Number of Improving Housing Markets Nearly Doubles in October
The second edition of the National Association of Home Builders/First American Improving Markets Index, released Oct. 6, shows 23 individual housing markets now qualifying as “improving” under the new gauge’s parameters. This is nearly double the 12 housing markets that made the list last month.
The index reveals metropolitan areas that have shown improvement for at least six months in housing permits, employment and housing prices. The following metro areas were listed in October:
• Alexandria, LA
• Amarillo, TX
• Anchorage, AK
• Bismarck, ND
• Casper, WY
• Fairbanks, AK
• Fayetteville, NC
• Houma, LA
• Iowa City, IA
• Jonesboro, AR
• Kankakee, IL
• McAllen, TX
• Midland, TX
• New Orleans, LA
• Odessa, TX
• Pine Bluff, AR
• Pittsburgh, PA
• Sherman, TX
• Sumter, SC
• Waco, TX
• Waterloo, IA
• Wichita Falls, TX
• Winston-Salem, NC
“Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list,” said National Association of Home Builders Chairman Bob Nielsen, a home builder from Reno, Nev. “This is further evidence that, despite the tough conditions that persist in many cities, pockets of improvement are emerging in local housing markets across the country.”
“While Pittsburgh and New Orleans remain the two largest improving markets, the October IMI is heavily weighted by smaller cities in which energy and agriculture are the primary economic drivers and where the effects of the recession have been less pronounced,” said NAHB Chief Economist David Crowe. “In particular, Texas stands out for its seven entries on the improving markets list.”
Bangor, Maine, was the only area to drop off of the improving markets list in October, due to a decline in local building permits.
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
Visit www.nahb.org/imi for additional data, tables and a list of 2011 future economic release dates.
August Construction Climbs 8 Percent
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.
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, 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, Tenn. Warehouse construction grew 30 percent, with the push coming from the start of a $150 million distribution center in Martinsburg, W. Va., 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, McGraw-Hill reported.
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. 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.
New-Home Sales Decline 2.3 Percent in August
Sales of newly built, single-family homes declined 2.3 percent to a seasonally adjusted annual rate of 295,000 units in August, according to data released Sep. 26 by the U.S. Commerce Department. The decline is from an upwardly revised, 302,000-unit rate in the previous month.
The only region to register an increase in new-home sales in August was the Midwest, where sales rose 8.2 percent. Meanwhile, the Northeast, South and West posted declines of 13.6 percent, 2.4 percent and 6.3 percent, respectively.
The inventory of new homes for sale fell to 162,000 units in August—a new record low. However, due to the slower sales pace, the months’ supply of new homes rose slightly, to 6.6.
Construction Employment Sees Gains in September
Employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported Oct. 7. Construction jobs were among the gains.
Construction employment increased by 26,000 over the month after showing little movement since February. The over-the-month gain was due to employment increases in the nonresidential construction industries, which include heavy and civil construction, BLS reported.
The overall increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August. In September, professional and business services, health care and construction showed job gains. Government employment continued to trend down.
Encouraged by the gains, Secretary of Labor Hilda L. Solis noted, “We’ve now created 2.6 million jobs over 19 consecutive months of private sector growth. The policies this administration has pursued have added jobs back into the economy, but we need them to work faster and on an even bigger scale. We know what works: cutting payroll taxes for workers and businesses, extending unemployment insurance benefits and making smart investments in the American worker. Now is not the time to abandon these proven pro-growth policies.”
“Independent forecasters estimate that the American Jobs Act will create as many as 1.9 million jobs and increase economic growth by as much as two percentage points, if enacted. That’s more than 150,000 additional jobs a month. It’s crucial that this bill gets an up-or-down vote in both the House and Senate. If leaders in Congress refuse to put the bill to a vote, respected forecasters believe we will see lackluster GDP and job growth in 2012. Inaction is not a responsible option for any lawmaker who is serious about putting this country back to work,” Solis noted.
Deadline to Post Employee Rights Notice Extended
The National Labor Relations Board has postponed the implementation date for its new notice-posting rule concerning employee rights by more than two months.
The delay will allow for enhanced education and outreach to employers, particularly those who operate small and medium businesses, NLRB said.
The new effective date of the rule is Jan. 31, 2012.
For further information about jurisdiction and posting requirements, see NLRB’s website page for Frequently Asked Questions (www.nlrb.gov/faq/poster), which is updated as new questions arise. For questions that do not appear on the list, or to arrange for an NLRB presentation on the rule, contact the agency at [email protected] or (866) 667.NLRB.
Dow Building Solutions Invests in Two Research Facilities to Deliver Real-World Data to Building and Construction Industry
Dow Building Solutions, New York, N.Y., announced Oct. 4 two Research and Development test facilities located at the Dow Building Solutions’ North American headquarters in Midland, Mich. The R&D Wall Assembly Research Center and Spray Foam Application Technology Research Facility have been built to test and evaluate insulation, air sealing and weatherization systems in a controlled lab environment in order to provide customers with real-world data of how the products will work together and perform and function in the field.
The Wall Assembly Research Center is a 1,600-square foot wall system research lab that has more than 30 interchangeable wall sections that enables Dow to test various residential and commercial wall systems. It also allows for the testing of exterior wall system components to see how they stand up to outside elements and perform in a cold climate zone. Systems being tested include rigid and spray insulations, exterior cladding and various framing techniques, in all cardinal directions. The Wall Assembly Research Center is wired with a state-of-the-art monitoring system that allows researchers to collect, analyze and process the performance of each of these interchangeable wall systems over extended periods of time.
The second research test facility is a 2,000-square foot spray booth and lab that enables researchers to evaluate the application of new spray foam chemistries and methods. The Spray Foam Application Technology Research Facility was created to test liquid-applied construction solutions and materials, such as spray polyurethane foams and weatherproofing systems, to help better understand how spray products work in both small and large-scale applications while using a variety of application equipment such as refillable cylinders and two-component high-press spray rigs. Beyond testing and gathering data on chemistries and application methodologies, the research facility is also being used to provide education and training on the application and safe handling of these spray foam products that contribute to the creation of a better performing building envelope.
AISI to Develop New Standard for Nonstructural Members
The American Iron and Steel Institute Committee on Framing Standards is developing a new standard for nonstructural members. AISI S220, North American Standard for Cold-Formed Steel Framing – Nonstructural Members, is targeted for completion at the end of 2011 and publication in 2012.
AISI S220 will be applicable to commonly recognized nonstructural members such as wall studs used in interior partition walls. It will also be applicable to other members, as long as they meet the nonstructural definition and limitations.
“Currently, the design and installation requirements for nonstructural members are found in a variety of documents—including the standards for structural members—which could cause confusion among engineers and building officials,” Jay Larson, P.E., F. ASCE, Managing Director, Construction Technical Program, said. “Gathering this information into one standard will allow the steel industry to have a clear understanding of design requirements for members in the nonstructural category, while making it easier for design professionals to specify and building officials to approve steel for building projects.”
AISI’s codes and standards work is conducted under the Construction Market Council of the Steel Market Development Institute, a business unit of AISI, which oversees the industry’s investment in advancing the competitive use of steel by meeting the demands of the marketplace.
For more information on SMDI’s Construction Market program, visit www.smdisteel.org.
Crowe Appointed President and CEO of Saint-Gobain and CertainTeed Corporations
Saint-Gobain, Valley Forge, Pa., has announced the appointment of John Crowe as president and CEO of both Saint-Gobain Corporation (Saint-Gobain’s North American holding company) and CertainTeed Corporation (Saint-Gobain’s largest North American subsidiary).
Crowe took on these two roles effective Sept. 1. As president and CEO of Saint-Gobain Corporation, Crowe acts as Saint-Gobain’s representative in North America, overseeing the company’s North American businesses and chairing the company’s executive committee. In this role, he succeeds Gilles Colas, who will return to Saint-Gobain’s Paris headquarters as senior vice president in charge of global strategic developments.
In addition, Crowe will assume operational responsibility for CertainTeed, following in the footsteps of Peter Dachowski, who retired as president and CEO on Aug. 31 after 35 years of service in a wide variety of senior leadership roles at Saint-Gobain and CertainTeed.
Crowe most recently served as president of Saint-Gobain’s global abrasives business, with responsibility for more than 13,000 employees and 75 manufacturing facilities in 24 countries. For 30 years, he has served in many leadership positions within Saint-Gobain group, including president of the Saint-Gobain Performance Plastics and Saint-Gobain Crystals businesses.
USG Corporation Chairman Foote to Retire; Board Elects Metcalf Chairman
USG Corporation, Chicago, announced Sept. 26 that its chairman, William C. Foote, will retire from the company and its board of directors effective Dec. 1, 2011. The USG board of directors elected James S. Metcalf, USG’s president and chief executive officer, to the additional post of chairman of the board effective upon Foote’s retirement. These changes complete an executive succession plan overseen by Foote and the USG board of directors over the past few years.
Foote has served as USG’s chairman since 1996, after having been elected chief executive officer in 1995 and president in 1994. He has nearly 27 years of service, having joined USG in 1984. The youngest chairman in USG’s 109-year history, Foote successfully led the company through periods of rapid growth, severe economic contraction and a Chapter 11 bankruptcy related to legacy legal liabilities.
Under Foote’s leadership, USG launched a large-scale modernization of its manufacturing operations in the late 1990s that added more than five billion square feet of low-cost wallboard manufacturing capacity. Foote also directed the expansion of USG’s specialty distribution business, L&W Supply Corporation, which now has more than 150 locations.
Foote successfully resolved the company’s legacy asbestos liabilities and led the company through a Chapter 11 restructuring to protect shareholders from a wave of lawsuits. In 2006, USG announced an unprecedented agreement that settled all asbestos personal injury claims against the company, preserved shareholder value and repaid creditors in full—a first in any major asbestos agreement.
Metcalf, who joined the company in 1980 as a trainee, was elected to the USG board of directors in 2008 and became chief executive officer effective Jan. 1, 2011.
In Memoriam: William S. Dietrich II
William S. Dietrich II, chief executive officer and president at Dietrich Industries Inc. from June 1967 to 1997, died Oct. 6 at age 73.
A Pittsburgh native, Dietrich rose to chairman of Dietrich Industries Inc., turning a small family business into the nation’s largest manufacturer of light metal construction framing. In February of this year, ClarkWestern Building Systems and Dietrich Metal Framing joined to form ClarkDietrich Building Systems, which is now the largest manufacturer of steel framing and accessories in the United States.
Dietrich is known for his gifts to the University of Pittsburgh and Carnegie Mellon University; in September alone, his gifts totaled $390 million. According to news reports, a $265 million gift to Carnegie Mellon, announced Sept. 7, was one of the largest in recent years from an individual to a private university, and the largest in the school’s history. On Sept. 22, the University of Pittsburgh announced that Dietrich was giving it $125 million, the single largest gift in that school’s history.
Both gifts were set to begin upon Dietrich’s death and will be administered by a foundation. In both cases, neither school nor Dietrich disclosed if the gifts were stocks, cash or both.
People in the News
Josh Domo has been promoted to eastern regional sales manager for Fomo Products, Inc., Norton, Ohio. Previously Domo held the channel development specialist position at Fomo Products. In his new position, Domo will be working with all market segments within Fomo Products.
Doug Caffoe, vice president of business and market development at Fomo Products, Inc., was recently named as a Visionary in “Smart Business” magazine’s Innovation in Business Awards.
Caffoe, who has been with the company for seven years, has led with his innovative thinking, increased sales, earned new business and helped the company become a key industry leader in low pressure spray polyurethane foam.
California Drywall Company, San Jose, Calif., today announced Oct. 12 the appointment of Bruce Faultner as senior estimator/project manager. Faultner brings more than 21 years of drywall industry experience and returns to California Drywall after spending the past 8 years at Anning-Johnson, where he was estimator/project manager.
At California Drywall, Faultner will be responsible for preparing cost estimates for major projects, from the conceptual estimates through the finalization of bids. He will also be responsible for providing overall project management for these projects from award to close out. Faultner began his drywall career at California Drywall, starting as a stocker/scrapper and working his way up through the company to estimator/project manager.
Companies in the News
Armstrong World Industries, Lancaster, Pa., has named Conn Acoustics Inc. of Newington, Conn., as its 2010 Ceiling Recycler of the Year. During 2010, the acoustical contracting firm recycled more than 1.3 million square feet of ceiling tiles rather than sending them to a landfill.
The Armstrong award recognizes companies and organizations that make significant environmental contributions through their recycling initiatives.
Conn Acoustics began recycling ceiling tiles in 2005 as part of the Armstrong Ceiling Recycling Program. The program, which is the nation’s first and longest running program of its kind, enables commercial building owners to ship ceilings from renovation projects to an Armstrong ceiling plant as an alternative to landfill disposal. Armstrong re-uses the recycled ceiling tiles in the manufacture of new tiles.
Products in the News
CertainTeed Corporation, Valley Forge, Pa., is issuing the industry’s first series of Environmental Product Declarations (EPD®) for ceilings solutions, enabling architects and designers to make the most informed decisions when selecting ceilings products for their customers. Providing scientific information about environmental performance, an EPD offers third-party verification confirming the true sustainability of a product.
CertainTeed partnered with The Green Standard to develop four EPDs covering 19 product families. The EPD evaluates the products on critical environmental issues, such as production process impact, usage of raw materials and recycled content, packaging, health aspects and end of life impact. The Green Standard provides independent verification of the data in accordance with ISO 14025.
