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The Occupational Safety and Health Administration (OSHA) will begin enforcement of the final rule on occupational exposure to beryllium in the construction industry on May 11, 2018. According to a March 2 news release, the enforcement date was previously set for March 12, 2018, but this new timeframe aims to ensure stakeholders are aware of their compliance obligations under the final rule.

OSHA issued a final rule on beryllium exposure on Jan. 9, 2017. The construction industry was included in the final rule in an expansion of the proposed rule, which previously focused on general industry. The final rule points directly to the construction task of abrasive blasting operations that use slags that contain trace amounts of beryllium. More information on the final rule can be found on OSHA’s website.

On June 27, 2017, OSHA issued a proposed rule to revoke the ancillary provisions of the final rule for the construction and shipyard sectors included in the January 2017 final rule, but retain the permissible exposure limit of .2 micrograms per cubic meter of air as an eight-hour weighted average and the short-term exposure limit of 2.0 micrograms per cubic meter of air, which is fifteen minutes. ABC submitted comments on the proposed rule on Aug. 28, 2017, and commented as a member of the Construction Industry Safety Coalition. 

According to the Trump administration’s Spring 2018 Unified Agenda of Regulatory and Deregulatory Actions, OSHA plans to publish a final rule to revoke the ancillary provisions for the construction and shipyard sectors in December 2018. 

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On April 30, Linda McMahon, Administrator for the U.S. Small Business Administration (SBA), recognized numerous small business entrepreneurs, including ABC member Keith Porta, as part of National Small Business Week 2018.

Porta, who serves as managing member for APC Construction, LLC, and chair of the Southern Regional Minority Development Council, was named one of the runners-up for 2018 National Small Business Person of the Year and received the Small Business Person of the Year award for the state of Louisiana.

“These awards are a testament to the dedication and hard work of the men and women of APC Construction LLC, made possible only through their daily contributions to our clients and stakeholders,” Porta said. “As our mission statement communicates, we truly put people and their projects first, and our culture has allowed us to build successful projects throughout the United States and overseas.”  

ABC member company Hensel Phelps Construction was also awarded the Dwight D. Eisenhower Award for Excellence in the construction category. 

More information from National Small Business Week 2018, including the SBA Virtual Conference, can be found here.   

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It’s #TimeToBuild! ABC will be celebrating Infrastructure Week, May 14-21, with an awareness campaign highlighting the critical importance of infrastructure to America’s economic competitiveness, security, job creation and also in the daily lives of every American.

Visit infrastructureweek.org for sharable factoids on America’s infrastructure and information how to participate or plan your own event. Look for daily Infrastructure Week social media posts on ABC National’s social media channels and follow the conversation using the hashtags #ABCMeritShopProud and #TimeToBuild.

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ABC chapters across the country are celebrating Construction Safety Week 2018, May 7-11. These chapters are raising awareness about the importance of safety on construction jobsites by hosting events, sharing resources, holding safety stand-downs and more. Below are a just a few examples of ABC chapters going above and beyond to spread the word:

• ABC Western Michigan is expecting more than 200 tradespeople and several senior MIOSHA officials at a Grand Rapids jobsite managed by Pioneer Construction at its stand-down for fall protection.
• ABC Arizona Builders Alliance is working with highway contractors, subcontractors, the Arizona Division of Occupational Safety and Health and others to promote Safety Week through billboards, highway warning signs, seminars and jobsite events.
• ABC Oklahoma is participating in an OSHA safety stand-down and free fall protection class.
• ABC Keystone is holding a STEP awards dinner to honor member achievements in safety.
• ABC Alabama is holding a chapter safety committee meeting including topical discussions such as heat stress.
• ABC Northern Alabama is hosting a fall protection stand-down and recognizing STEP winners at a safety celebration cookout.

Continue to look out for daily Safety Week social media posts as part of an awareness campaign from ABC National and Construction Executive that highlights ABC member achievements in safety performance and ABC’s commitment to achieving zero-incident jobsites. Visit constructionsafetyweek.com, and keep sharing your event plans by using the hashtags #ABCMeritShopProud and #safetyweek.

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Prices for inputs to construction materials expanded 1.3 percent in April and are 6.4 percent higher than at the same time one year ago, according to an ABC analysis of U.S. Bureau of Labor Statistics data. This represents the largest month-over-month increase in almost three years and the largest year-over-year increase since October 2011. Prices for nonresidential construction inputs increased 1.6 percent on a monthly basis, and are up 6.3 percent year over year. 

“Inflation is becoming more apparent in virtually every corner of the U.S. economy,” said ABC Chief Economist Anirban Basu. “Unemployment recently dipped below 4 percent for the first time since 2000. As of March, there were 6.55 million unfilled job openings and 6.59 million unemployed people. This means that the ratio of unemployed to job openings is roughly 1, implying that wage pressures will continue to build. Initial unemployment claims remain incredibly low while the so-called “quits” ratio is climbing, indicating that more workers feel comfortable quitting their current jobs in pursuit of better ones. 

“Arguably, a number of policies are contributing to these burgeoning inflationary pressures,” said Basu. “Shifting immigration policies are one factor, as are proposed tariffs, including on steel and aluminum. During the past year, iron and steel prices are up nearly 11 percent. The price of softwood lumber, which has been at the center of an ongoing trade dispute with Canada, has risen by about 10 percent. Issues revolving around Iran help explain why oil stands at $71/barrel this morning. Recently enacted tax cuts also represent an explanatory factor; improving economic growth helps drive up prices. Beyond that are issues related to health care, home prices, apartment rents and tuition. 

“Here’s the upshot: The economy and the nonresidential construction marketplace are presently strong,” said Basu. “With the finances of many states and local governments meaningfully improving, including in states as disparate as Connecticut and Utah, the expectation is that infrastructure spending is set to rise. The next two years are shaping up to be solid ones for nonresidential construction firms. However, beyond that, the outlook becomes distinctly murky.  Rising inflationary pressures are beginning to translate into higher borrowing costs. The cost of delivering construction services is also on the rise. At some point, this combination of factors will impede further progress, and may ultimately contribute to the end of the current expansion cycle.”

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Prices for inputs to construction materials expanded 1.3 percent in April and are 6.4 percent higher than at the same time one year ago, according to an ABC analysis of U.S. Bureau of Labor Statistics data. This represents the largest month-over-month increase in almost three years and the largest year-over-year increase since October 2011. Prices for nonresidential construction inputs increased 1.6 percent on a monthly basis, and are up 6.3 percent year over year. 

“Inflation is becoming more apparent in virtually every corner of the U.S. economy,” said ABC Chief Economist Anirban Basu. “Unemployment recently dipped below 4 percent for the first time since 2000. As of March, there were 6.55 million unfilled job openings and 6.59 million unemployed people. This means that the ratio of unemployed to job openings is roughly 1, implying that wage pressures will continue to build. Initial unemployment claims remain incredibly low while the so-called “quits” ratio is climbing, indicating that more workers feel comfortable quitting their current jobs in pursuit of better ones. 

“Arguably, a number of policies are contributing to these burgeoning inflationary pressures,” said Basu. “Shifting immigration policies are one factor, as are proposed tariffs, including on steel and aluminum. During the past year, iron and steel prices are up nearly 11 percent. The price of softwood lumber, which has been at the center of an ongoing trade dispute with Canada, has risen by about 10 percent. Issues revolving around Iran help explain why oil stands at $71/barrel this morning. Recently enacted tax cuts also represent an explanatory factor; improving economic growth helps drive up prices. Beyond that are issues related to health care, home prices, apartment rents and tuition. 

“Here’s the upshot: The economy and the nonresidential construction marketplace are presently strong,” said Basu. “With the finances of many states and local governments meaningfully improving, including in states as disparate as Connecticut and Utah, the expectation is that infrastructure spending is set to rise. The next two years are shaping up to be solid ones for nonresidential construction firms. However, beyond that, the outlook becomes distinctly murky.  Rising inflationary pressures are beginning to translate into higher borrowing costs. The cost of delivering construction services is also on the rise. At some point, this combination of factors will impede further progress, and may ultimately contribute to the end of the current expansion cycle.”

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Based on recently released data from the U.S. Bureau of Labor Statistics, the U.S. construction industry bounced back in April, adding 17,000 net new jobs, according to an analysis by ABC. Last month, initial estimates showed a 15,000 jobs loss, though that has since been revised upward to a loss of 10,000 jobs. During the past year, the construction industry has added 257,000 new jobs, representing a growth rate of 3.7 percent. 

Nonresidential construction employment increased by 9,000 net jobs for the month. Nonresidential specialty trade contractors led the growth, adding 7,300 net jobs, while heavy and civil engineering employment lost 3,400 net jobs in April.

Overall, the construction industry unemployment rate, available only on a non-seasonally adjusted basis, fell 1.1 percentage points to 6.5 percent. While remarkable, it is slightly higher than the 6.3 percent unemployment rate of one year ago. The national unemployment rate, after stagnating at 4.1 percent for several months, finally dipped below the 4 percent mark, settling at 3.9 percent. This is the lowest rate since December 2000.

“Today’s employment report supplies strong confirmation of the ongoing momentum in the U.S. nonresidential construction industry. This is important for a number of reasons,” said ABC Chief Economist Anirban Basu. “First, nonresidential construction spending data has been weak recently, suggesting a possible slowdown in activity despite elevated backlog and other data indicating continued strength. The employment data released today make it highly likely that the nonresidential construction spending data are failing to fully capture the current level of activity. 

“Second, the data indicate continued momentum in private nonresidential construction activity, which has served as the primary source of industry growth,” said Basu. “However, public activity continues to be soft, as reflected in the lost employment in the heavy and civil engineering category last month.  

“The decline in national unemployment to 3.9 percent offers both positive and negative news,” said Basu. “The positive news is that the U.S. economy continues to flourish, creating new opportunities for job seekers. This should help support continued consumer spending growth. However, the dip in unemployment also foretells more inflationary pressure and higher interest rates. Higher borrowing costs make it more difficult to efficiently finance construction projects. To the extent that interest rates are likely to rise further, construction activity can be expected to flatten at some point in the middle and long term.”

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On April 27, the Internal Revenue Service (IRS) issued guidance on providing relief for certain small businesses that wish to claim the Small Business Health Care Tax Credit for 2017 and later years.

According to the IRS website, the Small Business Health Care Tax Credit provides a maximum credit of up to 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers. The credit is available to eligible employers for two consecutive taxable years.

Generally, in order to claim the credit, small employers must enroll in a Small Business Health Options Program plan, according to HealthCare.gov. Additionally, qualified employers must employ fewer than 25 full-time equivalent employees, pay an average wage of less than $51,600 a year and pay at least half of employee health insurance premium costs.

In recognition of 2018 National Small Business Week from April 29 to May 5, the IRS has also hosted daily webcasts that are designed to help small business owners and self-employed individuals handle various common tax situations, including common tax deductions, IRS payment options and information on the Small Business and Self-Employed Tax Center.

Small business owners can find more information on the Small Business Health Care Tax Credit or the 2018 National Small Business Week webcasts on the IRS website.   

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Nonresidential construction spending declined 0.3 percent in March, according to an ABC analysis of U.S. Census Bureau data. Nonresidential spending, which totaled $740.9 billion on a seasonally adjusted, annualized basis, has expanded 2.5 percent on a year-over-year basis. February’s spending estimate was revised roughly $10 billion higher, from $732.8 billion to $742.8 billion, rendering the March decline less meaningful.

Private sector nonresidential construction spending fell 0.4 percent on a monthly basis, but rose 2.2 percent from a year ago. Public sector nonresidential spending remained unchanged in March, but it is up 2.9 percent year-over-year.

“The nonresidential construction spending data emerging from the Census Bureau continue to be a bit at odds with other data characterizing growth in the level of activity,” said ABC’s Chief Economist Anirban Basu. “For instance, first quarter GDP data indicated brisk expansion in nonresidential investment. Data from ABC’s Construction Backlog Indicator, the Architecture Billings Index and other leading industry indicators have also been suggesting ongoing growth. Despite that, private nonresidential construction spending is up by roughly the inflation rate, indicating that the volume of services delivered over the past year has not expanded in real terms.

“That said, most economists who follow the industry presumed that March data would be somewhat soft,” said Basu. “The Northeast and Midwest were impacted by unusually persistent storm activity in March. The same phenomenon impacted March’s employment estimates, which indicated that construction actually lost 15,000 jobs that month. Other weather-sensitive industries, including retail trade, also experienced slow to negative job growth in March.

“The upshot is that CEOs and other construction leaders should remain upbeat regarding near-term prospects despite today’s construction spending report,” said Basu. “Leading indicators, including a host of confidence measures, collectively suggest that business investment will be on the rise during the months ahead. Improved state and local government finances should also support additional nonresidential construction activity.

“At the same time, construction industry leaders must remain wary of a sea of emerging risks to the ongoing economic and construction industry expansions,” said Basu. “Interest rates are on the rise. Materials prices, including those associated with softwood lumber, steel and aluminum, are expanding briskly. Wage pressures continue to build. There are also issues related to America’s expanding national debt, increasingly volatile financial markets, geopolitical uncertainty that has helped to propel fuel prices higher, and lack of transparency regarding America’s infrastructure investment intentions. The challenge for construction CEOs and others, therefore, is to prepare for growing activity in the near-term, but for something potentially rather different two to three years from now.”

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The U.S. economy expanded at an annualized rate of 2.3 percent during the first quarter of 2018, while fixed investment increased at an annualized rate of 4.6 percent according to an ABC analysis of advanced estimate released by the U.S. Bureau of Economic Analysis.

Nonresidential fixed investment expanded at a 6.1 percent annualized rate in the first quarter of 2018. This represents the fifth consecutive quarter in which nonresidential fixed investment increased at a 4.7 percent annualized rate or faster and the eighth consecutive quarter of growth for the segment. All three of the nonresidential subsegments—structures, equipment and intellectual property products—expanded in the first quarter, with investment in structures surging at a 12.3 percent annual rate. The residential segment remained unchanged in the first quarter after increasing by 12.8 percent in the fourth quarter of 2017.

“Today’s GDP report essentially represented good news for U.S. economic momentum along all fronts with one possible exception,” said ABC Chief Economist Anirban Basu. “Most forecasters understood that first quarter GDP would be a bit weaker than the performance registered in prior quarters. This has become a staple of the GDP report, in which a strong fourth quarter, led by significant consumer spending, is followed by a weaker quarter associated with higher household saving rates and paying down of credit card balances. In that context, gross domestic product came in stronger than anticipated.”

“Nonresidential fixed investment represented one of the economy’s primary drivers during the first quarter,” said Basu. “Investment in this category, which encompasses nonresidential construction, rose 6.1 percent on annualized basis after growing 6.8 percent the prior quarter. These data are consistent with the notion that American business remains optimistic regarding near-term economic prospects despite discussions regarding tariffs and trade wars during much of the first quarter of 2018. These data are also consistent with the notion that businesses are spending at least some of their tax savings on expanding their investments into the broader economy.”

“The one possible drawback to today’s surprisingly strong performance relates to inflation and interest rates,” said Basu. “The U.S. economy continues to manifest substantial momentum at a time when full employment has been achieved or soon will be. This will continue to support faster compensation growth, which in turn will help produce higher costs for the provision of construction services. Contractors also continue to report rising materials prices, the result of both faster global economic growth and shifting policies on international trade. For contractors, this suggests that opportunities to bid on new work will remain plentiful, but that it will be difficult to sustain or grow profit margins as various costs continue to trend higher.”

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