At a seasonally adjusted annual rate of $424.7 billion, new construction starts in August advanced 8 percent, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. The gain followed a 10 percent decline in July, and continued the fluctuating pattern that’s been present in recent months. The pickup for total construction in August was the result of greater activity for each of construction’s three main sectors—nonresidential building, residential building, and nonbuilding construction. For the first eight months of 2011, total construction on an unadjusted basis was reported at $274.8 billion, down 6 percent from the same period a year ago.
The August statistics lifted the Dodge Index to 90 (2000=100), up from July’s 83.
"During the first five months of this year, total construction had trended downward, but over the next three months an up-and-down pattern has emerged,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "This suggests that construction starts are beginning to stabilize after the earlier loss of momentum. At the same time, total construction remains on track to register a moderate decline for 2011 as a whole, after leveling off in 2010. While August showed some improvement for institutional building and public works, each of these sectors will be subject to funding cutbacks at the federal and state levels of government. Single family housing continues to see homebuyer demand restrained by the sluggish economic environment and more restrictive lending standards. And, what appears to be the early signs of recovery for commercial building may well end up being deferred by rising investor concern about employment growth and the near term prospects for the U.S. economy.”
Nonresidential building in August grew 7 percent to $153.6 billion (annual rate). The institutional side of the nonresidential market showed a strong gain for healthcare facilities, which jumped 107 percent. Lifting the healthcare total in August was the start of a $385 million U.S. Army medical center at Fort Hood, Texas. Additional support came from the start of two large hospital projects in California, valued at $270 million and $164 million respectively, and a $220 million hospital project in Maine. The public building category climbed 55 percent in August from its low July amount, reflecting the start of a $115 million courthouse building in Philadelphia. The amusement-related category in August increased 18 percent, helped by the start of a $45 million sports arena in Bangor, Maine, and a $45 million convention center in Cedar Rapids, Iowa. Heading downward in August was the educational building category, which fell 7 percent despite groundbreaking for a $95 million high school in Maryland and an $86 million biomedical research facility in Minnesota. Also retreating in August were churches, which were down 11 percent, and transportation terminals, down 8 percent.
The commercial side of the nonresidential market showed a mixed pattern by project type. Hotel construction surged 125 percent from a weak July, helped by the start of a $154 million convention center hotel in Nashville. Warehouse construction grew 30 percent, with the push coming from the start of a $150 million distribution center in Martinsburg, W.V., while store construction advanced 18 percent. Moving in the opposite direction was office construction, which fell 18 percent in August. A steeper decline was reported for the manufacturing building category, which retreated 62 percent from July which included the start of a $1.5 billion semiconductor plant in Arizona.
Residential building, at $128.0 billion (annual rate), increased 4 percent in August. Most of the upward movement came from multifamily housing, which rose 15 percent in August, continuing the trend that has been present for much of 2011. Large multifamily projects that reached groundbreaking in August included the $362 million Gotham West apartment complex in New York, N.Y., a $137 million apartment complex in Marina Del Ray, Calif., and a $90 million apartment building in Boston. Through the first eight months of 2011, the top five metropolitan areas in terms of the dollar amount of multifamily projects were New York City, Washington D.C., Boston, Chicago and Los Angeles.
Single-family housing in August managed to edge up 1 percent, as the pattern of recent months suggests that activity is stabilizing at a low volume after the declines witnessed earlier in 2011. The pace for single-family housing in August, in dollar terms, was still 2 percent below the average monthly pace that was shown during 2010.
The 6 percent shortfall for total construction on an unadjusted basis during the January–August period of 2011 reflected a mixed performance by sector. Nonresidential building fell 8 percent year-to-date, as a 17 percent drop for institutional building outweighed a 4 percent gain for commercial building and a 72 percent gain for manufacturing building. Residential building decreased 5 percent year-to-date, with single-family housing down 7 percent while multifamily housing advanced 8 percent. Nonbuilding construction year-to-date slipped 4 percent, as public works retreated 23 percent while electric utilities soared 129 percent.
By region, total construction starts showed the following year-to-date performance: the Midwest and Northeast, each down 13 percent; the South Atlantic, down 6 percent; the South Central, down 4 percent; and the West, up 4 percent.
Builder Confidence Virtually Unchanged in September
Builder confidence in the market for newly built, single-family homes dipped by a single point to 14 on the National Association of Home Builders/Wells Fargo Housing Market Index for September, released Sept. 19. The index has now held between 13 and 16 for six consecutive months.
"Very little has changed in terms of housing market conditions so far this year,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nevada. "Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties that they have seen for some time. Beyond this, both builder and consumer confidence took a hit in recent weeks with the market disruptions caused by the S&P downgrade and congressional gridlock on the budget deficit.”
"The fact that the HMI continues to hover within such a narrow, low range reflects builders’ awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today’s uncertain economic climate,” added NAHB Chief Economist David Crowe. "While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market.”
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good,” "fair” or "poor.” The survey also asks builders to rate traffic of prospective buyers as "high to very high,” "average” or "low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Each of the HMI’s three component indexes recorded declines in September. The component gauging current sales conditions slipped one point to 14, while the components gauging sales expectations in the next six months and traffic of prospective buyers each declined two points, to 17 and 11, respectively.
The Midwest was the only region to post a gain in its HMI score for September, edging up one point to 11. Meanwhile, the Northeast and South each posted two-point declines to 15 and the West posted a three-point decline to 12.
ABI Turns Positive after Four Straight Monthly Declines
On the heels of a period of weakness in design activity, the Architecture Billings Index took a sudden upturn in August. As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending. The American Institute of Architects reported the August ABI score was 51.4, following a very weak score of 45.1 in July. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.9, up sharply from a reading of 53.7 the previous month.
"Based on the poor economic conditions over the last several months, this turnaround in demand for design services is a surprise,” said AIA Chief Economist Kermit Baker, Ph.D., Hon. AIA. "Many firms are still struggling, and continue to report that clients are having difficulty getting financing for viable projects, but it’s possible we’ve reached the bottom of the down cycle.”
Key August ABI highlights include the following:
• Regional averages: Midwest (49.0), South (47.4), West (47.4), Northeast (46.5).
• Sector index breakdown: mixed practice (50.9), institutional (48.5), commercial / industrial (46.0), multi-family residential (44.8).
• Project inquiries index: 56.9.
The regional and sector breakdowns are calculated as a 3-month moving average, whereas the index and inquiries are raw numbers.
Housing Starts Decline, Permits Rise in August
Nationwide housing starts declined 5.0 percent to a seasonally adjusted annual rate of 571,000 units in August, according to figures released Sept. 20 by the U.S. Commerce Department. The decline was primarily on the more volatile multifamily side, with single-family housing production edging down just 1.4 percent. Meanwhile, permits for new construction posted modest gains in both sectors.
"At this point, most builders are only looking to replenish their depleted inventories of new homes for sale, but otherwise holding off on new projects,” said National Association of Home Builders Chairman Bob Nielsen, a home builder from Reno, Nev. "While we would like to get more crews back on the job, we need to see solid improvement in consumer demand, greater access to credit for both builders and buyers, and a reduction in the number of foreclosed properties on the market before we can ramp up new production.”
"Today’s numbers are completely consistent with NAHB’s forecast for the quarter, and are in keeping with the anemic economic and job growth we are seeing across most of the country,” said NAHB Senior Economist Robert Denk. "That said, we continue to anticipate modest gains in new-home production through the end of this year with greater momentum building into 2013, and some pockets of improvement are already evident in about a dozen metros nationwide.”
Single-family housing starts declined 1.4 percent to a seasonally adjusted annual rate of 417,000 units in August, while multifamily production, which tends to display greater volatility on a month-to-month basis, declined 13.5 percent to a 154,000-unit rate. Regionally, combined starts activity was mixed in August, with the Midwest and West posting gains of 2.6 percent and 2.2 percent, respectively, and the Northeast and South posting declines of 29.1 percent and 3.3 percent, respectively.
Building permits, which can be an indicator of future building activity, rose 3.2 percent to a seasonally adjusted annual rate of 620,000 units in August, their highest level since last December. Single-family permits gained 2.5 percent to 413,000 units, while multifamily permits gained 4.5 percent to 207,000 units.
Permit issuance rose in three out of four regions in August. The South was the only region to post a decline, of 1.3 percent, while the Northeast, Midwest and West posted gains of 3.3 percent, 6.3 percent, and 11.3 percent, respectively.
New Design Competition Showcases Both Ideas and Reality
Armstrong World Industries, Lancaster, Pa., announces "ideas 2 reality,” a professional design competition to showcase Armstrong commercial products in either an "idea” or a "reality” stage and to acknowledge talented and visionary design professionals.
For the idea portion of the contest, architects and interior designers can upload sketches or renderings created with Armstrong flooring or ceiling products in mind, providing them with an outlet to share creative concepts without having a finished installation. The reality portion is where specifiers can upload pictures of completed projects where Armstrong ceiling or flooring products were used.
Conducted in conjunction with the International Interior Design Association, the competition has four categories: two "idea” categories, one for flooring and one for ceilings/walls, and two "reality” categories, one for flooring and one for ceilings/walls. There will be a winner in each category.
The competition recognizes that the right floor and ceiling add immeasurably to the beauty and function of the education, healthcare, retail, corporate or hospitality environment. Client satisfaction is key, and architects and designers recognize the value of specifying the highest quality materials along with the latest in design and technology.
Each of the two winners of the idea portion of the competition will receive a $2,500 spa vacation or cash equivalent. The two winners of the reality portion will each receive a crystal trophy and an exclusive catered event for their firm. The prizes have an estimated value of $2,500. All winners also will receive an Apple iPad2.
Idea category winners will be determined by an online popular vote. Reality category winners will be determined by a panel of IIDA professionals.
To enter the idea category, entrants must submit an online entry with perspective sketches or renderings. For the reality category, entrants must enter online and upload photographs of the finished installation. Reality projects must have been completed in 2009 or later.
If an idea or reality entry uses both flooring and ceilings/walls, the entrant may submit it in more than one category. Deadline for both idea and reality submissions is Oct. 28, 2011.
Submissions will be judged on the creativity of the design, the use of Armstrong products, originality of the design, and the successful incorporation of other interior products.
For more information and to submit entries for the Armstrong "ideas 2 reality” Design Competition, visit http://armstrongi2r.strutta.com/about.
10,000th LEED Building Certified
The U.S. Green Building Council announced Aug. 31 that the Green Building Certification Institute has certified the 10,000th LEED commercial project. Created in 2000, the LEED green building program has become a global symbol of sustainable building certifying more than 1.4 million square feet of new and existing buildings every day.
"Business leaders around the globe are using LEED to design, build, maintain and operate their buildings,” said Rick Fedrizzi, president, CEO and founding chair of the U.S. Green Building Council. "Ten thousand commercial certified buildings stand as a powerful example that a strong triple bottom line translates to real, tangible success.”
The Live Oak Family Resource Center in Santa Cruz, Calif., which was awarded LEED Platinum by GBCI Aug. 31, is the milestone project earning the 10,000th LEED certification. A vibrant community center, Live Oak Family Resource Center is a place for families to come for guidance, information and referrals on childbirth and parenting, health education and services, youth and senior programs, food distribution and other community needs.
"It seems an appropriate reflection of USGBC’s mission of ‘green buildings for everyone within a generation’ that a LEED Platinum community center providing support services to local families would earn this special distinction,” said Peter Templeton, president, GBCI. "LEED registered and certified projects now number more than 100,000 globally. This number underscores the confidence people have in LEED for saving water, energy, resources and money, and for delivering healthier and more comfortable buildings for the people who occupy them.”
"Pilot-tested in 1998, LEED fully launched in 2000 with the first rating system for new construction and major renovation projects. Since then, LEED has evolved to offer rating systems for existing buildings, commercial interiors, core and shell projects, homes, healthcare facilities, schools, neighborhood developments and more. In 2008, USGBC introduced its Building Performance Partnership (BPP) to emphasize the importance of ongoing sustainable operations. BPP allows LEED projects to track and monitor their energy and water use over time so that the building continues to operate as intended.
USGBC also offers the LEED Volume Program for new and existing building owners who are looking to certify multiple projects like retail and hotel chains, bank branches and other similar project groupings.
"We’ve just scratched the surface of what’s possible in the green building field,” added Fedrizzi. "In 10 short years, we’ve fundamentally changed how we construct and operate buildings and communities, and during that time LEED has continued to evolve, pushing sustainable building practice forward with each evolution. But there’s much more to do. The market continues to embrace LEED as the leadership standard it was meant to be and our kids deserve the outcomes that green buildings contribute to their future.”
People in the News
Hacker Industries, Inc., Newport Beach, Calif., has hired Nick Quercetti Jr. as regional sales and marketing manager based in the Philadelphia area. In his new role Quercetti will actively support the sale of Hacker branded products and Hacker Industries’ network of licensed applicators in the Midwest and Northeast.
Quercetti joins the Hacker Industries Inc.’s management team with more than 30 years of business development experience, which includes owning and operating several application and marketing businesses in the floor underlayment industry. An innovative team leader, he has also played an integral role in the growth and development of several companies in a variety of industries.
Niles Building Products, headquartered in Niles, Ohio, announces the addition of Mike Graham as Regional Sales Manager – Southeast.
In this new role, Graham will oversee sales management of current accounts and will be charged with the development of new and strategic accounts.
Graham comes to Niles Building Products with 30 years experience in the building materials industry. He started his career with National Gypsum and most recently held several key management positions with Dietrich Metal Framing.
Bob Drury, executive director of the Northwest Wall and Ceiling Bureau, an AWCI chapter, will retire this fall after 39 years in the industry.
Drury joined the Northwest Lath and Plaster Bureau as architectural consultant in 1972. Shortly after joining the association, he was appointed executive director. In the early 1980s, the organization’s name was changed to Northwest Wall and Ceiling Bureau.
Drury is noted for being a respected authority and expert on exterior and interior wall and ceiling standards, design and handling of jobsite related issues. He has been the spokesperson for the wall and ceiling industry in the Northwest.
Throughout the years, Drury has developed an excellent reputation and positive working relationships with architects, building officials, building owners and others in the construction community. He has established NWCB as the go-to place for information and education. Drury is also the author of NWCB’s "Stucco Resource Guide” and numerous technical documents standards. He has been active in local construction associations and with the regional building departments.
Mark Eisenmann will replace Drury as NWCB executive director on Sept. 6, 2011.
Eisenmann has 28 years of experience in the wall and ceiling industry. Most recently he worked as area manager and branch manager for a major specialty contracting company in the Puget Sound area.
Companies in the News CertainTeed Gypsum, Tampa, Fla., has successfully executed an intensive sustainability training program to nearly 1,000 employees in all of the company’s gypsum plants in the United States and Canada. Additionally, several of the company’s territory sales managers and marketing professionals have earned their Leadership in Energy & Environmental Design® Green Associate credential.
"We take a holistic approach to sustainability that includes product innovation, environmentally responsible manufacturing practices, and a well-trained, knowledgeable team of employees,” says John Donaldson, president of CertainTeed Gypsum. "We are making significant contributions to the performance and longevity of homes and buildings, strengthening our position as the preferred supplier for innovative, sustainable building products and systems.”
The training program implemented at the company’s plants focused heavily on water conservation, waste reduction and energy conservation. Employees were trained in best practices and encouraged to find creative solutions that increase efficiency, eliminate waste and enhance recycling efforts. As a result, the company has reduced waste by 20 percent over the course of two years.
To achieve the LEED Green Associate credential, the company’s sales and marketing associates tackled course work designed by U.S. Green Building Council and successfully completed a comprehensive exam. The LEED Green Associate credential demonstrates knowledge of green design, construction and operations.
AMAROK, Tampa, Fla., recently honored CertainTeed Gypsum with its coveted Preferred Vendor of the Year Award. After polling its members on the company whose performance went above and beyond in the past year, AMAROK overwhelmingly selected CertainTeed Gypsum.
AMAROK is comprised of leading independent wall and ceiling distributors throughout the United States. The cooperative serves approximately 144 independent distributors with 292 locations in the United States and represents approximately $2 billion in sales.
Offering a broad range of gypsum and finishing products for interior and exterior needs, CertainTeed Gypsum has served the North American building industry for more than 80 years and is a subsidiary of Saint-Gobain, the world’s leading producer of gypsum products. This, in combination with the full range of affiliated CertainTeed Corporation building products, provides architects, contractors, builders and dealers one partner to provide service and support for commercial and residential building projects.
Intercorp, an importer of construction fasteners under the Strong-Point brand, has relocated its Portland branch to a much larger and more strategic location in Tualatin, Ore. The company says the new location will allow them to stock a larger inventory and deliver them to any location in the region within two days.