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Construction Trends

New Construction Starts to Rise 2 Percent in 2012, Says McGraw-Hill Construction’s Outlook Midyear Update


McGraw-Hill Construction, part of The McGraw-Hill Companies, released on June 27 its 2012 Dodge Construction Outlook Midyear Update projections, which revise the forecasts provided last October at the firm’s annual Outlook Conference in Washington, D.C. The Outlook Midyear Update predicts that total construction starts for the United States will increase 2 percent this year to $445 billion, up from the $434 billion reported for 2011. While slightly better than the flat performance for 2012 construction starts predicted last fall, the updated forecast still portrays an industry struggling to gain upward momentum.





“The construction industry has yet to move from a hesitant up-and-down pattern to more sustained expansion,” stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “After plunging 23 percent in 2009, new construction starts edged up only 1 percent in 2010 and were unchanged in 2011, so the modest 2 percent increase predicted for 2012 is really more of the same. The backdrop for the construction industry remains the fragile U.S. economy, which continues to see slow employment growth, diminished funding from federal and state governments, and the uncertainty related to the U.S. fiscal stalemate and the European debt crisis. On the plus side, energy costs are now receding, interest rates are very low, and lending standards are beginning to ease for commercial real estate development.” Given these divergent factors, the construction market this year continues to see a mix of pluses and minuses by major sector, as follows:




• Single-family housing in 2012 will advance 21 percent in dollars, corresponding to a 19 percent increase in the number of units to 490,000 (McGraw-Hill Construction Dodge basis). While still at a very low amount, single-family housing for the past year has been able to register small yet steady gains.





• Multifamily housing in 2012 will climb 19 percent in dollars and 18 percent in units, given rising occupancies and rents, which reflect elevated demand from potential homebuyers still reluctant or unable to move ahead with purchasing a single-family home.




• Commercial building in 2012 will grow 10 percent, following the 12 percent gain in 2011. Warehouses and hotels will see the largest percentage increases, joined this year by a moderate gain for stores while office construction sees more privately financed projects but fewer government office buildings.




• The institutional building market in 2012 will fall an additional 10 percent, after sliding 11 percent in 2011. The tough fiscal environment for states and localities continues to dampen school construction, and the uncertain economic environment is restraining healthcare facilities.




• The manufacturing building category in 2012 will retreat 20 percent, following the 75 percent jump in 2011, which featured the start of several unusually large projects.




Copies of the report are available at http://analyticsstore.construction.com/index.php. Additional reports and projections are available from McGraw-Hill Construction Research and Analytics, http://construction.com/market_research.




Construction Employment Stagnates in June as Industry Unemployment Rate Drops to Lowest June Rate Since 2008


Construction employment stalled in June as more former construction workers left the industry, according to an analysis of new federal data released July 6 by the Associated General Contractors of America. The lack of current job openings, along with the departure of experienced workers, suggests a potential skilled-labor shortage may be developing, construction association officials warned.




“Employment in the construction industry has fluctuated within a very narrow range—1 percent above or below the June level of 5.5 million—for more than two years now,” said Ken Simonson, the association’s chief economist. While the latest figure was 14,000 higher than one year earlier, the June 2012 total was just 2,000 higher than in May and in June 2010. “Construction employment has essentially been stagnant for much of the past two years.”




Meanwhile, the unemployment rate for former construction workers fell to 12.8 percent, the lowest June rate since 2008 and much better than the 15.6 percent rate in June 2011 or the 20.1 percent rate in June 2010, Simonson noted. He added that over the past two years nearly 750,000 experienced workers have either found jobs in other industries, returned to school, retired or otherwise left the workforce.




There was little difference among construction segments in terms of recent job gains or losses, Simonson noted. Residential construction added 1,700 total jobs in June and 8,900 (0.4 percent) over 12 months. Nonresidential construction firms lost 600 jobs in June but added 4,300 (0.1 percent) over 12 months.




Within the residential segment, residential specialty trade contractors added 7,600 jobs for the month and 14,100 (1.0 percent) over the past year, reflecting ongoing strength in multifamily construction. In contrast, residential builders—mostly single-family homebuilders—lost 5,900 positions in June and 5,200 (–0.9 percent) over 12 months.




Nonresidential job gains for the year were concentrated among nonresidential building contractors, which lost 1,000 jobs in the latest month but added 4,300 (0.7 percent) over 12 months. Heavy and civil engineering construction firms shed 2,000 jobs in June and 1,800 (–0.2 percent) in the past year. Nonresidential specialty trade contractors boosted employment by 2,400 since May but only 1,800 (0.1 percent) since June 2012.




Association officials noted that one bright spot for the industry was the 27-month highway and transit bill the president is signing into law July 6. They said the legislation includes many significant reforms that will allow more existing transportation funds to be invested in highway and transit construction projects, as opposed to unrelated programs.




New-Home Sales Rise 7.6 Percent in May


Sales of newly built, single-family homes rose 7.6 percent to a seasonally adjusted annual rate of 369,000 units in May, according to data released June 25 by HUD and the U.S. Census Bureau.




Regionally, new-home sales were mixed in May. While the Northeast and South posted solid gains of 36.7 percent and 12.7 percent, respectively, the Midwest and West posted respective declines of 10.6 percent and 3.5 percent.




The inventory of new homes for sale was almost unchanged at a low level of 145,000 units in May, reflecting a historically slim 4.7-month supply at the current sales pace.




WACA Awards Construction Excellence


The Wall And Ceiling Alliance, San Jose, Calif., held its 2nd Annual Construction Excellence Awards ceremony on May 3, 2012 in San Ramon, Calif., where 11 distinguished signatory drywall and plaster contractors were honored for their exceptional wall and ceiling projects.




A panel of certified AIA judges assessed project entries based on a high standard of merit. The 2012 CEA winners are as follows:




Contractor: Anning-Johnson Company



Supplier: Westside Building Material



Category: Retail Exterior



Project: Pleasanton Gateway Retail Shell Building





Contractor: Eric Stark Interiors Supplier: Railway Distributing –
Foundation Building Materials



Category: Retail Interior



Project: Tyco Café





Contractor: O’Donnell Plastering, Inc.


Supplier: Westside Building Material


Category: Commercial Exterior


Project: Middlefield Crossing




Contractor: California Drywall Co.


Supplier: CALPLY


Category: Commercial Interior


Project: Nokia Center of R&D Excellence




Contractor: Ironwood Commercial Builders, Inc.


Supplier: Westside Building Material


Category: Institutional Exterior


Project: Prewett Park Community Facilities


Contractor: The Raymond Group


Supplier: CALPLY


Category: Institutional Interior


Project: SFO Terminal 2 Boarding Area D Renovation




Contractor: O’Donnell Plastering, Inc.


Supplier: A.M.S. (Acoustical Material Services)


Category: Residential Exterior


Project: 4th Street Apartments




Contractor: Daley’s Drywall and Taping, Inc.


Supplier: Railway Distributing – Foundation Building Materials


Category: Residential Interior


Project: Station District Family Housing




Contractor: The Raymond Group


Supplier: CALPLY


Category: Green Project of the Year


Project: SFO Terminal 2 Boarding Area D Renovation




Contractor: Erick Stark Interiors


Supplier: Railway Distributing – Foundation Building Materials


Category: Project of the Year — Under 500,000


Project: Chinese Bible Church




Contractor: The Raymond Group


Supplier: CALPLY


Category: Project of the Year — Over 500,000


Project: SFO Terminal 2 Boarding Area D Renovation




ASTM International Launches Supplier’s Declaration of Conformity


Responding to increasing requests from suppliers and their customers, ASTM International, West Conshohocken, Pa., has developed a new program: Supplier’s Declaration of Conformity. Launched in April 2012, this latest offering is an outgrowth of ASTM’s certification programs.





Supplier’s Declaration of Conformity provides manufacturers, purchasers and consumers with a useful and needed tool. A major benefit to suppliers will be the evidence that they can offer their customers regarding conforming to ASTM test methods. Product test results will be registered with ASTM, and supporting documentation will show the supplier’s registration and acceptance by an independent third party.




Sponsored and administered by ASTM International, the new program is available to any supplier, manufacturer, distributor or private brand owner. In a typical scenario, suppliers having products tested to ASTM test methods will register specific information regarding their products, accredited labs and the ASTM test methods. Once accepted by ASTM, the supplier can provide the documentation or request ASTM to provide documentation to their customers.





Supplier’s Declaration of Conformity conforms to the requirements of ISO/IEC 17050-1 and 17050-2 Conformity Assessment-Supplier’s Declaration of Conformity. The new ASTM program applies to ASTM test methods; it does not apply to ASTM specifications.




For further information on the new ASTM Supplier’s Declaration of Conformity Program, contact Timothy Brooke, vice president of certification, training and proficiency testing at ASTM International at (610) 832.9729 or [email protected], or visit the Supplier’s Declaration of Conformity Web page at www.astm.org/suppliers.




People in the News


Johns Manville, Denver, announces that Dr. Timothy Swales, vice president of corporate research and development, has assumed the additional role of chief sustainability officer. He is responsible for R&D across all of JM’s businesses as well as a continuous focus on the company’s sustainability strategy and achievement of the company’s sustainability goals.





Products in the News


Armstrong has issued Environmental Product Declarations for nine of its ceiling and suspension systems: Tierra™, Optima®, Ultima®, Ultima® Ceiling-2-Ceiling, Cirrus® and Mesa™ plus standard product families, Dune™, Fine Fissured™ and Cortega®.




An EPD is a standardized, internationally recognized, comprehensive tool for providing information on a product’s environmental impact. Information in the document is based on an ISO-compliant Life Cycle Assessment and verified by a third party.




EPDs are issued within clearly defined product groups based on product category rules. Armstrong has published EPDs for high performance mineral fiber, fiberglass and BioAcoustic™ fiber, as well as standard mineral fiber families.




To help end users better understand the new documentation, Armstrong has prepared a short video that takes a quick look at LCAs and EPDs. The video is a unique look at what can often prove to be a confusing subject. It can be viewed at www.armstrong.com/epd.




Armstrong has also prepared a new, free, online CEU titled “Life Cycle Assessments and Environmental Product Declarations: The Next Level of Transparency.”




Completion of the course qualifies for one continuing education hour toward the USGBC Green Building Certification Institute’s Credential Maintenance program. The course also provides a continuing education unit by the American Institute of Architects. To access the new CEU, visit armstrong.com/CEU.




For additional information about Armstrong EPDs, visit armstrong.com/epd.





Paslode, Vernon Hills, Ill., announced that its TetraGrip™ Subfloor Fastening System is the first fastening system to achieve a “No Nail Squeak” certification from the National Association of Homebuilders Research Center.





To test the performance of Paslode’s TetraGrip™ Subfloor Fastening system, the NAHB Research Center developed criteria and a testing method for determining if a fastener will squeak or not, based on the average decibel (dBA) net value (measured sound level during testing less background sound level). The criteria mandates that the average dBA net value of all test runs must not exceed 3dBA and no individual test may exceed 5dBA.





New on the ’Net



Wind-lock, Leesport, Pa., announces its new mobile website, which is compatible with all mobile devices. Visit Wind-lock’s mobile website today by going to www.wind-lock.com on your mobile device’s Web browser.





What’s App, Doc?



Engineering News-Record, part of McGraw-Hill Construction, has launched the new ENR Mobile News app, available at the iTunes App Store (http://bit.ly/enr-itunes) and Google Play (http://bit.ly/enr-Droid). The app provides award-winning news, photos and videos that help construction industry professionals excel in their roles and make informed decisions about their businesses and business strategy. Users will also be able to connect to Twitter directly from the app, and will be able to participate in polls.

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