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May 2015   

Study: OSHA Officials Underestimated Cost of Silica Rule by $4.5 Billion a Year


A new report released March 26 by the Construction Industry Safety Coalition found that the Occupational Safety and Health Administration’s proposed silica standards for U.S. construction industry will cost the industry $5 billion per year—roughly $4 .5 billion per year more than OSHA’s estimates. The coalition cautioned that the flawed cost estimates reflect deeper flaws in the rule and urged the federal agency to reconsider its approach.

OSHA’s proposed rule, intended to drastically reduce the permissible exposure limit of crystalline silica for the construction industry, has been underestimated by the Agency to cost the construction industry about $511 million a year. The new estimates released today by CISC estimate that the costs to the industry will actually be approximately 10 times the OSHA estimate—costing nearly $5 billion a year.

The cost and impact analysis from OSHA reflects a fundamental misunderstanding of the construction industry. The OSHA analysis included major errors and omissions that account for the large discrepancies with the CISC report. The CISC report estimates that about 80 percent of the cost ($3.9 billion/year) will be direct compliance expenditures by the industry such as additional equipment, labor and record-keeping costs. The remaining 20 percent of the cost ($1.05 billion/year) will come in the form of increased prices that the industry will have to pay for construction materials and building products such as concrete block, glass, roofing shingles and more. OSHA failed to take into account these additional costs to the construction industry that will result from the proposed standard, which will then be passed down to customers in the form of higher prices.

Not only will the proposed rule be more costly than originally estimated, but it would translate into significant job losses for the construction industry and the broader economy, according to the CISC. The CISC estimates that the proposed regulation would reduce the number of jobs in the U.S. economy by more than 52,700 yearly. That figure includes construction industry jobs, jobs in related industries such as building material suppliers, equipment manufacturers and architects, as well as losses in non-construction sectors. Additionally, the losses are full time employee positions. Factoring in the many part-time or seasonal jobs, that number could increase to close to 80,000 positions lost.

The full CISC report, which was also submitted to OSHA, can be found at

The members of the CISC include the American Road and Transportation Builders Association, American Society of Concrete Contractors, American Subcontractors Association, Associated Builders and Contractors, Associated General Contractors, Association of the Wall and Ceiling Industry, Building Stone Institute, Concrete Sawing & Drilling Association, Construction & Demolition Recycling Association, Distribution Contractors Association, Interlocking Concrete Pavement Institute, International Council of Employers of Bricklayers and Allied Craftworkers, Leading Builders of America, Marble Institute of America, Mason Contractors Association of America, Mechanical Contractors Association of America, National Association of Home Builders, National Association of the Remodeling Industry, National Demolition Association, National Electrical Contractors Association, National Roofing Contractors Association, National Utility Contractors Association, Natural Stone Council, the Association of Union Constructors and the Tile Roofing Institute.

Construction Put in Place to Grow 8 Percent in 2015
Total construction put in place for 2015 is predicted to grow 8 percent according to a March 24 report from FMI. This supports earlier FMI predictions that CPIP will top $1 trillion in 2015, something the market has not seen since 2008. This indicates that the economy is on track for a resilient recovery.

"The current growth cycle appears to be broad-based and sustainable,” says Randy Giggard, managing director of research services for FMI. "Most of the new construction activity is in the private sector. Projects dependent on government spending, especially those involving infrastructure, continue to be at the mercy of politics.”

Geographically, larger cities are experiencing strong construction growth due in part to increases in rents and declining inventory for housing and office space. The sectors expected to experience the highest growth rate are lodging construction (16 percent CPIP growth), commercial construction (15 CPIP growth), manufacturing construction (11 CPIP growth), office construction – 11 CPIP growth) and residential construction (9 percent CPIP growth).

Builder Confidence Rises Four Points in April
Builder confidence in the market for newly built, single-family homes in April rose four points to a level of 56 on the National Association of Home Builders/Wells Fargo Housing Market Index released April 15.

"As the spring buying season gets under way, home builders are confident that current low interest rates and continued job growth will draw consumers to the market,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

"The HMI component index measuring future sales expectations rose five points in April to its highest level of the year,” said NAHB Chief Economist David Crowe. "This uptick shows builders are feeling optimistic that the housing market will continue to strengthen throughout 2015.”

Derived from a monthly survey that NAHB has been conducting for 30 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 for 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.

All three HMI components registered gains in April. The component charting sales expectations in the next six months jumped five points to 64, the index measuring buyer traffic increased four points to 41, and the component gauging current sales conditions rose three points to 61.

Looking at the three-month moving averages for regional HMI scores, the South rose one point to 56 and the Northwest held steady at 42. The Midwest fell by two points to 54 and the West dropped three points to 58.

New Home Sales Rise 7.8 Percent in February
Sales of newly built, single-family homes rose 7.8 percent in February to a seasonally adjusted annual rate of 539,000 units from an upwardly revised January reading, according to data released March 24 by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since February 2008.

"Most sales activity continues to be among existing home owners who are trading up to new construction and taking advantage of low mortgage rates,” said NAHB Chief Economist David Crowe. "First-time home buyers remain absent from the market, restricted by tight lending conditions.”

The inventory of new homes for sale was at 210,000 in February, which is a 4.7-month supply at the current sales pace.

Regionally, new home sales increased 152.9 percent in the Northeast and 10.1 percent in the South. Sales dropped 6 percent in the West and 12.9 percent in the Midwest.

Architecture Billings Index Improves in February: Demand for Institutional Projects Strong
After its first negative score in 10 months, the Architecture Billings Index showed a nominal increase in design activity in February, and has been positive 10 out of the past 12 months. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lead time between architecture billings and construction spending. The American Institute of Architects reported the February ABI score was 50.4, up slightly from a mark of 49.9 in January. This score reflects a minor increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.6, down from a reading of 58.7 the previous month.

"The health of the institutional market has been the key factor for positive business conditions for the design and construction industry in recent months, and it is encouraging to see that sector remain on solid footing,” said AIA Chief Economist Kermit Baker, Hon. AIA, Ph.D. "However, we’re seeing some slowing in the other major construction sectors. Design billings for residential projects had its first negative month in over three years, and commercial design billings have seen only modest growth in recent years.”

Key February ABI highlights include the following:

• Regional averages: South (52.5), Midwest (50.2), Northeast (48.0), West (46.7).

• Sector index breakdown: institutional (52.2), commercial/industrial (51.4), multifamily residential (48.9), mixed practice (45.3).

• Project inquiries index: 56.6.

• Design contracts index: 50.0.

February Construction Starts Jump 16 Percent
At a seasonally adjusted annual rate of $724.3 billion, new construction starts in February advanced 16 percent compared to the previous month, according to Dodge Data & Analytics. Nonresidential building registered a sharp gain and residential building also strengthened in February, as growth for multifamily housing outweighed a loss of momentum by single-family housing. For the first two months of 2015, total construction starts on an unadjusted basis were up 34 percent from the same period a year ago. If projects in excess of $1 billion are excluded, the result would be more moderate gains for total construction—up 10 percent in February on a seasonally adjusted basis relative to January, and up 8 percent on an unadjusted basis during the first two months of 2015 relative to the same period a year ago.

The February statistics produced a reading of 153 for the Dodge Index (2000=100), compared to a revised 132 for January. For 2014 as whole, the Dodge Index averaged 123.

"Due to the presence of several unusually large projects, the first two months of 2015 witnessed an especially elevated level of activity that’s exceeded the underlying trend for construction starts,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. "At the same time, the first two months of 2015 have shown several noteworthy features that point toward the continued expansion for overall construction activity. For commercial building, both office buildings and hotels are continuing to track upward, supported by the increasing amount of private financing directed at real estate development. For institutional building, school construction is now seeing the benefits of large school construction bond measures that were approved in recent years, while healthcare facilities registered an unexpectedly strong performance in February. For residential building, multifamily housing continues to show brisk development activity in major cities. One area of concern for overall construction activity in 2015 relates to single-family housing: Will it be able to move beyond the extended plateau that took hold in 2014?

Nonresidential building, at $224.9 billion (annual rate), surged 42 percent in February after a relatively weak performance in January. The manufacturing building category was a major contributor, soaring 663 percent in February. If the manufacturing building category is excluded, nonresidential building in February would still have registered a 19 percent gain. The commercial building group grew 19 percent in February, with a varied performance by project type. Hotel construction bounced back 83 percent after a depressed January. Office construction in February climbed 19 percent, while both stores and warehouses registered a slower pace for construction starts in February, with stores down 9 percent and warehouses down 15 percent.

The institutional side of the nonresidential building market rebounded 20 percent in February after a lackluster January. Educational facilities, the largest nonresidential building category by dollar volume, grew 14 percent as it regained the upward momentum that was established in 2014. Healthcare facilities in February jumped 92 percent after a weak January. The smaller institutional categories in February were mixed. Gains were reported for transportation terminals, up 27 percent; and public buildings, up 22 percent; while declines were reported for churches, down 26 percent; and amusement-related projects, down 45 percent.

Residential building in February grew 5 percent to $245.7 billion (annual rate), making a partial rebound after an 8 percent decline in January. Multifamily housing registered a strong February, jumping 46 percent.

The 34 percent increase for total construction starts on an unadjusted basis during 2015, relative to 2014, was the result of greater activity for all three major construction sectors. Nonbuilding construction year-to-date soared 89 percent. Nonresidential building year-to-date increased 22 percent, with manufacturing buildings and institutional buildings each up 26 percent while commercial buildings climbed 15 percent. Residential building year-to-date improved 7 percent, with single-family housing up 7 percent and multifamily housing up 9 percent.

Added perspective is obtained by looking at twelve-month moving totals, in this case the 12 months ending February 2015 versus the 12 months ending February 2014, which lessens the volatility inherent in comparisons of just two months. On this basis, total construction starts advanced 11 percent, as the result of the following performance by major sector: nonresidential building, up 24 percent; residential building, up 9 percent; and nonbuilding construction, up 1 percent.

Proposed EPA Ozone Regulations Would Slash Thousands of Construction Jobs, Regulations Would Force Cement Plant Closures in Small, Rural Communities
The Environmental Protection Agency’s proposal to further tighten ozone standards could result in the loss of more than 45,000 construction jobs each year, slow the nation’s economy and impede vital infrastructure investments, says the Portland Cement Association, Skokie, Ill.

In comments filed to the EPA on March 17, PCA estimates that the cement industry alone would have compliance costs and plant closures that could lead to the loss of nearly 900 jobs. Cement manufacturing jobs are highly technical and well-paying, with an average wage of $77,481 per year. Most cement plants are located in small rural communities, so the impact would be felt disproportionately in those regions.

"A cement plant is vital to the economy of its community. When one is forced to close, the region loses jobs, it loses significant tax revenue for schools and public services, and it loses a strong supporter of local charities and civic activities,” said James Toscas, president and CEO at PCA. "During the past four decades, the United States has virtually eliminated the severe air pollution that currently plagues some other countries. However, regulators have continued to tighten air quality standards, often with little or no proven health benefit. This has gotten to the point where our essential industries have struggled to meet current standards, incurred significant costs, and in some cases had to simply shut plants down.”

Most cement and concrete in the United States is used for infrastructure. Higher costs for construction projects would mean that governments could afford fewer projects each year. As a result, PCA estimates that costs associated with compliance to the proposed standards would lead to the loss of 45,000 construction jobs each year.

U.S. Demand for Adhesives & Sealants to Reach $12.8 Billion in 2019
U.S. demand for adhesives and sealants is forecast to increase 2.8 percent per year to 6.4 billion pounds in 2019, valued at $12.8 billion. A turnaround in construction activity, combined with the expanding use of adhesives and sealants in manufacturing and assembly, will underpin demand gains. Analyst Carolyn Zulandt found that "adhesive bonding technologies will make further inroads in applications historically dominated by mechanical fasteners and other alternative joining systems.” Advances will be limited by trends toward high solids formulations and lower application weights. Market maturity and sluggish growth in paper packaging and other key markets will further restrain increases. These and other trends are presented in Adhesives & Sealants, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Emulsion and dispersion adhesives and sealants will remain the leading product type. The ongoing displacement of solvent-based products is expected to support increases as end users strive to meet emissions regulations through the adoption of water-based and higher solids formulations. The fastest annual growth through 2019 is expected for reactive adhesives and sealants, driven by rising demand in major markets and trends favoring higher value materials. Silicone and polyurethane adhesives and sealants will post the most rapid gains among reactive types, supported by their superior performance characteristics.

Among adhesives and sealants markets, the fastest annual gains are projected for construction, which will recover from the declines of the 2004–2014 period. Accelerated new building construction will fuel gains, as will increased improvement and repair activity and rising infrastructure spending. Faster gains will be prevented by the development of higher performance products with longer replacement cycles. The slowest annual gains are projected for the packaging market, which will be hampered by weakness in the paper and paperboard packaging segment.

Manufacturing and assembly will continue to be the largest market for adhesives and sealants. Within this market, the tapes and labels segment is expected to remain the leading outlet for adhesives, driven by healthy advances in the production of pressure sensitive tapes and labels. Among other segments, solid increases are expected in the aerospace, machinery, motor vehicle and electrical and electronic markets, where adhesives and sealants will continue to displace alternative fasteners.

Industry Awards
The American Subcontractors Association presented its prestigious Excellence in Ethics Awards in March, and two AWCI member companies were recipients—South Valley Drywall, Littleton, Colo., and Marek Brothers Systems, Inc., Houston, Texas—along with 11 other subcontractors for achieving "the highest standards of internal and external integrity for a subcontracting firm.”

The Association of Wall Ceiling & Carpentry Industries of New York, Inc. honored AWCI President Scott Casabona, president and CEO of Sloan & Company, West Caldwell, N.J., as its contractor of the year. In addition, Joseph A. Geiger of the New York City District Council of Carpenters as named Union Official of the Year.

AWCI member contractor TJ Wies Contracting, Inc. was awarded second place in their division of the 16th Annual Associated General Contractors of America/Willis Construction Safety and Excellence Awards.

TJ Wies Contracting finished second among all specialty contractors in the nation with annual man-hours between 300,001 to 500,000. This is the third time TJ Wies Contracting has been recognized by the AGC of America; in 2009 they finished third in the same division, and last year placed second.

The AGC/Willis CSEA recognizes construction companies that excel at safety performance. The judges look for evidence of company management commitment, active employee participation, safety training, worksite hazard identification and control, and safety innovation.

TJ Wies Contracting, Inc. is one of the Midwest’s consistently top-ranked commercial wall and ceiling sub-contractors. Areas of work include metal stud framing, drywall, insulation, rough and finished carpentry, acoustical ceilings and wall panels, EIFS, fireproofing, plaster, and firestopping. Headquartered in Lake St. Louis, Mo., with an additional office in Jefferson City, Mo., TJ Wies serves mid-Missouri to Southern Illinois. TJ Wies Contracting is currently celebrating its 20th year in business.

Lifetime AWCI Member Hilti, Inc., Tulsa, Okla., has been recognized as one of this year’s Best Workplaces and ranked No. 89 on the 2015 Fortune magazine’s "100 Best Companies to Work for.”

The selection process, created by Great Place to Work®, includes an employee survey and an in-depth questionnaire about the company programs and practices. Great Place to Work® then evaluates each application using its unique methodology based on five dimensions: credibility, respect, fairness, pride and camaraderie.

Hilti was also recognized with a "Great Rated!” designation. This rating and review highlights what makes the workplace culture great in areas like professional development and training, company atmosphere, benefits and rewards.

People in the News
Trinity Drywall and Plastering Systems in Ft. Worth, Texas, announces the appointment of Scott Raines as vice president of estimating in the company’s plaster division and the addition of Stan Green, also in the company’s plaster division.

Raines has been with the company since 2010 and has led the plaster/EIFS/synthetic stone estimating service efforts, playing a key role in the company’s success and growth.

With just under 40 years in the lath and plastering business, Green brings a wealth of knowledge and experience to this ancient and honored craft. He has an extensive list of completed projects involving government projects, high-rise, mid-rise, entertainment facilities, hospitals, retail and more.

Parex USA, Inc. announces the addition of two new hires to the marketing department: Kevin Rantin, marketing director, and Tiffany Awischus, product manager for Merkrete Tile & Stone Installation Systems.

Rantin brings with him over 25 years of sales and marketing experience in the building and irrigation industries. Rantin’s appointment as marketing director is part of a broader initiative by parex usa to focus on growth in both the commercial and residential markets and increase awareness of all brands with architects, builders, distributors and applicators. His diverse experience in sales, marketing and operations will be an asset to managing the marketing department and expanding Parex USA’s position in the market.

Awischus joined Parex USA in 2013 as a flooring manager in the R&D department. She holds a bachelor’s degree in chemistry from the University of California, Irvine.

Companies in the News
Gypsum Management and Supply, Inc., Tucker, Ga., has entered the California and Hawaii markets by acquiring San Diego–based J&B Materials, Inc. and its affiliated Hawaiian operation, Pono Building Materials, LLC. In addition, GMS has signed an agreement to acquire Ohio Valley Building Products based in Wheeling, W.Va.

J&B Materials has been a building materials supplier for more than three decades. With locations in El Cajon, Escondido, Riverside and El Centro, Calif., and one in Honolulu, J&B offers a variety of building products including drywall, stucco, lath and plaster, and fasteners.

Ohio Valley Building Products will be the 34th wholly owned subsidiary of GMS. The deal marks the entrance of GMS into West Virginia, western Pennsylvania and eastern Ohio.

Builders FirstSource, Inc., a supplier and manufacturer of structural and related building products for residential new construction in the United States, has entered into a definitive purchase agreement to acquire ProBuild Holdings LLC, one of the nation’s largest professional building materials suppliers, in an all-cash transaction valued at approximately $1.63 billion. The transaction, which was approved by the Builders FirstSource Board of Directors, is subject to customary closing conditions and regulatory approvals and is expected to close in the second half of 2015.

Products in the News
PABCO® Gypsum, Rancho Cordova, Calif., has won multiple Awards for Design Excellence. In the Building Materials category, PABCO’s QuietRock® ES won a Gold award and QuietRock® ES Mold Resistant took the Platinum award. Other Quiet® products, QuietPutty® and QuietSeal® Pro, were recognized as finalists.

ADEX is the largest and most prestigious awards program for product and project design in the industry and is sponsored by Design Journal magazine, which is the international trade resource for interior designers, architects and facility managers since 1988. This is the first time PABCO Gypsum has won recognition from the Awards for Design Excellence program.

Hunter Douglas’ 150F – Exterior Ceiling System has received Miami-Dade County’s Notice of Acceptance (NOA), Miami-Dade County, Florida, NOA No. 14-1222.04 (expires March 19, 2020). The first of its kind for an exterior metal ceiling product, the certification confirms the product was designed and tested in accordance with the requirements of the Florida Building Code 5th edition (2014), including High Velocity Hurricane Zone provisions and Miami-Dade requirements.

New on the ’net
Insulation contractors have a new recruitment tool this year, thanks to an online job board and training center unveiled by CertainTeed. Come Together, the aptly named mobile-friendly website, quickly connects insulation contractors looking to hire with qualified insulation installers looking for work.

Found at, the tool gives insulation contractors a targeted means of finding and reaching out to qualified installers without having to spend a lot of their own time and money. The Come Together tool allows contractors to easily upload a company profile; post permanent, part-time or temporary jobs, including skills and certificates required; review installer profiles; and connect directly with installers they are interested in interviewing.

Installers can tap into the free service to find work by searching for job openings with CertainTeed insulation companies in their area. They are also encouraged to upload personal profiles that provide hiring contractors at-a-glance details of their skills, years of experience, type of work sought and more. In addition, the site offers free online training that provides installers an overview of building science and the basics of insulation installation.

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