow breaks.  Ramos said there is good news in that he is seeing 90% and higher compliance thus far on Austin's commercial jobsites.

Since enactment of the rest break ordinance in 2010, the Austin AGC has consistently expressed concerns about the challenges of enforcement, however well-intentioned the ordinance may be.  The Austin AGC obviously and strongly supports rest breaks for workers, particularly in the extreme heat,   Read more » about AGC Safety Committee Visits with Austin City Rest Break Compliance Inspector

The Austin School Board recently voted to adopt Davis-Bacon federal wage rates on construction of facilities under the district's new $490 million bond package.  While some have hailed this as a historic step, it is seen by many as merely a short-term fix for attracting workers into the skilled trades.  In short: more needs to be done.

After a hot debate, the board narrowly voted 5 to 4 to adopt Davis-Bacon wage rates. The crowd in the board room erupted into applause.  It's good news for some, but not for all.  As public radio in Austin pointed out, pay will go up for those in trades like electricians and security technicians, but others like general laborers will actually see their wages go down to the point where they will be earning less than $8 an hour.

Trustee Cheryl Bradley joined with three others in voting against Davis-Bacon wage rates, arguing that it made no sense.  “You’re not going to be buying food for your family on $7.75 an hour,” Bradley said.  “You’re not going to be paying rent.  You will be on government subsidy.”   Read more » about Austin School District Should Follow Houston ISD’s Progress on Construction Jobs

The following article originally appeared in the July 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 continues to be on fire.  CBRE’s early preview of the second quarter shows all sectors are still busy.  Office absorption and asking rates are up quarter over quarter.  It is the same story in light industrial and retail with the latter reportedly having 2.7 msf under construction in the second quarter.

Multi-family has 25,000 units under construction in the greater Houston area.  The rising rates in apartments have two primary drivers.   Read more » about Houston’s Monthly Metrics: July

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