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The U.S. construction industry lost 15,000 jobs on net in March, according to an ABC analysis of data from the U.S. Bureau of Labor Statistics (BLS). This represents a significant reversal from February, when the industry added a post-recession high of 65,000 net new jobs (upwardly revised from +61,000). The construction sector has added 228,000 net new jobs over the past twelve months, which represents a substantial 3.3 percent increase in the number of workers directly employed by the industry.

The nonresidential construction segment lost 8,200 jobs on net in March. While the nonresidential building segment expanded by 2,200 net new jobs in March, nonresidential specialty trade contractors collectively reduced the employment tally by 6,800 positions, and the heavy and civil engineering segment lost 3,600 jobs.

The construction industry unemployment rate, which is available only on a nonseasonally adjusted basis, declined by 0.4 percentage points and stands at 7.4 percent, 1 percentage point lower than at the same time last year. The national unemployment rate for all industries remained unchanged at 4.1 percent for a sixth consecutive month.

“Every employment report is important. Each time the BLS announces new data regarding employment and unemployment, global stock and bond markets move,” said ABC Chief Economist Anirban Basu. “In recent months, we have been watching for indications of either economic slowing in the form of weaker job creation or overheating or in the form of increasingly rapid worker earnings growth. Today’s jobs report however, is being considered largely in the context of an emerging threat to the economic expansion—a trade war with China.

“The hope had been that the job report today would be strong, indicating that the U.S. economy possesses sufficient momentum to steer through a short, highly symbolic trade war,” said Basu. “Instead, the jobs report was weak, with nonfarm industry payrolls rising by a disappointing 103,000 net new positions. Still, the unemployment rate remained at a low 4.1 percent, which means that the report wasn’t purely negative. Moreover, one month of data tends to be inconclusive regarding the direction of large-scale macroeconomic trends by definition.

“Nonetheless, today’s numbers cannot simply be ignored,” said Basu. “The weak jobs report increases the probability that uncertainty attributable to policy pronouncements emerging from Washington and Beijing can trip up an economic expansion that should be proceeding swimmingly in the context of recently enacted tax reform. For construction firms in particular, the changing news cycle is not helpful. Those who finance construction projects need to be comfortable with the notion that the economy will still be supportive once construction is complete. In other words, the construction industry requires a higher level of stable, persistent confidence to support growth than other industries given the risk that accompanies financing projects and time to build. Confidence is likely dissipating presently.”

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On April 3, the U.S. Department of Labor’s Wage and Hour Division (WHD) launched the Payroll Audit Independent Determination (PAID) program, a new nationwide pilot program to assist employers in expediting the resolution of inadvertent overtime and minimum wage violations under the Fair Labor Standards Act. The pilot program will be implemented for approximately six months nationwide. Following that, the WHD will evaluate the effectiveness of the program and consider different options for moving forward.

According to the DOL website, “under the PAID program, employers are encouraged to conduct audits and, if they discover overtime or minimum wage violations, to self-report those violations. Employers may then work in good faith with WHD to correct their mistakes and to quickly provide 100 percent of the back wages due to their affected employees.” To learn more about the pilot program and who can participate, click here. 

On April 10 from 1 to 2 p.m. EST, DOL will offer a webinar on the new PAID program. Attendees will learn about how the program works and have the opportunity to ask questions following the presentation. Register for the DOL webinar here.  

For more information, visit the DOL’s PAID website.

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On March 19, 2018, the U.S. Department of Commerce began accepting exclusion requests from U.S. industry for the recently announced tariffs on steel and aluminum product imports. According to the notice published in the Federal Register, “individuals or organizations using steel or aluminum articles identified in presidential proclamations 9704 and 9705 and engaged in business activities in the United States may submit exclusion requests.” 

The forms for submitting steel and aluminum exclusion requests and additional information on the exclusion process are available online. Exclusion requests will be available for public review for 30 days, and an additional 60 days will be required to complete the review. 

The White House also issued a proclamation formalizing additional country exceptions from steel and aluminum tariffs. The proclamation suspends the 25 percent tariff on steel and aluminum imports of products from identified countries until 12:01 eastern daylight time on May 1, 2018. The temporary suspension applies to imports of products from Canada, Mexico, Australia, Argentina, South Korea, Brazil and the member countries of the European Union. 

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The U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) released several videos that will assist employers with complying with the requirements under the Fair Labor Standards Act (FLSA).

According to a DOL news release, the five compliance videos, titled “Watch and Learn – FLSA Compliance Videos,” provide brief, plain-language explanations of FLSA requirements and the basic information needed to understand and comply with the law. 

The video topics include coverage under the FLSA, minimum wage requirements and information on deductions, hours worked and overtime compensation.

For additional information on FLSA requirements and compliance, visit the WHD’s Reference Guide to the FLSA. 

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The February 2018 not seasonally adjusted (NSA) national construction unemployment rate was 7.8 percent, down 1 percent from February 2017 and the lowest national February rate on record, according to an analysis of U.S. Bureau of Labor Statistics (BLS) data released by ABC. Estimated construction unemployment rates were down in 34 states on a year-over-year basis, unchanged in one state (Arizona) and up in 15 states.

At the same time, the construction industry employed 273,000 more workers than in February 2017.

“Construction activity continues to be positive in much of the country, resulting in healthy demand for construction workers,” said Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Above-average February temperatures over much of the eastern part of the country, along with below-normal precipitation rates among several southeast and western states, were likely contributing factors to the industry’s good February performance. The shortage of skilled construction workers continues to be a significant drag on construction activity. However, recent building materials price increases, particularly for steel and aluminum, pose an additional, serious threat to future construction activity.”

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.

From the beginning of the data series in January 2000 through February 2017, the national NSA construction unemployment rate from January to February has increased 11 times, decreased six times and been unchanged once (February 2003). The rate for February 2018 adds another reading to the increase side, up 0.5 percent. Among the states, 32 were up, 16 were down and two (Connecticut and Oklahoma) were unchanged from January.

The Top Five States

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

1.      Idaho, 4.1 percent

2.      Colorado, 4.3 percent

3.      Hawaii, 4.6 percent

4.      Virginia, 4.8 percent

5.      Louisiana, 4.9 percent

Two of the top states were in the top five in January: Hawaii and Virginia.

Idaho posted the number-one ranking, up from tied with California for tenth lowest rate in January. It was the state’s lowest February rate since the beginning of the estimates in 2000. Further, Idaho tied with North Dakota for the second largest monthly decline, down 1.9 percent.

Colorado had the second lowest February rate. That was an improvement from seventh lowest in January based on revised data (previously reported as tied with Georgia, South Carolina and Utah for the fourth lowest rate). This was the state’s lowest February estimated rate since its 4.2 percent rate in 2000 and therefore its second lowest February rate on record.

Hawaii had the third lowest February construction unemployment rate, a decline in its ranking from tied with Texas for second lowest in January based on revised data (previously reported as the lowest rate). It was the state’s lowest February rate on record, matching its February 2006 rate. Note that Hawaii’s unemployment rate is a rate for construction, mining and logging combined. The data to estimate a construction unemployment rate alone are not available for Hawaii or Delaware.

Virginia posted the fourth lowest rate in February. That was down from the lowest rate in January based on revised data (previously reported as the second lowest rate). It was the Virginia’s lowest estimated February rate since its 4.5 percent rate in February 2006.

Louisiana had the fifth lowest February rate, jumping from tied with Maryland for the 21^st lowest rate in January. It was the state’s second lowest estimated February rate on record behind its 4.1 percent rate in February 2006. Along with Alabama, Louisiana had the second largest year-over-year decrease in its rate, down 1.4 percent. Further, the state had the largest monthly decline in its rate, down 2.3 percent.

Texas, which tied with Hawaii for the second lowest rate in January based on revised data (previously reported as third lowest rate), dropped to seventh lowest in February, 5.7 percent.

Georgia, which along with South Carolina and Utah tied for the fourth lowest rate in January, fell to sixth lowest in February, with a 5.4 percent rate. Nonetheless, it was the Georgia’s lowest estimated February rate on record. 

Meanwhile, South Carolina fell to the 14^th lowest rate in February, tied with Mississippi, at 6.7 percent. Still, it was South Carolina’s second lowest February rate on record after last year’s 6.1 percent rate, matching the 2016 rate. Utah, with a 5.8 percent rate in February, dropped to eighth lowest, tied with Florida.

The Bottom Five States

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

46.   Pennsylvania, 12.6 percent

47.   West Virginia, 14 percent

48.   Montana, 15 percent

49.   Rhode Island, 17.2 percent

50.   Alaska, 25.9 percent

Four of these states—Alaska, Montana, Rhode Island and West Virginia—were also among the bottom five states in January.

For the seventh consecutive month, Alaska had the highest rate in the nation. Given that these estimates are not seasonally adjusted, a high construction unemployment rate for the state at this time of year is to be expected. This February was particularly brutal for Alaska as the state posted both the largest year-over-year increase in its rate, up 5.1 percent, and the largest monthly increase in the country, up 6.4 percent.

Rhode Island had the second highest rate in February, compared to the third highest in January. The state posted the third largest year-over-year increase in its construction unemployment rate, up 2 percent, and the second largest monthly increase in the country, up 3.5 percent.

Montana had the third highest estimated NSA construction unemployment rate in February, compared to fourth highest in January. The state had the second highest year-over-year increase in its rate, up 3.9 percent.

West Virginia had the fourth highest construction unemployment rate in February, compared to second highest in January. This was the state’s lowest February rate on record, matching its February 2013 rate.

Pennsylvania had the fifth highest rate in February, compared to the seventh highest rate in January. This was the state’s second lowest February rate on record, behind its 9.7 percent rate in 2006.

Illinois, which had the fifth highest rate in January, tied with Connecticut and New Mexico for the sixth highest rate in February with a 12.2 percent rate. This was Illinois’ second lowest February rate behind its 11.7 percent rate in 2006.

To better understand the basis for calculating unemployment rates and what they measure, see the article Background on State Construction Unemployment Rates.

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Nonresidential construction spending inched 0.1 percent higher in February, according to an ABC analysis of U.S. Census Bureau data. Nonresidential spending, which totaled $732.8 billion on a seasonally adjusted, annualized basis, has expanded 1.3 percent since February 2017.

Private sector nonresidential construction spending increased 1.5 percent on a monthly basis and 1.1 percent on a yearly basis, while public sector nonresidential spending fell 2.2 percent for month. Public-dominated segments like conservation and development (-16.4 percent) and public safety (-5.7 percent) experienced especially steep declines in February.

“Construction spending growth tends to reflect the degree to which new project starts exceed project conclusions,” said ABC’s Chief Economist Anirban Basu. “In a healthy economy, the expectation is that there will be considerable numbers of project starts and that, as a result, construction spending growth will be vigorous. The economy is certainly healthy judging from a wave of leading indicators, including measures of confidence, employment, new orders and gross domestic product.

“Despite that, nonresidential spending growth remains tepid. Reasons for this trend include capacity constraints that continue to beleaguer contractors struggling to find enough skilled construction tradespeople, estimators and project managers,” said Basu. “But that’s only where the issues facing construction firms and the people who use their services begin. There are also rising interest rates and borrowing costs. 

“Concerns regarding rising materials prices are also becoming more intense, particularly in light of the recent enactment of tariffs on steel and aluminum and growing fears of a trade war and materials shortages. Softwood lumber prices, which have been impacted by an ongoing trade dispute with Canada, were up nearly 16 percent over a recent 12-month period. On top of all of this is sporadic growth in public construction spending as government monies continue to be siphoned away to finance underfunded pensions, Medicaid and other public priorities.

“The expectation remains that 2018 will be a solid year for construction spending growth. However, there are a growing number of headwinds, even in the context of a reasonably strong domestic economy,” said Basu. “Elected officials could help support construction spending momentum by reducing the level of uncertainty now emerging from the policymaking environment.  Obviously, passage and implementation of the long-awaited federal infrastructure package also would help.”

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ABC released its 2018 Safety Performance Report to further the construction industry’s understanding of how to make jobsites safer through its Safety Performance Evaluation Process (STEP). Packed with infographics and practical takeaways, the report documents the dramatic impact of using proactive safety practices to reduce recordable incidents by up to 85 percent, making the best-performing companies 670 percent safer than the industry average.

“ABC’s fourth annual report on the use of leading indicators, such as substance abuse programs and new hire safety orientations, confirms that high-performing ABC members have safer construction jobsites,” said Greg Sizemore, ABC vice president of HSE & workforce development. “This is one of the few studies of commercial and industrial construction firms doing real work on real projects, and it shows that implementing best practices can produce world-class construction safety programs.”

The Safety Performance Report is based on data gathered from ABC member companies recording more than one billion hours of work in construction, heavy construction, civil engineering and specialty trades. It tracked 35 data points from ABC’s 2017 STEP participants to determine the correlation between implementing leading indicator use and lagging indicator performance, which is measured by the Total Recordable Incident Rate (TRIR) and Days Away and Restricted or Transferred (DART) rate. Each of the data points was sorted using a statistically valid methodology developed by the U.S. Bureau of Labor Statistics (BLS) for its annual Occupational Injuries and Illnesses Survey, and then combined to produce analyses of STEP participant performance against BLS industry average incidence rates.

Among the findings:

·       Companies that attained the highest level of STEP participation—Diamond—reduced their TRIR by 85 percent compared to the BLS industry average of three injuries/fatalities per 100 full-time employees.

·       STEP participants with a robust substance abuse program/policy in place dramatically outperformed those with a weaker program, reducing their TRIR by 63 percent.

·       Conducting a new hire safety orientation lasting more than 200 minutes reduced TRIR by 85 percent compared to the BLS industry average.

·       Companies that held site-specific safety orientations reduced their TRIR by one-half.

·       Holding daily toolbox talks (brief, single-topic training sessions conducted on the jobsite for all employees) reduced TRIR by 62 percent versus holding them weekly.

·       Firms that scored high for C-suite leadership engagement reduced their TRIR by 70 percent.

STEP was founded in 1989 by the ABC National Environment, Health & Safety Committee as a safety benchmarking and improvement tool. Participating ABC member firms measure their safety processes and policies on 20 key components through a detailed questionnaire with the goal of implementing or enhancing safety programs that reduce jobsite incidence rates. Applying world-class processes dramatically improves safety performance among participants regardless of company size or type of work.

Read the report at abc.org/spr.

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On March 20, Administrator Linda McMahon of the U.S. Small Business Administration announced the 2018 recipients of the National Small Business Week awards, including ABC member Hensel Phelps Construction Co.

Hensel Phelps was awarded the Dwight D. Eisenhower Award for Excellence, which recognizes large prime contractors that have excelled in their utilization of small businesses as suppliers and subcontractors. Hensel Phelps, which has previously won this award in 2010 and 2014, received the award for the construction category.

Brad Lewis, corporate director of supplier diversity for Hensel Phelps, said he was both grateful for the recognition from SBA and for Hensel Phelps’ creativity and innovation in their approach to small-business enhancement.  

“Our initiatives and plans are geared towards true small-business capacity building and capability enrichment,” he said. “They are the future large businesses of the industry. We want to support their growth and build a lasting relationship.”

All awardees have been invited to Washington, D.C. to participate in events and ceremonies during SBA’s 2018 National Small Business Week, which will be held April 29 to May 5.

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ABC announced ACI Mechanical as its Contractor of the Year, National Diversity Excellence Award winners, National Safety Award winners and America’s top construction projects at the annual Excellence in Construction^® Awards on March 21 at ABC Convention 2018.

Contractor of the Year

ACI Mechanical Inc., Ames, Iowa, has been named ABC’s 2017 Contractor of the Year, an award that recognizes companies for their corporate integrity, commitment to safety, professional development and expert craftsmanship. President Mike McCoy accepted the honor at the 28th annual Excellence in Construction^® Awards.

ACI Mechanical’s team of engineers, project managers, skilled welders, pipefitters, sheet metal mechanics, service technicians and support staff is led by the executive team of President Mike McCoy, Director of Project Management Kent Meyn, Director of Engineering Greg Braga, Prefabrication Manager Shon Smith, Production and Training Manager Chris Kayser and Human Resources Coordinator Laura Sundine. As a founding member of ABC’s Iowa Chapter, ACI Mechanical’s executives also have served as chairmen and board members at the chapter and national levels, while encouraging local and national political engagement to support important merit shop candidates and causes.

With a solid safety record and an experience modification rate (EMR) under .65 for more than five years, ACI Mechanical has received dozens of industry safety awards through its commitment to ABC’s STEP program. The company also sets itself apart as an early adopter of prefabrication, BIM and 3D technology for enhanced jobsite communication and visualization, leading to efficient project delivery and a top reputation among clients. It is a three-time recipient of the chapter’s EIC Project of the Year Award and a frequent finalist and award winner on the national EIC level.

America’s Top Construction Projects

ABC honored more than 100 projects collectively worth $2.6 billion at the 28th annual Excellence in Construction^® Awards.

The Excellence in Construction awards program is the industry’s leading competition that honors both general and specialty contractors for innovative and high-quality merit shop construction projects. The award honors all construction team members, including the contractor, owner, architect and engineer. The winning projects, selected from entries submitted from across the nation, were judged on complexity, attractiveness, unique challenges overcome, completion time, workmanship, innovation, safety and cost. A panel of industry experts served as the competition’s judges. 

A full list of Excellence in Construction Award winners is available on ABC’s website.

National Diversity Excellence Awards

ABC awarded National Diversity Excellence Awards to six member companies. Representatives from each company received the award at ABC’s 28th annual Excellence in Construction^® Awards. 

The ABC National Diversity Excellence Awards program recognizes members that display exemplary diversity leadership in their workforce, supply chain and community with best-in-class recruitment policies, retention practices, and training and mentoring programs.

Awards were presented in six categories:

• General Contractor (Over $33 million): Hensel Phelps Construction Co., Chantilly, Va.
• General Contractor (Under $33 million): Cherokee Enterprises Inc., Miami Lakes, Fla.
• Small and Emerging Contractor: govSolutions Inc., Virginia Beach, Va.
• Subcontractor: SME Inc. of Seattle, Seattle, Wa.
• Associate: Atkinson, Andelson, Loya, Ruud & Romo, Cerritos, Calif.        
• Supplier: United Rentals Inc., Stamford, Conn.

A full list of Excellence in Construction award winners is available on ABC’s website. To learn more about ABC’s diversity programs visit abc.org/diversity.

National Safety Awards

ABC announced the winners of the 2017 National Safety Awards during the 28th annual Excellence in Construction^® Awards. A total of 56 ABC member companies were recognized for their safety performance. 

The 2017 National Safety Awards were selected from ABC member firms that achieved Diamond, Platinum and Gold status in ABC’s Safety Training Evaluation Process (STEP) in 2017. During the selection process, they were judged on self-evaluation scores, lost workday case rates, total recordable incident rates, leading indicator use, process and program innovations and video interviews conducted by members of ABC’s National Environment, Health and Safety Committee. 

STEP is the standard for developing world-class safety programs in construction and is designed to help both large and small contractors evaluate every aspect of their corporate safety and health program and identify opportunities for improvement. 

The National Safety Awards are presented in three major North American Industry Classification System (NAICS) code categories: NAICS 236 – Construction of Buildings; NAICS 237 – Heavy and Civil Engineering Construction; and NAICS 238 – Specialty Trade Contractors.

See a complete list of National Safety Excellence Award winners on ABC’s website.

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ABC announced the winners of the Construction Management Competition (CMC), National Craft Championships (NCC), Craft Professional of the Year and Craft Instructor of the Year during its Careers in Construction Awards ceremony at the conclusion of ABC Convention 2018 in Long Beach, Calif., March 22.

Construction Management Competition (CMC)

Sixteen teams of four undergraduate students from colleges and universities nationwide put their construction project leadership skills to the test during ABC’s annual Construction Management Competition (CMC). Teams were assigned to manage the completion of the same mock project over two days. First, second and third place awards in five categories were presented to the winners.

The team from Florida International University, sponsored by the ABC Florida East Coast Chapter, won first place overall, in addition to top honors in quality control, estimating and project management. The teams’ projects were graded on their excellence in estimating, project management, safety, quality control and overall presentation. 

A full list of the 2018 CMC winners is available at abc.org.

National Craft Championships (NCC)

The National Craft Championships featured a field of more than 170 craft professionals competing for top honors in 15 competitions representing 12 crafts, including a team competition with journey-level craft professionals from five different crafts working to complete a joint project. Competitors first took an intense, two-hour written exam and then competed in daylong hands-on practical performance test.

NCC is a part of ABC’s effort to raise the profile of careers in construction and highlight the $1.1 billion that ABC member companies spend annually on workforce development. Each year the competition draws some of the nation’s most talented craft professionals and highlights the important role that craft skills training plays in the construction industry.

A list of the 2018 NCC winners is available on ABC’s website.

Craft Professional of the Year and Craft Instructor of the Year

Richard Brown of Gaylor Electric Inc. was named 2018 Craft Professional of the Year, and William Fuller of ABC’s Greater Houston Chapter was named 2018 Craft Instructor of the Year.

Each year, ABC presents the Craft Professional of the Year Award to a construction craft professional who excels in his or her field while also demonstrating a commitment to safety, training and the merit shop philosophy. Brown was selected from among four finalists. Brown started his electrical career in Jamaica and later moved to the United States and completed a four-year ABC apprenticeship program, excelling as a service technician at Gaylor Electric. He is a veteran of six mission trips to Jamaica and Panama, where he uses his skills to help build medical clinics. Brown will receive a brand new 2018 Ram Tradesman truck from the award’s exclusive sponsor, Tradesmen International, with support from FCA.

ABC presents the annual Craft Instructor of the Year Award to an instructor who possesses outstanding creativity, a positive attitude and the ability to transfer knowledge through communications skills and innovative teaching to promote lifelong learning to our future workforce. Fuller was selected from among five finalists as the instructor who best embodies merit shop ideals through superior effort and talent in his role as manager of safety and technical training at ABC Greater Houston Chapter’s Construction & Maintenance Education Foundation. He teaches multiple crafts utilizing the NCCER curriculum, including carpentry, scaffolding, rigging, crane, heavy equipment, crew leadership, boilermaking and CSST, bringing enthusiasm and passion to the classroom.  Fuller received a $10,000 cash prize from award sponsors NCCER and the Trimmer Construction Education Fund.

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