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July 2015   

Builder Confidence Hits Yearly High in June


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Builder confidence in the market for newly built, single-family homes in June rose five points to a level of 59 on the National Association of Home Builders/Wells Fargo Housing Market Index released June 5. This is the highest reading since September 2014.

"Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

"The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” said NAHB Chief Economist David Crowe. "At the same time, builders remain sensitive to consumers’ ability to buy a new home.”

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 posted healthy gains in June. The component gauging current sales conditions jumped seven points to 65, the index charting sales expectations in the next six months increased six points to 69, and the component measuring buyer traffic rose five points to 44.

Looking at the three-month moving averages for regional HMI scores, the South and Northeast each rose three points to 60 and 44, respectively. The West posted a two-point gain to 57 while the Midwest dropped by one point to 54.

Dodge Momentum Index Unchanged in May
The Dodge Momentum Index held steady at 122.3 (2000=100) in May, reported Dodge Data & Analytics on June 5. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. After rising over the course of 2014, the Index thus far in 2015 has been basically flat, consistent with other measures highlighting sluggish economic conditions. Even with this near term pause, the Index in May was still up 6.1 percent compared to the same month a year ago. Several factors are expected to help the Index move beyond its current plateau and regain an upward track later in 2015, including further improvement by market fundamentals for commercial real estate and the increased funding support for construction projects coming from state and local governments.

In May, planning activity by sector was varied, with institutional building climbing 3.1 percent while commercial building fell 2.2 percent. Within the institutional sector there were eight projects that exceeded $100 million, including the $466 million Vassar Brothers Medical Center Pavilion in Poughkeepsie, N.Y., and the $400 million Covenant Medical Center Tower in Lubbock, Texas. There were six commercial projects in May valued at over $100 million, including a $300 million warehouse and distribution center in Kearny, N.J., and a $113 million retail center in Sarasota, Fla.

Developers’ Confidence about Multifamily Market Remains Steady in the First Quarter
The Multifamily Production Index, released May 28 by the National Association of Home Builders, held steady with a reading of 54 for the first quarter of 2015. This is the 13th consecutive quarter with a reading of 50 or above.

The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse.

The MPI provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units and "for-sale” units, or condominiums. The MPI component tracking low-rent units increased two points to 54, market-rate rental units dipped three points to 59 and for-sale units held steady at 50.

The Multifamily Vacancy Index, which measures the multifamily housing industry’s perception of vacancies, dropped three points to 36, with lower numbers indicating fewer vacancies. This is the lowest reading since the fourth quarter of 2012.

"The steady performance of the MPI reflects the stable production rate we’ve seen recently in apartments and condos,” said NAHB Chief Economist David Crowe. "In terms of vacancies, the MVI is the lowest it’s been in the last couple of years. As more renters enter the market after having put off forming their own households for an extended period, demand for multifamily housing continues to strengthen.”

Historically, the MPI and MVI have performed well as leading indicators of U.S. Census figures for multifamily starts and vacancy rates, providing information on likely movement in the Census figures one to three quarters in advance.

For data tables on the MPI and MVI, visit www.nahb.org/mms.

New Construction Starts Up Again: 10 Percent Advance in April
Through the first four months of 2015, total construction starts on an unadjusted basis were reported at $208.2 billion, up 24 percent from the same period a year ago.

In April, the value of new construction starts increased 10 percent from the previous month to a seasonally adjusted annual rate of $698.7 billion, according to Dodge Data & Analytics. The nonresidential building sector came in particularly strong. Meanwhile, residential building slipped in April, and nonbuilding construction lost momentum as the result of a pullback by public works.

The April statistics raised the Dodge Index to 148 (2000=100), compared to 134 in March. For the full year 2014 the Dodge Index averaged 124.

"The presence of unusually large projects in early 2015, particularly several liquefied natural gas terminals and several petrochemical plants, has elevated the level of activity shown by total construction starts beyond the underlying trend,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. "It’s also increased the volatility on a month-to-month basis, with total construction up 16 percent in February, down 13 percent in March, and now up 10 percent in April. Despite these wide swings on a monthly basis, it’s still possible to identify several aspects of how the construction expansion is proceeding in 2015. For nonresidential building, the upturn is broadening in scope, with its institutional segment continuing the upward movement established in 2014. For residential building, single-family housing has shown some improvement yet remains hesitant, while multifamily housing is generally proceeding at a healthy clip.”

Nonresidential building in April jumped 58 percent to $288.9 billion (annual rate). Much of the lift came from the manufacturing plant category, which soared 516 percent, due to an $8.1 billion massive project, which, if excluded, the manufacturing plant category in April would have been down 34 percent, while total nonresidential building would have seen a more moderate increase of 5 percent. The commercial building group in April grew 11 percent, rebounding after a 10 percent decline in March. The office building category surged 50 percent. Store construction in April improved 2 percent; warehouse construction in April climbed 17 percent after a weak March; but hotel construction dropped 23 percent.

The institutional building group in April grew 7 percent, bouncing back after an 8 percent slide in March. Educational facilities increased 9 percent. Healthcare facilities advanced 18 percent after a weak March; and the amusement and recreational category registered a 15 percent gain in April. Losing momentum in April were public buildings (courthouses and detention facilities), down 21 percent; and religious buildings, down 57 percent.

Residential building, at $245.1 billion (annual rate), slipped 3 percent in April. Single-family housing retreated 4 percent following its slight gain in March, still holding to the sluggish performance that took hold at the end of 2013. Multifamily housing in April eased back 2 percent, retreating slightly for the second straight month after a 40 percent surge in February.

The 24 percent increase for total construction starts on an unadjusted basis during the first four months of 2015 was the result of growth for all three major construction sectors. Nonresidential building year-to-date advanced 12 percent, with manufacturing building up 40 percent, institutional building up 8 percent, and commercial building up 2 percent. Residential building year-to-date was also up 12 percent, with multifamily housing up 15 percent and single-family housing up 11 percent.

Useful insight comes from looking at 12-month moving totals, in this case the 12 months ending April 2015 versus the 12 months ending April 2014. On this basis, total construction starts were up 13 percent, as a result of this behavior by major sector: nonresidential building, up 19 percent; residential building, up 11 percent; and nonbuilding construction, up 8 percent.

New-Home Sales Rise 6.8 Percent in April
Sales of newly built, single-family homes rose 6.8 percent to a seasonally adjusted annual rate of 517,000 units in April, according to data released May 26 from HUD and the U.S. Census Bureau.

Regionally, home sales were mixed, rising 36.8 percent in the Midwest and 5.8 percent in the South. The Northeast posted a 5.6 percent decline and the West fell 2.3 percent.

The inventory of new homes for sale edged up to 205,000 units in April. This is a 4.8-month supply at the current sales pace.

2015 National Design-Build Student Competition Mirrors Real World
The Design-Build Institute of America announces its fourth annual National Design-Build Student Competition with a call for student teams. The annual competition closely follows how real-life design-build projects are procured: It’s a two-step competition with teams responding to RFQs, short-listed finalists responding to RFPs and a final in-person presentation at the 2015 Design-Build Conference & Expo in Denver.

This year, to make the competition even more realistic, teams are encouraged to contact other schools to team with them in responding to the RFQ. Because design-build incorporates all facets of the design/construction process, a teaming agreement between construction and architecture schools accurately simulates the common practice of teaming agreements between firms in order to present the most qualified team during a design-build competition. DBIA is providing schools with a teaming agreement template to help facilitate this process.

Registration is now open for eligible student teams. The deadline to register is Sept. 1, 2015. The Student Competition eligibility requires that teams include students who are enrolled in a college-level construction, design or development curriculum. Four of the team members must be undergraduate students, with the option of one team member being a graduate student. For more information visit the DBIA website, www.dbia.org.

In Memoriam: Jerry Screws
AWCI-Colorado has notified AWCI headquarters that Robert Gerald "Jerry” Screws, vice president and safety director of General Connections, Inc.,in Denver, lost his battle to pancreatic cancer June 2. He was 75.

AWCI’s Colorado chapter and AWCI headquarters extend their deepest sympathies to the Screws family.

People in the News
Ceilings Inc., Norristown, Pa, announces the following personnel changes:

After 25 years, Office Administrator Lyn Cavallaro retired July 1.

Melissa Wepryk replaces Cavallaro and has been training under Cavallaro’s guidance for several months.

Euramax North America announces the return of Scott Bacon as the vice president of commercial sales for Fabral, a provider of metal for building envelope solutions. Bacon returns to Fabral after spending four years as the business unit director for Centria’s

MetalWrap™. He previously served Fabral as the vice president and director of sales from 2000 to 2011. Bacon’s new responsibilities include sales and business development execution and customer acquisition and development.

Bacon has more than 29 years of experience in the building products industry, demonstrating in-depth knowledge of the architectural and post-frame markets.

Companies in the News
AMES Taping Tools, headquartered in Stone Mountain, Ga., announces the grand opening of its newest location in Columbus, Ohio.

The addition of the Columbus location brings AMES to 64 corporate stores and 47 franchise locations. Located at 3453 Great Western Blvd., the new store provides rental service for the complete line of AMES’ automatic taping and finishing tools.

Acme Tools announces the planned expansion of its corporate headquarters in Grand Forks, N.D. The project includes a newly constructed addition that will feature a stunning new entrance, executive offices, board room, a large employee training room and a new employee lunch room. New offices, conference rooms and open work areas will also be added as well as remodeling the current corporate offices. The expansion increases the size of the corporate headquarters building to 15,000 square feet.

Acme Tools employees will attend manufacturer training and company training programs in the new 35-person training facility. Specifically designed to provide a unique learning environment for employees, the new training room will integrate advance training technology.

The project also repurposes previous warehouse space to create new parking spaces and new green space.

New on the ’net
ClarkDietrich Building Systems’s iTools Web application is now available in Spanish. ClarkDietrich iTools was developed specifically to help architects and contractors evaluate purchasing decisions and assist in product selection for cold-formed steel framing projects.

ClarkDietrich iTools includes access to the iProSTUD.com interior walls and ceilings design tool. Developed for contractors using the ProSTUD Drywall Framing System, it allows building professionals to view ProSTUD data, calculate ProSTUD limiting heights and email final submittal documents directly from their mobile device. iTools also includes design tools for Shaftwall framing and Structural Stud interior/exterior framing.

For more information, visit www.iTools.clarkdietrich.com.

Alpine, a provider of building component software, metal connector products and equipment for component manufacturers, has launched a new website designed to provide comprehensive product, technical and company information, as well as other useful resources. The new website is accessible at www.alpineitw.com.

The website features many notable enhancements that will enable construction professionals and other visitors to more quickly and easily locate and utilize site content. It also consolidates a wide range of Alpine information that was previously accessible on multiple sites in a single location. In addition, the new website incorporates an easy-to-use search function and fabricator locator.

The website is organized into five main sections: Products, Services, Resources, About Alpine, and News and Events. Visitors can also sign up to receive Alpine newsletters, press releases and updates.

Alpine will continue to maintain its Trussteel.com and Instinct.com sites, and is developing a new site for its Alpine Academy online learning center at www.alpineacademyitw.com.

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