AGC: Construction spending maintains momentum, but high fuel and materials costs pose problems in 2006
"Construction spending in November outpaced even the upwardly revised October and September totals," Ken Simonson, chief economist for the Associated General Contractors of America (AGC) says. He was commenting on new Census Bureau figures that showed the value of construction put in place set a record of $1.15 trillion at a seasonally adjusted annual rate, up 0.2 percent from October. The totals for October and September were revised up by one percent apiece from last month's estimates.
"Growth has been steady and well distributed among the major construction segments for the past several months," Simonson observes. "For the first 11 months of 2005, total construction was nine percent higher than in the same months of 2004. Private residential construction grew 11 percent, public construction, eight percent, and private nonresidential, five percent.
"The leading categories have been multi-retail (general merchandise, shopping centers, and shopping malls), up 25 percent year-to-date; manufacturing construction, 23 percent; private multifamily, 21 percent; hospitals, 13 percent; private single-family, 12 percent; and highways and streets, 11 percent," Simonson notes.
"Fast-rising materials and fuel costs have exaggerated the growth in some of these categories, especially highway construction," Simonson adds.
"For 2006, I expect the cost of fuel, asphalt, and plastics such as polyvinyl chloride (PVC) pipe, to average 10 to 20 percent higher than in 2005, because of high petroleum and natural gas costs," he predicts. "Copper remains expensive, and I expect continuing spot shortages of cement that will push concrete prices higher nationwide. However, steel, wood, and gypsum products should be no higher on average than in 2005 despite a lot of month-to-month volatility.
"The leading construction segments are likely to be manufacturing, health care, and lodging," Simonson says. "Single-family construction will fade as the year goes on.
"I'm worried that states will have a hard time maintaining growth in highway construction," he concludes. "High fuel prices are bringing down fuel consumption, which in turn lowers state and federal highway trust fund receipts."
Wage & benefits survey available
ARTBA offers 2006 data
Are you interested in learning more about what contractors in your area are paying their employees? The American Road & Transportation Builders Association Transportation Development Foundation's (ARTBA-TDF) 2006 "Transportation Contractors Salary & Benefits Survey" can help.
The new ARTBA-TDF publication provides data for 30 office and field positions found in a typical firm in the transportation construction industry. Detailed salary, bonus and benefits information is also included.
The survey results were based on responses from contractors representing firms of all sizes and from across the country. Results are presented nationally and in five regional divisions. Specific information is provided on compensation for small (less than $5 million), medium ($5-$50 million) and large (more than $50 million) firms.
The publication also includes the average, high and low salaries and bonuses for top executives, office personnel and field workers. Hourly wage and benefit information is provided for hourly workers, both skilled and unskilled. Workforce composition such as the number of unionized, Hispanic, African-American and women hourly and salaried employees is also available, broken down by region.
The 150-page survey can be purchased for $200 by contacting ARTBA's Beth Tilahun at (202) 289-4434 or by visiting www.artbasalarysurveys.com.
Forney goes west
Testing equipment company opens second customer service center
Forney Inc., a manufacturer of testing equipment for the construction industry, has opened a second customer service center in Denver, CO. The center will be known as Forney West. The move is part of Forney's ongoing commitment to improving customer service. Customers will see shipping times and costs much reduced. Technical expertise will be available 12 hours a day.
"Placing order with Forney West will cut delivery times for Western customers by two to three days and costs by 30 to 50 percent," says Garry Kuka, Forney West's general manager. "Forney West also has a particular expertise in soils and aggregates testing —the main market for us here —so we'll not just be moving closer, we'll be better able to reflect market needs too."
The launch of Forney West also enables Forney Inc. to provide personal customer service support 12 hours a day and makes Forney the only testing equipment manufacturer to have more than one USA customer care center.
AGC donates to Katrina victims
Barriere employees are among the recipients
The Associated General Contractors of America (AGC) is distributing nearly $400,000, raised through AGC's Hurricane Katrina Construction Workers Fund, to Gulf Coast construction craft workers devastated by Hurricane Katrina.
" These donations are just a small expression of our sympathy," said AGC President Sam Hunter (President and CEO of T. A. Loving Co., Goldsboro, NC) at a check presentation to employees at Barriere Construction Company in New Orleans, LA, in December. "We hope this relief fund will offer some peace of mind to those who have suffered."
Barriere employees were among those in the region to receive donations from AGC's Hurricane Katrina Construction Workers Fund.
"We are grateful to AGC of America and the Louisiana Chapter of AGC for coming together to help craft workers at Barriere and other AGC firms from the affected areas," said Barriere Construction Company President George Wilson. "Many of the craft workers in the area have been displaced from their homes and apartments, but have returned to work."
AGC established the fund, through the AGC Education and Research Foundation, to provide financial assistance to the construction workers in Louisiana, Mississippi and Alabama who suffered financially from the disaster. To be eligible for the fund, applicants must be employed by an AGC member firm and have certified losses (including damages/losses to residence, personal belongings, clothing, furniture and household goods) in excess of $10,000.
"This is a difficult time for many and the donations will bring some relief," added Wilson.
Barriere Construction Company, founded in 1949, is a third-generation operation that has earned a reputation for an unwavering dedication to quality and service specializing in site work and roadway construction. Under the steady leadership of the Wilson family, Barriere has distinguished itself over the years as a firm committed to providing only the best while serving the Louisiana construction industry. executive elected chairwoman
Executive elected chairwoman
Glasgow to chair TRIP
LA (Lois Ann) Glasgow, a Philadelphia-area business executive, has been elected to the top volunteer leadership position of a national transportation group.
Glasgow, of Spring House, PA, was elected Chairwoman of the Board of Directors of TRIP, a national nonprofit transportation research group, at the organization's annual meeting in November. TRIP, founded in 1971 and based in Washington, D.C., researches, evaluates, and distributes economic and technical data on highway transportation issues. Glasgow has been a member of the TRIP board since 1999.
Glasgow is treasurer/director of Glasgow Inc., a heavy and highway contractor and materials producer located in Glenside, PA, that was founded by her grandfather, Samuel Glasgow, in the early 1900s.
"TRIP is the only organization dedicated solely to furnishing the media and the public with the facts about America's road and bridge funding needs and conditions," says Glasgow. "Pennsylvania motorists and businesses benefit from good roads, and TRIP's grassroots efforts help educate the public about the importance of highway improvements to our economy, mobility and traffic safety."
Glasgow has spent nearly 30 years working in the construction industry. She is Glasgow Inc.'s corporate equal employment opportunity officer and safety coordinator and has created and implemented all of her company's corporate policies, hazard communications and drug and alcohol abuse programs.