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August 2015   

Construction Unemployment Falls to Lowest June Level since 2001


Construction employment held steady in June at the highest level in six years, while the number of unemployed workers with construction experience fell to the lowest total since 2001, according to an analysis by the Associated General Contractors of America. AGC officials said that the new data indicates contractors are having a hard time finding enough qualified workers to meet growing demand in many parts of the country.

Construction employment totaled 6,380,000 in June, matching the revised May figure, which was the highest since March 2009, Ken Simonson, AGC chief economist noted. The number of unemployed workers who reported last working in construction totaled 522,000, the lowest amount since 2001. Average weekly hours for construction craft workers and other "production and nonsupervisory employees” rose to 39.9 hours, the highest June level since the series began in 1947.

Overall construction employment was unchanged from May to June but increased by 4.2 percent (259,000 employees) between June 2014 and June 2015, Simonson noted, adding that the growth rate was double the 2.1 percent increase in total nonfarm payroll employment over the past 12 months. Residential (building and specialty trades) construction employment dipped by 2,400 for the month but increased by 127,000 (5.5 percent) over 12 months. Nonresidential (building, specialty trades, and heavy and civil engineering) construction employment rose by 2,700 for the month and 131,800 (3.5 percent) over 12 months.

Over the prior 12 months, job growth had averaged 22,000 per month in the construction sector, the Bureau of Labor Statistics reported.

May Steel Shipments Up 1.2 Percent from April

The American Iron and Steel Institute reported July 10, 2015, that for the month of May 2015, U.S. steel mills shipped 7,175,211 net tons, a 1.2 percent increase from the 7,087,864 net tons shipped in the previous month, April 2015, and a 14.6 percent decrease from the 8,398,976 net tons shipped in May 2014. Shipments year-to-date in 2015 are 36,222,206 net tons, a 10.5 percent decrease vs. 2014 shipments of 40,485,323 net tons for five months.

A comparison of May shipments to the previous month of April shows the following changes: hot rolled sheets, up 4 percent, hot dipped galvanized sheets and strip, up 1 percent and cold rolled sheets, up 0.3 percent.

Growth Slows for ISA Members for Second Straight Month

The June ISA Economic Indicator Report from the Industrial Supply Association indicated that growth slowed for Distributors and Manufacturers for the second month in a row.

The ISA Distributor Index decreased from 64.2 in April to 56.6 in May, while the Manufacturer Index declined from 56.6 in April to 50.7 in May.

"This month’s report marks another slower month for distributors and manufacturers, but the indexes remain in expansion mode,” said Bryon Shafer, general manager of ASG Industrial and chair of ISA’s Strategic Information Committee.

For each index, a reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction. The Indexes have been above 50 percent since December 2012.

May Construction Starts Increase 3 Percent
May 2015 saw a 16 percent increase in the commercial categories as a group and a 10 percent increase in the institutional building categories as a group.

At a seasonally adjusted annual rate of $729.7 billion, new construction starts in May climbed 3 percent compared to April’s already elevated pace, according to Dodge Data & Analytics. The nonbuilding construction sector provided much of the lift, given an exceptionally strong amount reported for the electric power and gas plant category. Residential building showed modest improvement in May, helped by more multifamily housing, while nonresidential building fell sharply from its heightened April volume. During the first five months of 2015, total construction starts on an unadjusted basis were reported at $272.5 billion, up 25 percent from the same period a year ago. If 12 massive projects valued each at $1 billion or greater are excluded, total construction starts on an unadjusted basis would be up a more moderate 10 percent year-to-date.

The May statistics raised the Dodge Index to 154 (2000=100), up from a revised 149 for April. Through the first five months of 2015 the Dodge Index averaged 145, boosted by particularly strong readings in February, April, and May. "The presence of unusually large projects, notably several LNG terminals and several petrochemical plants, continues to lift the volume of total construction starts above its underlying trend,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. "This lift from unusually large projects is expected to become less pronounced as 2015 proceeds, which still leaves total construction starts growing at about a 10 percent clip. Nonresidential building is witnessing a broader expansion this year, with its institutional building segment contributing to the upturn along with the strengthening trend already established for commercial building. Residential building is seeing further growth for multifamily housing although any upward movement by single-family housing remains hesitant. The public works sector has proven to be surprisingly resilient so far in 2015, as states and localities have picked up some of the slack from essentially flat federal funding.

Residential building, at $258.9 billion (annual rate), edged up 2 percent in May. Multifamily housing improved 7 percent, regaining upward momentum after settling back during the previous two months. Murray noted, "Mortgage rates remain very low, with the 30-year fixed rate currently standing at 4.0 percent, but first-time homebuyers have yet to give much if any lift to housing demand as the result of such factors as still tight lending standards, high student debt, and the preference by Millennials to stay with rental units in urban areas.”

Nonresidential building in May fell 28 percent to $208.1 billion (annual rate), pulling back after surging 58 percent in April. The manufacturing building category in April had provided a sizeable boost. The manufacturing building category plunged 94 percent in May relative to its exceptional April amount. If the manufacturing building category is excluded, nonresidential building in April would have advanced a more modest 9 percent, followed by a 12 percent increase in May. The commercial categories as a group increased 16 percent in May: warehouse construction registered a substantial 95 percent hike; hotel construction in May climbed 90 percent after a weak April; store construction in May improved 7 percent; and office construction in May retreated 30.

The institutional building categories as a group increased 10 percent in May: educational facilities, the largest nonresidential building category by dollar volume, grew 8 percent; the healthcare facilities category in May registered a strong 34 percent gain; and the public buildings category in May rose 33 percent. On the negative side, the amusement category in May retreated 4 percent after a strong April. Decreased activity was also reported for church construction, down 6 percent; and transportation terminal work, down 25 percent.

The 25 percent gain for total construction starts on an unadjusted basis for the first five months of 2015 was comprised of growth for all three major construction sectors. Nonbuilding construction year-to-date climbed 70 percent, with electric utilities and gas plants up 434 percent and public works up 11 percent. Residential building year-to date advanced 14 percent, with multifamily housing up 24 percent and single-family housing up 10 percent. Nonresidential building year-to-date increased 8 percent, with manufacturing building up 38 percent, institutional building up 8 percent, and commercial building down 3 percent.

New-Home Sales Reach Seven-Year High
Sales of newly built, single-family homes rose 2.2 percent to a seasonally adjusted annual rate of 546,000 units in May, according to newly data released June 23, 2015, from HUD and the U.S. Census Bureau. This is the highest new-home sales rate since February 2008.

"Our builders are seeing motivated buyers and the release of pent-up housing demand,” said Tom Woods, chairman of the National Association of Home Builders and a home builder from Blue Springs, Mo. "However, builders are facing supply chain challenges, which is affecting the inventory of new homes.”

"This month’s new-home sales report is consistent with other government data and rising builder confidence that indicate a continual recovery of the housing market,” said NAHB Chief Economist David Crowe. "The uptick in existing-home sales bodes well for builders, as it shows that the sellers are able to buy a new home.”

Regionally, home sales were mixed, rising 87.5 percent in the Northeast and 13.1 percent in the West. The Midwest registered a 5.7 percent decline and the West fell 4.3 percent.

The inventory of new homes for sale was 206,000 units in May. This is a 4.5-month supply at the current sales pace.

Housing Starts Readjust in May
Nationwide housing dropped 11.1 percent to a seasonally adjusted annual rate of 1.036 million units in May from an upwardly revised April reading, according to newly data released June 16, 2015, from the U.S. Department of Housing and Urban Development and the Commerce Department. Overall permit issuance rose 11.8 percent to a rate of 1.275 million, the highest level since August 2007.

"The uptick in permits shows our builders are optimistic that more consumers are returning to the housing market,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. "Even with this month’s dip in production, it should be a solid year for home building.”

"After a strong April, some readjustment in housing production in May was expected,” said NAHB Chief Economist David Crowe. "The starts and permits figures for the second quarter of 2015 are shaping up to be stronger than the first. This upward trajectory is in line with the recently released NAHB/Wells Fargo HMI, which found growing builder confidence in the market.”

Both housing sectors posted production declines this month. Single-family housing starts fell 5.4 percent to a seasonally adjusted annual rate of 680,000 in May while multifamily starts dropped 20.2 percent to 356,000 units.

Combined single- and multifamily starts fell in all four regions in May. The Northeast, Midwest, South and West posted respective losses of 26.5 percent, 10.2 percent, 5 percent and 12.5 percent.

Multifamily permits rose 24.9 percent to a rate of 592,000, the highest level in 25 years. Single-family permits increased 2.6 percent to 683,000.

Regionally, the Northeast and Midwest posted respective permit gains of 77.7 percent and 16.3 percent. The South and West fell 3.6 percent and 1.9 percent, respectively.

Fedrizzi to Step Down as USGBC’s CEO at End of 2016
The U.S. Green Building Council announced June 28, 2015, that Rick Fedrizzi, the visionary founder of USGBC and CEO since 2003, will not seek renewal of his contract as USGBC’s CEO at the end of 2016, paving the way for an organizational leadership transition in 2017.

Fedrizzi, a charismatic figure in the world of sustainability, since co-founding USGBC 22 years ago and serving as its volunteer founding chair the first six years, was appointed president and CEO in 2003. In 2009 he also became CEO of the newly created Green Building Certification Institute (now Green Business Certification Inc.). GBCI is a third-party organization, which was initially established to provide credentialing and certification services for LEED, USGBC’s premier rating system. GBCI has recently acquired several other clients, including GRESB, WELL, PEER, SITES and EDGE, among others.

The USGBC board has set up a search committee so that it can move quickly to fill the CEO position.

In Memoriam: John Matsen
John Matsen, a founder of Matsen Ford Design in Waukesha, Wis., died June 30, 2015. He was 66.

Matsen was a long-time member of the AISI and CFSEI and a widely respected structural engineer for over three decades.

People in the News
Roll-Kraft, Mentor, Ohio, announces the addition of Jason Munger to the company’s managing staff. Munger’s position is general manager – operation excellence. He will be responsible for the production and operation of the Roll-Kraft regrind facility in Frankfort, Ill., as well as the company’s newest regrind facility in Houston. He has extensive experience in Lean processes and has previously led two new facility launches, including facility layout, equipment procurement, and hiring and training personnel.

KNIPEX Tools LP, Arlington Heights, Ill., announces Scott James as its new sales manager. In this role, James reports directly to the channel manager. He will manage all sales activities with independent sales representatives who service the industrial, electrical, plumbing and construction wholesalers in KNIPEX’s Southern region of the United States.

Fabral, Lancaster, Pa., announces the expansion of its Eastern Regional sales team with the appointment of Matt Nance as eastern regional sales manager and Gary Brown as Ohio territory manager.

Nance’s new responsibilities include leading the territory managers in the Eastern region to increased levels of customer support and sales growth.

Brown brings several years of experience in the building products industry. Most recently, he worked for Valspar, handling Lowe’s stores in the Ohio market.

Companies in the News
Tremco Group of Beachwood, Ohio, announced July 2, 2015, the acquisition of certain assets of Chemtron Manufacturing Ltd., a Calgary-based manufacturer of construction adhesives, sealants and tapes with annual net sales of approximately $5 million. Terms of the transaction were not disclosed.

The business will operate as Chemtron International, Inc. and will work closely with the Tremco Commercial Sealants & Waterproofing Division (Tremco CS&W), due to synergies between the two businesses. Tremco CS&W supplies integrated building envelope solutions for commercial and residential construction and industrial applications.

The Chemtron product line includes adhesives, caulks, glazing tapes, mastics, sealants and related compounds for the OEM and construction markets. In addition to its headquarters and 52,000-square-foot manufacturing plant in Calgary, Alberta, the company also has a distribution facility in Edmonton, Alberta.

Chemtron Manufacturing Ltd. has been jointly owned by brothers, Glenn and David Molnar. Glenn will join Chemtron International, Inc. as general manager and vice president of sales, and his son, Courtland, will take on the role of product line manager.

Milwaukee Tool will expand its operations in Greenwood, Miss. This, along with other investments to Milwaukee Tool facilities in the state, represents a $35 million investment in Milwaukee’s U.S. manufacturing operations over the last four years. Milwaukee Tool has locations in Greenwood, Olive Branch and Jackson.

Johns Manville, Denver, has been named "Supplier of the Year” for 2015 by Insulate America, Inc., the nation’s largest insulation contractor association. JM is the first company to receive this honor three years in a row, having previously accepted the award in 2013 and 2014. Insulate America’s "Supplier of the Year” award recognizes companies for the overall value they provide to the organization through technical expertise, customer support in the field and lead referrals.

Graco Inc., Minneapolis, has acquired Machine Technologies LLC, a Texas-based manufacturer of mortar pumps and continuous mixers. Machine Technologies’ products will become part of the product portfolio of Graco’s Applied Fluid Technologies Division.

Financial terms of the transaction were not disclosed.

Products in the News
USG, Chicago, has announced nationwide availability of the first and lightest Type X wallboard in the industry, USG Sheetrock® Brand UltraLight Panels Firecode® X. This panel is available in one of two Underwriters Laboratories Inc. (UL) Type Designations (Type ULIX and Type ULX), depending on geography. These panels are the industry’s first lightweight Type X gypsum panel designed for commercial and residential construction.

UL Type ULIX panels are available in the West North Central, Mountain and Pacific regions.

UL Type ULX panels are available in New England and in the Mid-Atlantic, South Atlantic and East Central regions.

ClarkDietrich Building Systems, West Chester, Ohio, has announced that it is the first steel framing manufacturer to receive third party-verified ISO-compliant Environmental Product Declarations for its complete steel product portfolio, including its ProSTUD® and ProSTUD® with DiamondPlus™ Steel Framing Systems.

New on the ’net
For do-it-yourself homeowners who have wanted to install and finish drywall for their home improvement projects but weren’t sure how, National Gypsum, Charlotte, N.C., has produced a simple step-by-step video to make it easier than ever to install and finish drywall. Featuring Anitra Mecadon, design expert and host of DIY Network’s Mega Dens, the video is available at and can be viewed in its entirety or step-by-step.

In the video, Mecadon walks viewers through techniques for measuring, cutting, hanging, taping and finishing drywall and more. She also shares tips to help homeowners avoid costly mistakes and stay safe.

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