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October Shows Increase In Construction Spending

December 6, 2010 1 comment

Associated General Contractors of America reports construction spending up 0.7 percent in October. Rise was driven by power projects and public construction.  Still waiting on a significant private sector increase.

Total construction spending increased by 0.7 percent in October, driven largely by growing demand for power projects and public construction, the Associated General Contractors of America noted today in an analysis of new Census Bureau data. The new data, however, indicated continued weakness in many construction categories, including private nonresidential and single family construction, association officials observed.

Full Press Release: AGC of America

Categories: News

U.S. Economic Recovery Looks To Texas As Leader

December 1, 2010 1 comment

The Brookings Institution Metropolitan Policy Program reports Texas is one of the leaders in economic recovery.

Four Texas metropolitan areas — Houston, Austin, Dallas and San Antonio — dominate the top 15 U.S. cities in a global study to determine the level of cities’ recovery from the recession.

The Brookings Institution Metropolitan Policy Program report ranks 150 cities: 50 in the United States, 50 in Europe and 50 in the rest of the world. Austin was the highest-ranked U.S. city and No. 26 in the world. Dallas ranks as the No. 4 U.S. city and No. 39 in the world. San Antonio ranks No. 11 in the U.S. and No. 51 in the world.

Houston is ranked No. 15 in the U.S. and No. 61 in the world, according to the report, Global MetroMonitor, which received assistance from the London School of Economics and Political Science.

San Antonio, Houston and Dallas rose in global rankings during the past two years from their pre-recession rankings. Austin stayed about the same, ranking No. 25 among the 150 metro areas before the recession.

The report found that income and job growth in metro areas exceed those of their nations as a whole, which means large cities are leading the global recovery from the 2007-09 recession.

The cities recovering the fastest are outside the United States. Twenty-nine of the 30 best-recovering cities are outside the U.S., with only Austin making that group.

Metro areas in Asia, Latin America and the Middle East are making the strongest recoveries. The top five, in order, are: Istanbul, Turkey; Shenzhen, China; Lima, Peru; Singapore; and Shanghai, China.

Read More: Chron.com – Texas Dominates Economic Recovery Rankings

Categories: News

29 States See Construction Employment Expansion From September to Novemeber

November 29, 2010 1 comment

Associated General Contractors of America Reports:

Construction employment expanded in 29 states between September and October, while fewer people are working in construction compared to last year in 39 states, the Associated General Contractors of America reported in an analysis of state employment data released today by the Labor Department. The new figures continue a nearly year-long trend of ups and downs in construction employment as the industry performs stimulus-funded work yet grapples with broad market uncertainty.

Read Full Article: ForConstructionPros.Com

Categories: Construction, News

U.S. Recovery Is Lead by Texas

November 15, 2010 5 comments

Texas sits atop the list as one of the leaders in the slow recovery process this country is facing.

Fueled in part by rising but stable oil prices, Texas continues to lead the country’s recovery, albeit at a relatively slow pace, according to a fourth-quarter regional economic forecast.

A report issued Monday by economists with BBVA Compass bank said that besides rising energy demand, Texas’ relatively stable housing market, continued private job creation, limited fiscal challenges and strong exports – notably petroleum and coal products – will sustain the state’s recovery into 2011.

“Although most states have experienced a growth deceleration in the second half of 2010, Texas’ growth has accelerated and remains solidly positive,” the report said.

The report predicts that Texas’ gross domestic product will grow by 3 percent this year and 2.8 percent in 2011, with both rates above the projected U.S. average of 2.7 percent in 2010 and 2.3 percent next year.

Through the first nine months of the year, Texas created 182,200 private sector jobs – approximately 16 percent of the U.S. total and the highest state total in the country

Read more: Texas leads U.S. recovery, report says | Houston Business Journal

NEWSWEEK has compiled a list of the 10 American cities best situated for the recovery.

These are places where the jobs are plentiful, and the pay, given the lower cost of living, buys more than in bigger cities. In other words, places unlike much of the rest of the country. The cities, most of which lie in the red-state territory of America’s heartland, fall into three basic groups. There’s the Texaplex—Austin, Dallas, San Antonio, and Houston—which has become the No. 1 destination for job-seeking Americans, thanks to a hearty energy sector and a strong spirit of entrepreneurism. There are the New Silicon Valleys—Raleigh-Durham, N.C.; Salt Lake City; and urban northern Virginia—which offer high-paying high-tech jobs and housing prices well below those in coastal California. And then there are the Heartland Honeys—Oklahoma City, Indianapolis, and Des Moines, Iowa—which are enjoying a revival thanks to rising agricultural prices and a shift toward high-end industrial jobs.

Read more from Newsweek: Greetings From Recoveryland

Categories: News

“Slow Progress” Is ABC 2011 Construction Industry Prediction

November 15, 2010 1 comment

Associated Builders and Contractors (ABC) released its 2011 economic forecast for the U.S. commercial and industrial construction industry.  The verdict not so good…”slow progress.”

“The period of rapid improvement in spending levels did not begin in 2010, and will not happen in 2011,” said ABC Chief Economist Anirban Basu.

“ABC’s forecast of nonresidential construction spending for next year suggests that total spending will be 0.1 percent less than 2010 levels. Privately financed construction levels are projected to decline 0.2 percent while publicly financed construction levels are projected to be virtually flat. The bottom line is the nonresidential construction recession is largely over, but 2011 will be associated with grudgingly slow progress,” said Basu.

“To the extent that there has been recovery in nonresidential construction, it has been concentrated in segments closely tied to federal funding and the stimulus package passed in February 2009 in the midst of the recession,” Basu said. “For example, five nonresidential construction categories monitored by the U.S. Census Bureau have experienced rising spending levels from the same time last year, including conservation and development, water supply, sewage and waste disposal, and highway and street, and transportation.

“In contrast, 11 nonresidential construction sectors have experienced year-over-year declines in spending, a reflection of the lack of available capital to finance growth and investment,” said Basu. “The deepest downturns registered in construction were related to lodging, manufacturing, office and commercial. ABC expects that the lack of access to capital will continue to deter economic progress in 2011, and is forecasting 1.7 percent GDP growth next year despite ongoing federal stimulus funding and the expectation of a more expansive monetary policy.

Year-to-Date Performance: 2009 – 2010 and ABC’s 2011 Forecast

Indicator 2009 2010 2011* % Change2010-2011
Construction Put in Place – (millions, seasonally adjusted annual rate)U.S. Census Bureau 
Total Nonresidential
Lodging $25,474 $11,653 $10,814 -7.2%
Office $52,717 $36,225 $34,413 -5.0%
Commercial $55,042 $41,112 $38,645 -6.0%
Health care $45,111 $40,038 $40,338 0.7%
Educational $102,907 $87,650 $85,897 -2.0%
Power $89,405 $79,568 $83,944 5.5%
Manufacturing $58,513 $39,025 $34,342 -12.0%
Total All Industries $654,207 $557,867 $557,242 -0.1%
Private Nonresidential
Lodging $25,350 $11,051 $10,256 -7.2%
Office $37,904 $22,858 $21,716 -5.0%
Commercial $51,286 $38,393 $36,089 -6.0%
Health care $35,651 $29,843 $31,000 3.9%
Educational $16,800 $13,275 $14,500 9.2%
Power $77,622 $66,542 $71,025 6.7%
Manufacturing $57,976 $38,313 $33,715 -12.0%
Total All Industries $347,759 $259,214 $258,716 -0.2%
Public  Nonresidential
Office $14,813 $13,366 $12,698 -5.0%
Commercial $3,756 $2,719 $2,556 -6.0%
Health care $9,460 $10,195 $9,338 -8.4%
Educational $86,107 $74,375 $71,397 -4.0%
Power $11,783 $13,026 $12,919 -0.8%
Total All Industries $306,448 $298,653 $298,526 0.0%
Construction Employment (thousands, not seasonally adjusted)U.S. Department of Labor 
Nonresidential 726.2 676.2 677.2 0.2%
Residential 639.6 579.8 726.9 25.4%
Producer Price Index U.S Department of Labor 
Inputs to Construction Industries – Index Value 188.6 196.2 203.3 3.6%
Gross Domestic Product (2005 billions of dollars) U.S Department of Commerce 
Real GDP 12,880.6 13,353.4 13,587.1 1.75%

*= Data predictions by ABC Chief Economist 

…and the 2011 outlook?

The national recession that began in December 2007 ended in June 2009.  Nonresidential construction typically lags the overall performance of the U.S. economy by 12 to 24 months. Even as the broader U.S. economy entered a period of substantial decline in 2008, nonresidential construction volumes continued to expand and grew 9 percent that year. Eventually, the weakness of the overall U.S. economy, coupled with a deep financial crisis and accompanying credit crunch, wreaked havoc on all sectors of nonresidential construction. According to U.S. Census Bureau data, nonresidential construction spending declined 9 percent in 2009 and ABC projects that spending will fall 14.7 percent this year.

The good news is the period of deep decline in U.S. nonresidential construction spending is over. The bad news is this appears to represent stagnation, with overall construction volumes mired at or near bottom-of-the-cycle levels. In other words, by remaining near 2010 levels, 2011 construction spending is positioned to be nearly a quarter less than 2008 totals.

Viewed from another perspective, the expectations for 2011 represent a stark contrast from what occurred in 2010.  As a year, 2010 was a period of widely variable performance between construction segments as sectors powered by the availability of federal stimulus funds experienced growth, and privately financed activities buckled under the weight of depleted capital availability and excess supply. Next year, the variable in performance between segments will be far diminished, at least in terms of percentage changes in spending volumes.

Read Full Article From Associated Builders and Contracors here.


 
 
 

 

 

 

Categories: Construction, News

Tier 4 EPA Compliant Engines; The Who, What & When

November 12, 2010 6 comments

Engines used in virtually every piece of heavy construction equipment is changing as the U.S. Environmental Protection Agency’s (EPA) Jan. 1, 2011, deadline approaches for Tier 4 Interim (Tier 4i) compliance on engines of more than 130kW (174 hp).

What does this mean for you and how will it affect your business and equipment use?  We will defer to our friends over at Rental Management who put together an article written by Jim Robinson to try to help clear the mud.

Engine manufacturers have spent the past several years developing new technologies to meet the new mandates and many have introduced Tier 4i/Stage IIIB compliant engines, a step to a final Tier 4 level requiring that engines emit 90 percent less particulate matter (PM) and 50 percent less nitrogen oxides (NOx) than Tier 3 engines.

There are two main technologies that engine manufacturers have adopted to reach Tier 4i compliance.

One of the technologies used by manufacturers is selective catalytic reduction (SCR). When an engine is adjusted for maximum efficiency, high combustion temperatures will reduce PM levels but increase NOx levels. SCR is an after-treatment system that cinjects diesel exhaust fluid (DEF), a mixture of urea — an organic compound — and water into the exhaust stream to create a chemical reaction that transforms the NOx into nitrogen and water.

Manufacturers in favor of using SCR say that because the combustion process on an SCR engine is efficient, the fuel consumption is reduced and the after-treatment system allows the engine to be very high performance. They say the simple design of the SCR system allows it to be very efficient and provide the same torque and power at the same displacement, which critics of cooled exhaust gas recirculation (CEGR) say is not possible with that technology.

The second major technology used to reach Tier 4i compliance is cooled exhaust gas recirculation (CEGR), which is a method for reducing NOx levels. A CEGR system recirculates exhaust gases, blends them with fresh air and returns the blend to the cylinder. This makes for lower combustion temperatures, which reduces NOx, but also will mean higher PM levels than those produced by a hotter burning engine. That means an after-treatment exhaust filter system is needed to lower the PM levels. This particulate filter is coated with a catalyst so that hot exhaust can burn off particulate matter, releasing carbon dioxide.

With a CEGR system the basic engine technology remains the same, there is no additive required and the system doesn’t require any change in the way the equipment is operated, but the particulate filter will require attention. “The CEGR system’s diesel particulate filter requires periodic regeneration that will vary depending on engine load. The filter offers a long life — more than 1,000 hours — but requires eventual replacement,” says Case’s Stemper.

How much can you expect equipment costs to go up or change with Tier 4 regulations? 

When the EPA developed the Tier 4 regulations, it estimated the increase would be 1 to 3 percent of the total equipment price, so the cost of a $13,000 piece of equipment would rise by $760 and the cost of a $235,000 piece would rise by $2,590. Caterpillar recently announced that prices on its equipment would increase by 2 to 6 percent next year in order to pay for the development and production of the new emissions technologies.

Full Article from RentalManagementmag.com: What Tier 4 Means To You

Categories: Equipment, News

Construction Industry Unemployment Still Up Despite Addition Of 5,000 Jobs

November 9, 2010 23 comments

The Associated General Contractors of America released some puzzling math in the construction industry employment numbers.

Even as the number of people working in construction increased by 5,000 between September and October 2010, the industry’s unemployment rate rose to 17.3 percent, according to an analysis of federal employment figures released today by the Associated General Contractors of America. Temporary government investments boosted commercial construction employment, offsetting further job losses in residential construction, association officials noted.

“Despite significant help from programs like the BRAC and the stimulus, construction employment continues to lag behind much of the private sector,” said Stephen E. Sandherr, the association’s chief executive officer. “It is yet another indicator that the economy has a long way to grow before demand for new office buildings, retail centers and manufacturing facilities returns.”

Association officials noted that construction employment lagged behind other sectors of the economy. For example, while total private employment rose by 1.1 million during the past 12 months, the construction industry lost 122,000 jobs. Meanwhile, the industry’s unemployment rate is nearly double the unadjusted national rate of nine percent.

Full Press Release From: AGC of America

Categories: Construction, News