Year: 2018

ABC is currently accepting online applications for the ABC National Diversity Excellence Awards. 

ABC is committed to supporting a diverse and fully inclusive industry by recognizing members that display exemplary diversity leadership in their company, workforce, supply chain and community with best-in-class recruitment policies, retention practices, training and mentoring. If this description sounds like your company, we encourage you to apply. Honors are awarded to top performers in several membership categories: associates, general contractors (over $33 million), general contractors (under $33 million), small and emerging contractors, subcontractors and suppliers. 

In addition to recognition during ABC’s National Excellence in Construction^® Awards, winners of the National Diversity Excellence Awards will be acknowledged at the 2019 Diversity & Inclusion Summit and in ABC’s Construction Executive^® magazine and will be invited to serve on ABC’s Diversity Committee. 

Visit diversity.abc.org to view application criteria or to apply now.

Excellence in Disability Inclusion Award Comments Requested
 
The Office of Federal Contract Compliance Programs and the Office of Disability Employment Policy are joining efforts to recognize excellence in contractor compliance practices. The Excellence in Disability Inclusion Award will highlight the successful practices and strategies of contractors that have expanded and improved recruitment, hiring, retention and promotion opportunities for individuals with disabilities. Members who create an inclusive culture by removing barriers and improving the work experience for the disabled are encouraged to submit comments on the new programs by Dec. 4, 2018. Stay tuned for more information on applying for the award.

ABC’s Disability Resource Group is available to provide resources, education and support for members facing a disability. Visit the Diversity Resource Group webpage to contact the Disability Resource Group leader with any questions or inquiries. 

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Dwana Grace and Stacia Brightmon, apprentices from ABC member S&B Engineers and Constructors, attended an event at the White House on Oct. 31 to highlight the Pledge to America’s Workers, which continues to gather commitments from the business community to expand workforce development. 
 
The event was hosted by President Trump, Senior Advisor to the President Ivanka Trump and members of the administration. ABC pledged to educate and develop an additional 500,000 construction professionals through the initiative at a White House event earlier this year.  
 
“Following my career in the Marine Corps, I found myself unemployed, working a bunch of dead-end jobs,” said Brightmon at the event. “I was looking for something more than just a job when I agreed to enter the women’s apprenticeship program at S&B. Not only do I have a job now, I have a career.” 
 
S&B works to attract women to well-paying jobs in the skilled craft professions through its Women’s Training Program. Brightmon is the valedictorian of her pipe fitting class at the Houston-based company.
 
ABC members invest $1.1 billion on workforce development to educate more than 475,000 industry employees annually, and ABC chapters have set up more than 800 apprenticeship, craft training and safety programs across the United States. Yet more than 80 percent of ABC members report they have trouble finding skilled labor, which impacts construction firms of all sizes. 

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The U.S. construction industry added 30,000 net new jobs in October, according to an analysis by ABC of data from the U.S. Bureau of Labor Statistics. 

The industry has added 330,000 net new construction jobs over the past 12 months, a 4.7 percent increase. Additionally, nonresidential construction employment grew by 13,500 net new jobs in October, with job growth split evenly between the heavy and civil engineering subsector (+7,100) and nonresidential specialty trade (+7,500). 

Construction unemployment dropped to 3.6 percent in October, 0.5 percentage points lower than the previous month, and 0.9 percentage points lower on a yearly basis. National unemployment, which reached a 49-year low last month, remained unchanged at 3.7 percent.

“The fact that the U.S. economy is performing well is hardly a secret,” said ABC’s Chief Economist Anirban Basu. “Therefore, today’s employment numbers may not seem especially newsworthy. They confirm in large measure what we already know. We know that many private employers continue to view the current period as a good one for enterprise expansion. We know that household finances are in good shape, which helps support overall economic growth as well as growth in certain sectors, such as hospitality and retail trade. We also know that workers remain in high demand and that for many businesses, the greatest challenge is securing sufficient levels of human capital.

“Still, today’s report supplies some new insight into U.S. economic dynamics,” said Basu. “2018 may very well be remembered as the year that infrastructure investment roared back in America. The September nonresidential construction spending numbers confirmed massive increases on spending related to water supply, flood control and transit over the past year. Today’s employment release reveals that the heavy and civil engineering segment added another 7,100 jobs last month and has added 52,000 jobs over the past 12 months. This is consistent with ongoing growth in spending on public works and is attributable to a number of factors, including rebuilding from catastrophes that have occurred during the past two years. But this is also a reflection of significantly improved state and local government finances as the recovery works through its 10^th year.

“Given elevated backlog, the expectation is that demand for construction workers will remain elevated,” said Basu. “One potential cause for concern is growing evidence that wages have begun to rise much more rapidly of late. That, along with other sources of inflation, can be expected to push interest rates higher, which in turn would ultimately translate into more expensive financing for construction projects and fewer construction starts. But for now, it is all systems go for the U.S. nonresidential construction industry.”

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National nonresidential construction spending fell 0.3 percent in September but remains historically elevated, according to an ABC analysis of U.S. Census Bureau data. Total nonresidential spending stood at $767.1 billion on a seasonally adjusted, annualized rate in September, an increase of 8.9 percent on a year-ago basis.

Note that August’s estimate was revised almost a full percent higher from $762.7 billion to $769.1 billion, the highest level in the history of the series. Private nonresidential spending increased 0.1 percent in September while public nonresidential spending decreased 0.8 percent for the month.

“Virtually no weight should be placed upon the monthly decline in nonresidential construction spending that occurred in September,” said ABC Chief Economist Anirban Basu. “Rather, we should focus on the massive upward revision to August’s spending data. That revision finally aligns construction spending data with statistics on backlog, employment and other indicators of robust nonresidential construction spending. On a year-over-year basis, nonresidential construction is up nearly 9 percent, an impressive performance by any standard.

“Unlike previous instances of rapid construction growth, this one is led by a neatly balanced combination of private and public spending growth,” said Basu. “Among the leading sources of spending growth over the past year are water supply, transportation, lodging and office construction. This is not only consistent with an economy that continues to perform splendidly along multiple dimensions, but also with significantly improved state and local government finances, which has helped to support greater levels of infrastructure spending.

“Given healthy backlog and indications that the economy will continue to manifest momentum into 2019, contractors can expect to remain busy,” said Basu. “The most substantial challenges will continue to be rising workforce and input costs. That said, there are indications of softening business investment, which could serve to weaken U.S. economic growth after what is setting up to be a strong first half of 2019.”

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Estimated September construction unemployment rates fell nationally and in 30 states on a year-over-year basis, according to an analysis of U.S. Bureau of Labor Statistics data released by ABC.

The September 2018 not seasonally adjusted national construction unemployment rate fell 0.6 percent from a year ago to 4.1 percent. At the same time, the construction industry employed 300,000 more workers nationally compared to September 2017, according to BLS statistics.

“Despite the devastation from Hurricane Florence, construction activity remained strong in much of the nation, keeping pressure on the construction labor market,” said Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “The result was lower unemployment rates compared to a year ago in 30 states and higher rates in 16; rates in four states remained unchanged. Further, the country and 20 states posted their lowest September construction unemployment rates on record.”

Because these industry-specific rates are not seasonally adjusted, national and state-level unemployment rates are best evaluated on a year-over-year basis. The monthly movement of the rates still provides some information, although extra care must be used in drawing conclusions from these variations.

The national NSA construction unemployment rate from August to September increased 0.7 percent. Only three states saw lower estimated construction unemployment rates, and the other 47 were up from August.

The Top Five States

The states with the lowest estimated NSA construction unemployment rates in order from lowest to highest were:

1.       Utah, 2.2 percent
2.       North Dakota, 2.3 percent
3.       Georgia, 2.5 percent
4.       Vermont, 2.8 percent
5.       North Carolina, 3 percent

Of these states, North Dakota, Vermont and Utah were in the top five in August.

Utah had the lowest construction unemployment rate in September. This was up from tied with Wyoming for the fourth lowest rate in August based on revised data. Meanwhile, North Dakota slipped from the lowest rate in August to second lowest in September.

Georgia had the third lowest rate in September. This compared to eighth lowest in August and was the state’s lowest September construction unemployment rate on record.

Vermont sank from tied with Idaho for the second lowest rate in August to fourth lowest in September. Nonetheless, it was state’s lowest September construction unemployment rate on record, matching its rate in September 2016 and 2017.

North Carolina, one of three states (along with New Mexico and Missouri) that saw rates fall from August, rose from 21^st lowest (tied with California, Montana and New Hampshire) to fifth lowest in September. It was also the state’s lowest September rate on record.

Idaho, which tied with Vermont for second lowest construction unemployment rate in August based on revised data, dropped to 16^th lowest with a 3.7 percent rate in September.

Wyoming, which tied with Utah for the fourth lowest rate in August, fell to 21^st lowest with a 4 percent rate in September.

The Bottom Five States

The states with the highest estimated NSA construction unemployment rates in order from lowest to highest were:

46.   Hawaii, 5.9 percent
47.   Maine, 6 percent
48.   West Virginia, 6.2 percent
49.   Mississippi, 7.5 percent
50.   Alaska, 10.3 percent

Alaska, Mississippi and West Virginia were also among the bottom five in August.

Alaska had the highest estimated construction unemployment rate in September for the second month in a row. Nevertheless, this was the state’s second lowest September rate since 2002, when it hit 7.9 percent.

Mississippi had the second highest rate in September, the same as in August.

West Virginia had the third highest rate in September, compared to fifth highest in August based on revised data.

Maine had the fourth highest rate in September, compared to the 14^th highest rate in August, tied with Alabama and New Jersey.

Hawaii, which only reports mining and construction employment combined, had the fifth highest rate in September a sharp swing from 18^th lowest in August, tied with Florida and Oklahoma.

New Mexico, which had the third highest construction unemployment rate in August, improved to the 22^nd highest rate in September at 4.3 percent. The state had the second largest year-over-year drop, down 2.4 percent, behind Florida, which posted a 2.7 percent decrease. New Mexico had the largest monthly decline, down 1 percent. It was also the state’s lowest September rate on record.

Louisiana, which had the fourth highest rate in August based on revised data, had the 11^th highest rate in September at 5.2 percent, tied with Illinois and New York. This was the state’s lowest September rate since it reached 4.6 percent in 2007.

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On Oct. 29, ABC announced that Timothy Mongeau has been appointed as director of workforce development.

With more than 15 years of experience designing and implementing construction education programs, Mongeau will spearhead ABC’s workforce development strategies and initiatives at the state and local level. Mongeau will also be tasked with creating new opportunities to increase the pipeline of skilled construction professionals and support workforce public policy efforts.  

“Tim’s breadth of workforce development experience will be a boon to ABC, our chapters and the merit shop construction industry,” said Greg Sizemore, ABC’s vice president of health, safety, environment and workforce development. “With an estimated 500,000 open construction positions in the United States right now, recruiting new people to the construction sector, as well as retaining and upskilling our current workforce, are top priorities. We’re excited about the new ideas Tim will bring to the table to help us fill the skills gap.”

For the past 10 years, Mongeau was the manager of craft development centers with the Zachry Group in San Antonio, Texas. In this role, he designed and implemented a multimillion-dollar craft education center and employee retention program. Previously, he worked for BE&K Construction Company in Birmingham, Alabama, as a training manager.

Active in the merit shop construction community for more than a decade, Mongeau has been a member of ABC and NCCER workforce development and assessment committees, as well as a research committee for the Construction Industry Institute. Mongeau served 11 years active duty and two years in the reserves of the U.S. Navy and has an associate degree in applied science from Kaplan University. He will be based in San Antonio, Texas.

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The U.S. economy expanded at a 3.5 percent annualized rate during the third quarter of 2018, according to an ABC analysis of U.S. Bureau of Economic Analysis data. This represents the first time there have been two consecutive quarters of 3 percent-plus growth since the beginning of 2015.

Despite the broader economic growth, fixed investment inched 0.3 percent lower in the third quarter. Nonresidential fixed investment increased at just a 0.8 percent annualized rate, a stark reversal from the 11.5 percent and 8.7 percent growth observed in the first and second quarters, respectively. Investment in structures plummeted 7.9 percent after increasing by 13.9 percent and 14.5 percent in the previous two quarters.

“While the GDP increased, business investment, including investment in structures, was generally disappointing,” said ABC Chief Economist Anirban Basu. “Today’s GDP release is consistent with other data indicating a recent softening in capital expenditures, which caught many observers by surprise. Coming into the year, the expectation among many was that corporate tax cuts would translate into a lengthy period of rising business investment.

“As always, there are multiple explanations for the observed slowing in capital expenditures,” said Basu. “The first is simply that this represents an inevitable moderation in fixed business investment after the stunning growth in investment registered during the year’s initial two quarters. A second explanation, however, is not nearly as benign. This explanation focuses on both the growing constraints that businesses face due to a lack of trained workers available to work on new equipment, as well as the impact of rising input costs. Corporate earnings are no longer as consistently surprising to the upside, an indication of the impact of rising business costs. It may be that the dislocation created by ongoing trade skirmishes is also inducing certain firms to invest less in equipment and structures.

“If the first explanation is correct, one would expect a bounce back in capital expenditures,” said Basu. “The logic is that the U.S. business community has taken a bit of a breather to digest all of the capital investments undertaken during the first half of 2018. However, the second would indicate economic growth and the pace of hiring to soften in 2019. That obviously would not be a welcome dynamic for America’s construction sector.”

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Last week, ABC government affairs staff traveled to the Grand Canyon state to visit members of the Arizona Builders Alliance. They visited 140 ABA member companies in the Tucson and Phoenix areas, delivering important “get-out-the-vote” information and industry-specific election materials, including the ABC Votes and We Build America websites. 

In the evenings, staff volunteered for Rep. Martha McSally’s campaign, knocking on doors in the greater Phoenix area in support of her bid to represent Arizona in the U.S. Senate. McSally, a Republican, is the U.S. representative from Arizona’s 2nd Congressional District, and is the ABC-endorsed candidate in the Senate race against democratic Rep. Krysten Sinema for the seat of Sen. Jeff Flake, who will be retiring.

Next week, ABC staff will be traveling to Indiana to visit member companies around the state and volunteer on former Rep. Mike Braun’s campaign to unseat the incumbent senator, Democrat Joe Donnelly.

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On Oct. 23, the U.S. Department of Labor issued a proposed rule that would allow small and mid-sized businesses to band together and offer 401(k) plans to their employees through Association Retirement Plans.

According to a DOL news release, the proposal, officially titled “Definition of an ‘Employer’ Under Section 3(5) of ERISA–Association Retirement Plans and Other Multiple Employer Plans,” would allow Association Retirement Plans to be offered by associations of employers in a city, county, state or multi-state metropolitan area or in a particular industry nationwide. Additionally, association plans could be sponsored through Professional Employer Organizations, which are human resource companies that contractually assume certain employment responsibilities for their client employers. 

The proposed rule comes from President Trump’s Executive Order 13847 on “Strengthening Retirement Security in America,” which ordered the U.S. secretary of labor to allow more small and mid-sized businesses to adopt multiple employer plans as a workplace retirement option.

The EO also required the secretary to issue a proposal or guidance on expanding access to MEPs for part-time workers, sole proprietors, working owners and other entrepreneurial workers with non-traditional employer relationships.

The period for public comment on the proposed rule ends Dec. 24, 2018.

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On Oct. 23, the U.S. Departments of Labor, Treasury and Health and Human Services jointly issued a proposed rule, Health Reimbursement Arrangements and Other Account-Based Group Health Plans, that seeks to expand the availability of affordable health insurance for hardworking Americans by increasing the usability of health reimbursement arrangements.

According to a DOL press release, HRAs are designed to give workers and their families greater control over their health care by providing an additional way for their employers to finance quality, affordable health insurance. If finalized, the rule would also provide opportunities for employers, especially small and mid-size employers who currently do not offer coverage or that face large administrative burdens in offering coverage, to finance individually selected health insurance on a tax-preferred basis.

The Department of Treasury estimates that once employers and employees have fully adjusted to the new rule, roughly 800,000 employers will provide HRAs to pay for individual health insurance coverage for more than 10 million employees.

The proposed rule comes at the direction of President Trump’s Executive Order 13813, “Promoting Healthcare Choice and Competition Across the United States,” which asks the secretaries of the treasury, labor and HHS to “consider proposing regulations or revising guidance, to the extent permitted by law and supported by sound policy, to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees and to allow HRAs to be used in conjunction with nongroup coverage.”

The public will have the opportunity to provide feedback on proposed rule. ABC plans to submit comments before the Dec. 28 deadline. 

For more information, read the White House’s fact sheet or visit the DOL Employee Benefits and Security Administration’s website.

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