March 2008More Small Businesses to Seek Additional Credit in 2008, Says Latest Study
More small businesses will seek to increase their loan levels or lines of credit during 2008 according to the latest nationwide Small Business Research Board study released Jan. 16, 2008. Of the more than 450 owners and managers participating in the SBRB study co-sponsored by Business Today magazine, 26.8 percent said they will increase the dollar value of their loan requests or raise the limit on their line of credit in 2008. This is an increase of 3.5 points from the 23.3 percent of the small business that increased their loans or line of credit in 2007.
Within the overall group of participants, 14 percent said they decreased their credit needs during the past 12 months while nearly 40 percent reported their loan amounts were unchanged. Furthermore, 23.2 percent said they had no loans or lines of credit. During 2007, the majority of participants (53.1 percent) in the U.S. poll said they felt that access to credit was "unchanged” from the previous 12 months while 27.1 percent said it was "easier.” Of the remaining respondents, 14.3 percent said they described access to credit as "more difficult” and 5.5 percent indicated that access to credit was "impossible.”
While 26.8 percent will be applying for more credit during the next 12 months, 9.4 percent intend to reduce their credit needs. The remaining 63.7 percent will attempt to hold their credit needs at the current level.
This is the second of a series of 11 SBRB / Business Today reports examining the current state of small business lending relationships and loan needs. The first report clearly indicated that small businesses in the United States were satisfied with their key lenders as 88.4 percent said the fit was "good” or "excellent.” Of the remaining group, 10.1 percent categorized the relationship as "fair” while less than 2 percent said the relationship was either "poor” or their "last resort.” The SBRB / Business Today study also indicated that relationships are lasting longer with more than 78.6 percent reporting they have been with their principal lender at least five years or an increase from the 66.6 percent who said they had been with their previous key resource five years or longer.
Comparatively, slightly more than 21 percent have been with their current primary lender four or fewer years. The report showed 2.3 percent of the small businesses are in their first year with their current lead lender while 5.7 percent said their relationship is in the second year.
Americans Incorrectly Feel Safer from Fire at Home A nationwide survey conducted by the Society of Fire Protection Engineers reveals that 79 percent of Americans feel safer from fires at home than in a public building with an additional nine percent feeling equally safe in both locations.
These results are inconsistent with government statistics that show that home fires outnumber all other building fires by more than three to one. At the same time, most fire deaths and injuries occur in the home. Public buildings are subject to tough fire-safety regulations and inspections, whereas most homes are not.
"Most public buildings and commercial office buildings are much better protected than homes,” says SFPE’s Engineering Program Manager Chris Jelenewicz. "This is because fire protection engineers implement fire-safety strategies and technologies into building the design and construction of commercial buildings.”
Similar results were found in a 2005 survey conducted by SFPE, where 87 percent of Americans believed they were safer from fires at home than in a public building.
"It’s disheartening to see that public perception is not changing,” Jelenewicz says.
In spite of this, SFPE is working hard to increase the awareness of the importance of home fire prevention. Recently, SFPE partnered with Discovery Education to create and release new high school chemistry lessons that teach students about the science of fire—a project that was funded by the Department of Homeland Security. As a result of this project, every high school student in the United States will have the opportunity to better understand the dangers of home fires.” Along with the false sense of security at home, the survey also found that 44 percent of Americans think about the dangers of fire once or twice a year or less.
The survey, commissioned Society of Fire Protection Engineers and conducted in January 2008 by Synovate, polled more than 1,000 American adults. The findings have a margin of error of plus (+) or minus (–) 4 percent.
Revised Evaluation Report Issued
ICC Evaluation Service Inc (ICC-ES) Evaluation Report ESR-1338, sponsored by the Gypsum Association, has been revised and reissued by ICC-ES with an effective date of Dec. 1, 2007. The reissued report supersedes the December 2006 edition and will remain in use for two years.
The new document has been revised to indicate compliance with the 2006 International Building Code and the 2006 International Residential Code. The new edition also reflects a total technical review of the information contained in the report. The report continues to incorporate a reference to the current edition of GA-600, Fire Resistance Design Manual as an acceptable source of fire-resistance and sound-control systems.
"We also modified the report to eliminate reference to the Uniform Building Code,” says Michael Gardner, executive director of the Gypsum Association. "While it was helpful to have the UBC reference information in the document, much of it had become outdated, and its presence was creating contradictions within the report. To avoid possible confusion, we believed it to be best to eliminate the references to the UBC.” Copies of the new report may be obtained from the association Web site at www.gypsum.org.
OSHA Upgrades Its Small Business Assistance Web Site
The U.S. Department of Labor’s Occupational Safety and Health Administration recently unveiled an enhanced Office of Small Business Assistance Web site. The site includes an improved "Safety Pays” eTool and a new Spanish Language Safety link.
The /dcsp/smallbusiness/index.html Web site has been redesigned to highlight categorical pages, or tabs, for easier navigation and data access. The new format showcases focal points, new products and links. The site provides a wide variety of safety and health tools, products, and information for small businesses.
The OSBA Web site features an updated "Safety Pays” eTool to help employers estimate the costs of occupational injuries and illnesses and the estimated impact on a company’s profitability. This web-based application allows businesses to identify the direct and indirect costs of injuries and calculate the sales needed to make up for these losses. Advantages of the "Safety Pays” tool include no downloading; access to updated loss-injury figures; automatic results after entering data in the appropriate fields; and the option to create and print additional forms online.
A new addition to the site, the Spanish Language Safety link, contains useful Spanish-language compliance assistance resources and tools developed by OSHA’s State Consultation programs. The page provides small businesses with access to Spanish-language safety cards, booklets and posters. Visitors may access this link from the Small Business Assistance Web page.
December Construction Unchanged from Prior Month; Annual Construction Start Total for 2007 Slides 11 percent
At a seasonally adjusted annual rate of $518.4 billion, new construction starts in December were essentially unchanged from November, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. Modest declines were reported for nonresidential building and nonbuilding construction, which were offset by a small increase for residential building. For the full year 2007, total construction came in at $611.2 billion, down 11 percent from 2006 and marking the first annual decline for the construction start series since 1991. The weakness reflected the steep correction for housing over the course of 2007—excluding residential building, new construction starts for the full year 2007 advanced 3 percent.
The December statistics produced a reading of 110 for the Dodge Index (2000=100), the same as the revised level for November. The Dodge Index began the year at 137, and then trended downward through 2007 as the steady decline for single-family housing was joined by a pullback for multifamily housing.
For most of 2007, nonresidential building and public works were able to stay close to the elevated pace achieved during 2006. However, during the final two months of the year, both nonresidential building and public works lost momentum, pulling the Dodge Index down even more. At 110, the November and December readings for the Dodge Index were well below the full year 2007 average for the Index at 129.
"Like 2006, the pattern for total construction in 2007 was shaped by the single-family correction, which grew even more pronounced with the turmoil in the financial markets caused by the subprime mortgage meltdown,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The weakness spread over to multifamily housing in 2007, but for much of last year the commercial and institutional structure types held up fairly well, as did public works. The picture began to change for commercial building toward the end of 2007, however, given the slowing economy and tighter lending standards. The continued presence of these factors will contribute to an expected decline for commercial building in 2008. Institutional building may also see some dampening this year, as state fiscal conditions erode. On the plus side, public works should be helped by greater federal funding for transportation projects, as well as the renewed emphasis on infrastructure maintenance.”
Nonresidential building in December slipped 1 percent to $187.7 billion (annual rate). For the commercial structure types, weaker activity was reported for stores and warehouses, each down 5 percent; and hotels, down 18 percent. Office construction grew 5 percent from a weak November, helped by the start of a $136 million office project in Nashville, Tenn. December’s pace for office construction was still 22 percent below what was reported during the first 10 months of the year. Manufacturing plant construction registered a strong 52 percent gain in December, boosted by groundbreaking for a $110 million medical equipment plant in New York, an $85 million ethanol plant in Minnesota and an $80 million automotive plant in Georgia.
For the institutional structure types, December showed growth for schools, up 3 percent; transportation terminals, up 5 percent; and churches, up 24 percent. Declines were reported for public buildings, down 12 percent; healthcare facilities, down 15 percent; and amusement-related projects, down 32 percent.
For 2007 as a whole, nonresidential building climbed 3 percent to $221.0 billion, which followed an 18 percent increase in 2006. Store construction continued to be very strong, rising 11 percent in dollar volume, due to the ongoing expansion efforts of major retailers. Murray noted, "To this point store construction has withstood any downward pull from the weaker housing market, but that’s expected to change in 2008.”
Warehouse construction also increased in 2007, rising 6 percent. Office construction, while down a slight 1 percent, essentially maintained the improved pace established in 2006 when contracting jumped 44 percent.
The top five markets for office construction starts during 2007, in dollar terms, were New York City; Washington, D.C.; Atlanta; Chicago and Charlotte, N.C.
Like offices, the hotel category reported a modest decline for construction starts, down 7 percent, although this followed a 92 percent surge in 2006. Las Vegas, Nev., maintained its top ranking in 2007 as the leading metropolitan area for hotel construction starts, while down from its exceptional 2006 amount. Other markets in the top five for hotel construction in 2007 were Los Angeles, Chicago, Orlando, Fla., and Washington, D.C.
The manufacturing plant category in 2007 grew 15 percent, as the elevated rate of ethanol plant construction continued.
Institutional structures showed mixed behavior in 2007. School construction moved up an additional 4 percent, with college and university construction showing strength. The public buildings category climbed 36 percent, lifted by gains for detention facilities, courthouses and military buildings. After achieving a record high in 2006, healthcare facilities settled back 5 percent. Declines for the full year 2007 were also reported for amusement-related projects, down 9 percent; transportation terminals, down 10 percent; and churches, down 12 percent.
Residential building in December edged up 3 percent to $221.6 billion (annual rate), as a multifamily upturn outweighed a further reduction for single-family housing. Climbing 21 percent relative to a very weak November, multifamily housing was supported by the start of a $196 million condominium tower in Lahaina, Hawaii.
December’s level for multifamily housing was still 16 percent below the average of the first 10 months of the year, supporting the belief that the broad downward trend for multifamily housing is still in progress. Single-family housing in December fell 2 percent, continuing the steady slide for this structure type, which has now shown decreased activity in 11 out of the 12 months of 2007.
The 2007 annual total for residential building was $260.2 billion, down 24 percent from 2006. Single-family housing plunged 26 percent in dollar volume and 30 percent in dwelling units. The regional pattern for single-family housing showed the steepest dollar decline in the South Atlantic, down 32 percent, as this region was weakened especially by a substantial 49 percent drop in Florida. The next largest regional decline for single-family housing was the West, down 28 percent; followed by the Midwest, down 24 percent; the South Central, down 19 percent; and the Northeast, down 17 percent.
Murray indicated, "In 2006 single-family housing was hit hard by the loss of investor-led demand, and in 2007 the negative factors broadened to include sharply diminished mortgage availability and the precarious financial position of housing developers. With the inventory of unsold homes at high levels, further reductions for single-family housing lie ahead.”
Multifamily housing for all of 2007 was down 16 percent in dollar volume and 20 percent in dwelling units. The top five markets for multifamily housing in 2007, in dollar terms, included three with large declines relative to the prior year: New York City, down 31 percent; Los Angeles, down 27 percent; and Miami, down 57 percent. At the same time, two of the top five showed gains relative to 2006: Chicago, up 7 percent; and Las Vegas, up 60 percent.
The weaker construction activity at the national level during 2007 was also present at the regional level. The largest declines for total construction for full year 2007 were reported in the West and South Atlantic, each down 13 percent; followed by the South Central, down 10 percent; the Midwest, down 8 percent; and the Northeast, down 6 percent.
Builders Continue to Reduce New Housing Production in December
Single-family housing starts declined 2.9 percent to a seasonally adjusted annual rate of 794,000 units in December as home builders continued to ratchet down production in an effort to reduce inventories of new homes on the market, according to newly released data from the U.S. Commerce Department. Meanwhile, a sharp reduction in the volatile multifamily sector contributed to an overall 14.2 percent decline in nationwide housing starts for the month to a one million-unit rate, the lowest since May 1991.
"Today’s numbers for single-family housing starts are right on the money in terms of what we’ve been forecasting and what our members have told us in recent surveys,” said Brian Catalde, president of the National Association of Home Builders and a home builder from El Segundo, Calif. "Builders are acting appropriately to manage the number of units coming on the market and help restore better balance to the supply-demand equation.”
"The 14.2 percent decline in overall housing starts in December was due primarily to a 40 percent drop-off in the multifamily sector, which tends to display significant month-to-month volatility,” noted NAHB Chief Economist David Seiders. "On a quarterly basis, multifamily production actually has held up relatively well since the peak in the early part of 2006.”
Multifamily housing starts declined 40.3 percent in December to a seasonally adjusted annual rate of 212,000. However, average multifamily starts for the final quarter of 2007 held at 321,000 units, above the averages for each of the previous three quarters.
Overall permit issuance, which can be an indicator of future building activity, declined 8.1 percent to a seasonally adjusted annual rate of 1.07 million units in December. Single-family permits declined 10.1 percent to a 692,000-unit rate while multifamily permits were down 4.1 percent to 376,000 units.
"Builders pulled fewer new permits and continued to work down their inventories of unused permits toward the end of last year,” Seiders noted. "This is all with an eye to repositioning themselves for later this year, when market conditions should warrant an increase in building activity.”
Regionally, combined single- and multifamily housing starts were down by double digits in the Northeast (down 25.8 percent), Midwest (down 30.8 percent) and West (down 19.6 percent) for the month. The South fared the best, with only a 3.3 percent reduction in overall housing starts. Meanwhile, housing permits were down, by lesser margins, in three out of four regions in December. The Midwest posted a 10.6 percent decline, the South posted a 7.8 percent decline, and the West posted an 11.6 percent decline in overall permits for the month, while the Northeast registered a 1.6 percent increase.
On an annual basis, year-end figures from the Commerce Department indicate that overall housing starts declined 24.8 percent in 2007 to 1.35 million units. Single-family starts were down 28.7 percent for the year to 1.05 million units, while multifamily starts were off by 8.4 percent to 308,000 units. Overall permit issuance for new homes and apartments declined 25.2 percent in 2007 to 1.38 million units, with a 29.4 percent decline on the single-family side to 973,000 units and a 12.5 percent decline on the multifamily side to 403,000 units.
Wallboard Shipment Volume Announced for 2007
According to statistics complied by the Gypsum Association, the United States gypsum board industry shipped a total of 30.184 billion square feet of material during calendar year (January–December) 2007. During the same period, Canadian manufacturers shipped 3.134 billion square feet of material.
People & Companies in the News
Ames Taping Tool Systems, Inc., Atlanta, has named Michael Schaeper as the company’s new president and chief executive officer.
Schaeper brings to Ames more than 20 years of senior executive experience with a successful record as president and chief operating officer of Shoenfeld’s USA, Inc. and president and chief executive officer of Intercontinental Art, Inc. He also has extensive successful experience as senior vice president and chief financial officer of Vista Paint Corporation, an organization that included 50 regional retail store locations across Southern California serving professional painters.
Effective Jan. 3, 2008, Chris Little has been appointed product manager – Building Products for Amico Building Products. In his new role, Little will be instrumental in assuring that Amico building products meet or exceed all industry and building code specifications and customer requirements. Little also will be leading the effort in Amico’s product standardization initiative, as well as coordinate new product development efforts.
Little has worked as an outside sales representative for Amico since September 2004, covering the states of Georgia, South Carolina and North Carolina. He had responsibility for both Building Products and Industrial Products in that area, as well as fabricated products in Georgia.
Michael A. Gardner, executive director of the Gypsum Association, Washington, D.C., has earned the Certified Association Executive™ credential from the American Society of Association Executives. The CAE is the highest professional credential in the association industry. Fewer than 5 percent of all association professionals have earned the CAE.
To be designated as a CAE, an applicant must have a minimum of three years’ experience in nonprofit organization management, complete a minimum of 75 hours of specialized professional development, pass a stringent examination in association management, and pledge to uphold a code of ethics.
Monica Smiley, publisher and CEO of Enterprising Women magazine, has announced that Carol Kimmel Schary of Nathan Kimmel Company, Los Angeles, is a 2008 Enterprising Women of the Year Award Winner. Award winners are recognized in five categories related to their annual sales volume; Schary’s company is in the "over $1 million and up to $5 million in annual revenues” category.
Schary has owned and operated the company since 1996.
The Enterprising Women of the Year Award honors the country’s finest women entrepreneurs and their remarkable success. The award also recognizes winners as leaders who have mentored and given back to other women in business, and have had a profound impact on their communities.
Raxtar, a European passenger and materials hoist manufacturer, has joined forces with Hydro Mobile in order to penetrate the North American market.
Hydro Mobile is a North American manufacturer of mast climbing work platforms and will use its current business infrastructure to distribute the hoists. Raxtar is emerging as the new hoist specialist in Europe and the Middle East and has acquired a reputation of offering reliable, cost-effective and innovative products.
The Steel Framing Alliance, Washington, D.C., announced Jan. 15 that the Cold-Formed Steel Engineers Institute, the technical arm of the SFA, has hired Brian Berger as its new full-time manager. In 2006, CFSEI’s board of directors developed an ambitious agenda with eight key strategies to guide program priorities. In addition to focusing much of his time on implementing these strategic objectives, Berger is also dedicated to enhancing CFSEI’s programs. This includes managing the development and publishing of Technical Notes, something he has been working on since June after being named interim CFSEI manager.
With 10 years of experience in association management, marketing and public affairs, Berger has worked for associations in the adhesives manufacturing and retail industries. As a marketing and public relations consultant, he has also represented a range of clients.
Structus Building Technologies, Bend, Ore., has relaunched both its corporate Web site and LevelLine Web site. The new Structus Web site (www.structus.com) focuses on providing more detailed information regarding the company, its brands and its corporate philosophy. The relaunched LevelLine Web site (www.levelline.com) offers submittal information, an installation video, competitive product analysis and more.
Turner Construction Company’s Dallas office has announced the winners of its 2007 Outstanding Subcontractors of the Year Awards, and two of the winners are member companies of the Association of the Wall and Ceiling Industry. Baker Drywall Dallas, Ltd. won for their renovation work on the Clark Stadium Press Box, and Marek Brothers System, Inc. won for their work on the Two City Place and Wachovia jobs.
Turner holds the annual recognition ceremony to pay special tribute to the firms that have done outstanding jobs on its projects. The selection of potential candidates is based on the subcontractors’ performance in a variety of areas, including preconstruction, managing, engineering, scheduling, expediting, quality of work, safety, relations with others, pricing, cooperation and expertise their particular field.