Author: admin

ABC Chief Economist Anirban Basu predicts the nonresidential construction sector will remain stable for the second half of 2018, yet warns of a potential economic downturn in 2020, according to a recent mid-year economic outlook published in Construction Executive magazine.

While the strong U.S. economy contributed to a positive forecast, a rapid rise in interest rates and materials prices could cause a dip in construction sector spending, especially given ongoing international trade issues.

“Contractors are becoming more and more concerned about surging materials prices—especially metals,” said Basu. “On a year-over-year basis, iron and steel prices are up 13.5 percent, which not only impacts a contractor’s margins but could potentially diminish demand for construction services overall.”

Prices for inputs to the overall U.S. construction industry expanded 2.2 percent in May, the largest monthly increase in 10 years.  Prices expanded again in June by 0.8 percent and are 9.6 percent higher than at the same time one year ago according to recently released U.S. Bureau of Labor Statistics data.

“And not only are materials getting more expensive, so are the costs of getting materials to jobsites,” said Basu. “Despite record low unemployment in the United States, an overall lack of skilled laborers in the construction sector and downstream markets contributes to the uncertainty.

“From electricians to painters to estimators, industry leaders are growing increasingly concerned about the dearth of skilled construction professionals and how human capital shortages have trickled down the supply chain,” said Basu. “This will not only contribute to increased compensation costs but also increased inflation and higher interest rates, which could potentially hinder both construction and real estate sector growth.”

Read the full mid-year forecast, “2018 Mid-year Economic Outlook: A Time of Growth and Intrigue,” at constructionexec.com.

Powered by WPeMatico

According to an ABC analysis of U.S. Bureau of Labor Statistics data, construction material prices rose another 0.8 percent in June and are 9.6 percent higher than they were at the same time one year ago.

June represents the latest month associated with rapidly rising construction input prices. Nonresidential construction materials prices effectively mirrored overall construction prices by rising 0.9 percent on a month-over-month basis and 9.8 percent on a year-over-year basis.

“In general, this emerging state of affairs is unfavorable,” said ABC Chief Economist Anirban Basu. “Rapidly rising materials prices interfere with economic progress in numerous ways, including by making it less likely that a particular development will move forward. They also increase the cost of delivering government-financed infrastructure, raise costs for final consumers such as homeowners, renters and office tenants, and exacerbate overall inflationary pressures, which serves to push nominal borrowing costs higher.

“Materials prices are up roughly 10 percent in just one year, and certain categories have experienced significant rates of price increase,” said Basu.  “Among these are key inputs that appear to have been impacted by evolving policymaking, including the price of crude petroleum, which is up 49 percent over the past year, iron and steel, which is up nearly 14 percent, and softwood lumber, up 23 percent.

“Some contractors may note the similarities between the current period and the period immediately preceding the onset of the global financial crisis,” said Basu. “Materials prices, for instance, were rising rapidly for much of 2006 and 2007 as the economic expansion that began in 2001 reached its final stages. Today’s data will provide further ammunition for policymakers committed to tightening monetary policy and raising short-term interest rates.

“With no end in sight regarding the ongoing tariff spat between the United States and a number of leading trading partners and with the domestic economy continuing to expand briskly, construction input prices are positioned to increase further going forward, though the current rate of increase appears unsustainable,” said Basu.

Powered by WPeMatico

In front of a nearly sold-out crowd of more than 41,000 people, the 2018 National Craft Champions and the Craft Professional of the Year stood on the Washington Nationals field July 3 and were honored for their hard work as trained craftsmen. The crowd cheered them on while the ABC logo spread across the stadium, showcasing the theme of the night—free enterprise.

Before the game, these ABC guests of honor and their families loaded onto an ABC-branded bus that took them to Nationals Park where they were given all-access passes to the field and were able to watch batting practice. ABC also hosted a gathering in the stadium for the champions, their families and local ABC members.

As spectators filed into the stadium, the champions stood on the field while their names were announced over the speaker, recognizing them and their companies during the pre-game ceremony. Rising to the top of a field of more than 170 craft trainees competing in 15 craft competitions, these outstanding craft trainees aspire to the highest possible expression of excellence in construction. The world-class champions and craft professionals in attendance included:

Devon Ayotte, millwright/industrial maintenance mechanic, from Cianbro, Maine;
Roy Bolton, power line worker, from Cianbro, Maine;
Matthew Bryan, pipefitting, from MIELKE Holdings LLC, Ohio; 
David Anthony Carlton Jr., electrical residential-commercial, from Watson Electrical Construction, North Carolina;
Bryant Hamilton Coffey, fire sprinkler, from Piper Fire Protection, Florida;
Scott Cornell, structural welding, from Cianbro, Maine;
Daniel Fortini, sheet metal, from Alpha Mechanical Inc., California;
Javier Garcia, insulation, from Starcon International, Illinois;
Michael Jensen, HVAC, from Camblin Mechanical Inc., Iowa; 
Jacob Moody, carpentry residential-commercial, from Kraemer Brothers, Wisconsin;
Logan Stephenson, instrumentation fitting, Triad Electric & Controls, Louisiana;
Jared Valence, pipe welding, Pala-Interstate, Louisiana;
Jacob Vitek, electrical commercial-industrial, from Hirsch Electric LLC, Maryland; and
Richard Brown, 2018 Craft Professional of the Year, Gaylor Electric Inc., Indiana.

Following the pre-game ceremony, Javier Garcia threw the first pitch to Nationals’ infielder, Emmanuel Burriss. Bryant Hamilton Coffee delivered the lineup card to the umpires at home plate. Lastly, Matthew Bryan kicked off the game by making the “play ball” announcement before the first inning.

Following the game, the big screen displayed an ABC-branded clock which began the countdown to the night’s Freedom Fireworks while a one-of-a-kind video highlighted the nation’s construction career opportunities.

Photos are available on ABC National’s Flickr page.

The 2019 National Craft Champions, Craft Professional of the Year and Craft Instructor of the Year will be invited to be recognized at Nationals’ stadium during a game next year.

Powered by WPeMatico

On July 10, President Donald Trump nominated Judge Brett M. Kavanaugh to fill the U.S. Supreme Court seat that will be vacated by Justice Anthony Kennedy when he retires on July 31. 

The 53-year-old Kavanaugh, Justice Kennedy’s former law clerk, was appointed by President George W. Bush to the U.S. Court of Appeals for the District of Columbia Circuit in 2006 and has since authored more than 300 opinions. Prior to his appointment, Kavanaugh held various roles in the Bush administration, first as an associate counsel and then senior associate counsel, and later as an assistant to the president and staff secretary.

Kavanaugh will spend the next few months meeting with members of the U.S. Senate and then proceed to confirmation hearings. With a new Supreme Court session convening Oct. 1, the Senate and Trump administration are up against the clock to confirm Kavanaugh to avoid a 4-4 ideological deadlock on future controversial cases. 

Senate Majority Leader Mitch McConnell (R-Ind.) has expressed his desire to move quickly to confirm Kavanaugh ahead of the midterm elections in November. And as Supreme Court nominees now only need a simple majority to be confirmed, Senate Republicans could approve his nomination without help from Democrats if they remain united. 

With Sen. John McCain (R-Ariz.) unable to vote as he continues treatment for cancer, Senate Republicans have no room for error and will likely need all 50 party members to support Kavanaugh’s confirmation. Democrats have ratcheted up their opposition to the likely nominee and all eyes remain on two moderate female Republican Senators, Lisa Murkowski (Ala.) and Susan Collins (Maine), to see if they will break ranks with Senate Republicans. 

In addition, pundits will be watching the three Democrats—Sens. Joe Manchin (W.Va.), Heidi Heitkamp (N.D.) and Joe Donnelly (Ind.)—who supported President Trump’s first Supreme Court nominee, Neil Gorsuch, confirmed by a vote of 54-45 last year. All three face tough reelection battles in red states this November.

Sen. Doug Jones (Ala.) is another Democrat from a deep red state to watch closely. Sen. Tom Carper (Del.), the only Democrat remaining in the Senate who voted for Kavanaugh for his current position as judge for the U.S. Court of Appeals for the District of Columbia Circuit, is not expected to vote for Kavanaugh again. 

In 2013, then Majority Leader Harry Reid (D-Nev.) changed Senate rules on a party-line vote and ended the filibuster on appellate court and executive nominees, a maneuver known as the nuclear option. Under the nuclear option, nominees only needed 51 votes instead of the previous 60 to end a filibuster, which allowed Democrats to pack the D.C. Circuit Court of Appeals and win some favorable rulings on President Obama’s regulatory agenda. In 2017, Senate Majority Leader Mitch McConnell and Senate Republicans expanded the nuclear option to Supreme Court nominees to confirm Judge Gorsuch.

Powered by WPeMatico

The White House celebrated the six-month anniversary of the Tax Cuts and Jobs Act by hosting an event on Friday, June 29. ABC President and CEO Michael Bellaman attended on behalf of the merit shop contracting community, acknowledging the positive effects of the tax code reform. At the event, President Trump took a moment to recognize ABC and several others as significant supporters who helped pass the legislation. 

On June 26, ABC’s Executive Committee met with President Trump, Treasury Secretary Steven Mnuchin and Senior Advisor to the President Ivanka Trump at the White House to discuss the positive economic effects of tax reform as well as regulatory relief and dynamic enhancements to workforce development efforts. The committee shared with the president how ABC members were using the Tax Cuts and Jobs Act savings. 

As a result of the tax reform bill, ABC members have experienced substantial increases in capital and workforce investment, have hired more employees and have given more raises or bonuses, according to a recent poll taken of the ABC Board of Directors. ABC members have felt the direct beneficial impact of this bill as shown by an increase in their paychecks, allowing them to continue to work towards creating jobs and driving growth.

ABC applauds the administration for its leadership in delivering the first comprehensive tax reform in more than 30 years and giving the construction industry a simpler and fairer tax code. The construction industry remains optimistic about the future. The tax reform bill will continue to benefit ABC members and others in the contracting community, leading to economic freedom and global competitiveness. 

Powered by WPeMatico

Nonresidential construction spending inched 0.1 percent higher on a monthly basis in May, according to an ABC analysis of U.S. Census Bureau data. Spending, which totaled $749 billion on a seasonally adjusted annual rate for the month, is up 3 percent from the same time last year.  

Public nonresidential spending increased 0.6 percent for the month and 4.9 percent for the year, while the private sector contracted 0.3 percent for the month but increased 1.8 percent year-over-year. The dip in private sector is spending is largely attributable to a 2.3 percent decrease in manufacturing-related spending. 

“The prediction has been that publicly financed construction spending would rise in America,” said ABC’s Chief Economist Anirban Basu. “The logic of this is rooted in two basic factors. The first is that the ongoing economic expansion, now in its 10th year, has steadily improved fiscal conditions in state and local government.  With more money to spend, more communities are empowered to deal with deferred maintenance and even to expand the capacity of certain key infrastructure, whether roads, mass transit, wastewater treatment plants or water systems.  

“The other factor relates to a political cycle,” said Basu. “Increasingly, policymakers have been making the case—and much of the electorate seems convinced—that stepped-up infrastructure investment is needed. Accordingly, in recent years, 31 states have expanded their transportation funding, including 24 of them by raising state gas taxes. Not surprisingly, public construction spending is higher on month-over-month and year-over-year bases. 

“What has been less clear is whether privately financed construction would continue to rise,” said Basu. “While the economy remains strong, a number of headwinds have formed, particularly concerns regarding tariffs and trade wars. Construction material prices have already begun to surge, in part because of trade disputes involving materials such as softwood lumber, steel and aluminum. This increases project costs without offering developers and their financiers any offsetting commercial benefit.  

“Moreover, fears of a full-blown trade war between the United States and NAFTA partners, the European Union and/or China have likely resulted in some businesses and investors adopting a wait-and-see attitude,” said Basu. “This helps explain the recent dip in construction spending related to manufacturing. With key interest rates, like the prime rate, also on the rise, the motivation to move forward with projects may be waning. Rising borrowing costs make it less likely that a project will satisfy a given investor’s hurdle rate. Rising labor costs contribute further to this calculus.

“The upshot is that contractors would likely be primary beneficiaries of a less precarious policymaking environment,” said Basu. “Businesses, markets, developers and financiers each prefer certainty. They also prefer input costs that aren’t surging. This strongly suggests that, while private construction spending should remain sturdy during the months ahead given healthy backlog and current economic momentum, the outlook for construction spending may be rather different in a few quarters.”      

Powered by WPeMatico

ABC member B.R. Kreider & Son, a family-owned site management, excavating and paving company based in Manheim, Pa., donated a generous $5,000 to the Lebanon County Career and Technology Center. The gift will help fund tuition for students enrolled in the LCCTC’s landscaping, automotive and diesel programs. B.R. Kreider & Son’s President, Brent Kreider, alongside Safety Director, Jason Groff, presented the check to LCCTC on June 27 with hopes to better prepare students for the workplace and benefit both organizations in turn.

“Positive relationships like this result in jobs for students, better prepared workers for the industry and improved career and technical education programs informed by experts in the field,” said the school’s Assistant Director, Matthew Schwenk. Groff plans to serve on the occupational advisory committee for the school’s landscaping program next school year.

Powered by WPeMatico

ABC and access equipment manufacturer JLG Industries Inc. today announced a strategic partnership that will help solve industry challenges with world-class education, training and equipment solutions. The announcement was made by company executives in Washington, D.C., during ABC’s Legislative Week.

“ABC and JLG are committed to continual innovation to ensure ABC members using JLG tools and equipment have what they need to tackle any job—safely and productively,” said Michael D. Bellaman, ABC president and chief executive officer. “In collaboration with ABC members, JLG will receive feedback to further develop state-of-the-art products and training solutions that will help our members develop people, win work and deliver that work safely, ethically and profitably.” 

“Our strategic partnership with ABC will allow us to work closely with the association’s members to further advance the access industry,” said Frank Nerenhausen, president of JLG Industries Inc. “Direct feedback from those who own and operate aerial lifts inspires us to continue the pioneering spirit upon which JLG was founded nearly 50 years ago.”

Powered by WPeMatico

Today, the Occupational Safety and Health Administration sent out a release reminding certain employers that the deadline for submitting their 2017 Form 300A data through OSHA’s Injury Tracking Application is July 1.

Learn which establishments are covered by this requirement and need to provide their 2017 Form 300A data through OSHA’s ITA.

The following information on electronic reporting is available on the Department of Labor’s website:

• Establishments with 250 or more employees in industries covered by the recordkeeping regulation must submit information from their 2017 Form 300A by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2. Note: at the time of this writing, the OSHA website states: “OSHA is not accepting Form 300 and 301 information at this time. OSHA announced that it will issue a notice of proposed rulemaking (NPRM) to reconsider, revise, or remove provisions of the “Improve Tracking of Workplace Injuries and Illnesses” final rule, including the collection of the Forms 300/301 data. The agency is currently drafting that NPRM and will seek comment on those provisions.”

• Establishments with 20-249 employees in certain high-risk industries must submit information from their 2017 Form 300A by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2.
Note: Enforcement of the anti-retaliation provisions of the Improve Tracking of Workplace Injuries and Illnesses final rule went into effect on Dec. 1, 2016.

In 2016, ABC filed a lawsuit against the final rule, which remains pending.
 
More information about the final rule can be found on DOL’s website and the ITA landing page.

This article is intended for informational purposes only and does not constitute legal advice or opinion.

Powered by WPeMatico

More than 500 ABC members came to Washington, D.C., for meetings with top administration and congressional leaders on the issues that impact the merit shop construction industry at both the federal and state levels during Legislative Week 2018. To lead off, ABC’s Executive Committee met with President Trump, Treasury Secretary Steven Mnuchin and Senior Advisor to the President Ivanka Trump at the White House to talk about the positive economic effects of tax reform, regulatory relief and dynamic enhancements to workforce development efforts on June 26. 

Members heard inspiring calls to action from merit shop advocates and an overview of ABC’s legislative objectives for the year ahead during Legislative Day, June 27, followed by speakers from Congress and the administration. Mick Mulvaney, director of Office of Management and Budget, touted the benefits of strong economic growth driven by the administration’s deregulatory agenda and the “resiliency and creativity of ABC members” and other business owners reinvesting in their companies. He pledged to continue making government work more efficiently and shorten the approval process for construction projects as Congress considers the best way to leverage infrastructure spending.  

“Is there anybody in this room who isn’t looking for skilled workers?” Rep. Virginia Foxx (R-N.C.), chairwoman of the Committee on Education and Workforce, asked during her remarks. She encouraged ABC members to keep speaking to policymakers on the need for effective educational programs and thanked them for their support of the PROSPER Act (H.R. 4508), which she introduced to reform the Higher Education Act by opening federal tuition assistance to industry-recognized education programs and by promoting all forms of learning.

Attendees also received the latest updates on the most important congressional races that will have the greatest impact on keeping a merit shop-friendly majority in Congress this November from Josh Kraushaar, political editor of National Journal and frequent political analyst on television and radio. 

Legislative Week also featured the ABC Young Professionals Symposium, where prominent speakers helped attendees understand the ins and outs of lobbying, grass-roots advocacy and making their voice heard at both the local and national levels, and the Free Enterprise Alliance reception, where members networked, got political insights from keynote speaker Bret Baier, Fox News chief political anchor and host of Special Report with Bret Baier, and rallied around the principles of free enterprise in the construction industry. 

ABC’s Legal Conference, which will take place tomorrow, June 28, will update attendees up on the latest developments and insights on employment and labor law and open competition in the industry. Featured speakers include Marvin E. Kaplan, a member of the National Labor Relations Board, and Nicholas C. Geale, deputy solicitor and chief of staff to the secretary, U.S. Department of Labor.  Experts will explain legal and regulatory issues that are confronting the merit shop and share insights on the legal battles that ABC anticipates during the year ahead. Labor attorneys, contractors and ABC chapter presidents and staff will network and share ideas centered around the merit shop philosophy.

Powered by WPeMatico