PPI Jumps 24% in 12 Months, Preventing Contractors from Passing Along Cost Increases

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Increases in prices for wood, metals, plastics and gypsum continue to narrow the margin between what contractors pay to acquire raw materials and what they’re able to charge the project owner.

Ken Simonson, chief economist for the Associated General Contractors of America, said the construction industry Producer Price Index – which measures the average change over time in the selling prices received by domestic producers for their output – has climbed 24.3 percent over the past 12 months, increasing 4.3 percent in May 2021 alone. The 12-month climb, he says, is nearly double that of any previous year in history.

“This increase far outstrips contractors’ ability to charge more for projects,” said Simonson. “This gap means contractors are being hit with huge costs that they did not anticipate and cannot pass on.”

Meanwhile, the PPI for new nonresidential construction – a measure of what contractors say they’d charge to build five types of commercial structures – increased only 2.8 percent over the past 12 months. AGC’s recent analysis included narrative from contractors across the nation who said they’d held their profit expectations down to compete for a limited number of new projects.

According to the AGC, the PPI for lumber and plywood more than doubled, increasing 111 percent from May 2020 to May 2021. The index for steel mill products increased 75.6 percent over the same period. The copper and brass mill shapes PPI rose 60.4 percent since May 2020, and the aluminum PPI rose 28.6 percent. The PPI for plastic construction products increased 17.5 percent, while the index for gypsum products such as wallboard climbed 14.1 percent.

Fuel costs, Simonson says, along with surcharges on freight deliveries, have also jumped.

AGC officials including CEO Stephen Sandherr, are urging the Biden administration to end tariffs and quotas on steel, aluminum and lumber as the first step toward easing pressure on construction costs and supply chain bottlenecks.

“Ending tariffs on Canadian lumber, along with tariffs and quotas on steel and aluminum from numerous allied countries, is good policy,” Sandherr said.

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Holland Construction Services Begins Work on Phase II of Sunnen Station Apartments

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Holland Construction Services has begun construction of the second phase of the Sunnen Station Apartment complex near Manchester and South Hanley Roads in Maplewood, Missouri. This new four-story, 121-unit apartment community will include an attached 61,000 sq. ft. two-level parking garage with 187 spaces and indoor/outdoor recreational facilities.

Holland completed Phase I of the complex in 2017 which sits adjacent to Phase II and will be connected by a shared parking lot. The complex is also adjacent to the Sunnen Station MetroLink Station and the Sunnen Business Park. This multi-family community, developed by the Sunnen Family in conjunction with Cozad Commercial Real Estate, is the first new apartment construction in the City of Maplewood in several years.

G.T. Cozad, Principal at Cozad Commercial Real Estate, said after seeing the success of the first project, Sunnen knew they wanted to do something that resembled Phase I, but was a little bit different.

“Phase I of Sunnen Station Apartments is currently 100% occupied so we have found there is clearly a need for this type of development in the area,” said Cozad. “The new development will include many of the same modern amenities as Phase I, including on-site recreational facilities such as a fitness center, and a swimming pool.”

Michael Cozad, Principal at Cozad added, “Holland has tremendous expertise in this area and did a fantastic job on Phase I of this project so it was an easy decision to involve them in Phase II. The City of Maplewood has also been a good partner for us so we were happy to continue development in this location.”

Holland Project Director Will Stajduhar said the 120,000 sq. ft. multi-family development is a standard project for his team and most of the major earthwork is now complete. The next steps will be pouring the footings on the retaining wall and setting up on-site utilities.

“One unique feature of this building is that we had to accommodate the layout of the land in our design plans,” said Stajduhar. “The north section of the building is like a five-story building and we created it this way to adapt to the elevation in that area. Multi-family is one of our specialties and the fact that we’ve worked with this owner and developer before and are familiar with this project site will make this project run very smoothly.”

The expected completion date for Sunnen Station Apartments Phase II is May of 2022. For more information about the development, go to www.sunnenstationapts.com.

About Holland

Holland Construction Services is a full-service construction management, general contracting, and design/build firm guided by the principle of providing clients the best possible build experience on every project. Holland has been providing quality construction services throughout Illinois and Missouri since 1986, and is led by founder and CEO Bruce Holland, President Mike Marchal, and Vice President & Multi-Family Director Doug Weber. Holland offers pre-construction, construction and virtual design & construction services to commercial,

education, healthcare, industrial, multi-family, municipal, recreation, and senior living clients. The St. Louis Business Journal ranks Holland as a “Best Places to Work” and one of the top 15 contractors in the St. Louis area. For more information, visit Holland’s website at www.hollandcs.com.

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People On The Move In The Local Construction Industry

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Castle Stone Products Welcomes Jim Tovo as Director of Operations

Jim Tovo

Castle Stone Products is pleased to announce that Jim Tovo has joined the Castle Stone team as Director of Operations. In his new position, Jim will be responsible for leading production, QC, shipping & receiving and further positioning the company for operational efficiencies and growth. Jim will also be instrumental in the company’s launch of its new line of Laticrete products. Jim brings nearly 15 years of industry operational & sales experience in his new role, as the Company continues to expand its reach in multiple states.

Castle Stone Products is a STL-based, business-to-business manufacturer of 12 different styles of stone veneer, distribute a full range of cast stone materials & granite and recently was approved as a distributor for masonry veneer installation products from Laticrete.

IMPACT Strategies’ Growth Prompts Promotions of Teresa Whittaker & Scott Manning

Teresa Whittaker

IMPACT Strategies is excited to announce the promotions of Teresa Whittaker to Chief Financial Officer and Scott Manning to Director of Construction Operations.

As Chief Financial Officer, Teresa Whittaker will execute IMPACT’s financial strategic initiatives, develop long-term financial goals, and play an integral role in driving the success of IMPACT by monitoring financial performance. In this role, Whittaker will continue to lead IMPACT’s accounting team and HR operations, identify critical trends, and develop new company best practices, projections, and solutions.

Prior to joining IMPACT, Whittaker received her bachelor’s degree in Accounting from Robert Morris College and worked in the public accounting sector for 10 years. Whittaker has been with IMPACT since the company’s inception—she was hired as an Accounting Manager in 2002, promoted to Controller, and is currently an active member of IMPACT’s Executive Committee.

“Teresa has grown substantially throughout her career with IMPACT,” said Mark Hinrichs, President of IMPACT Strategies, Inc. “She has done an excellent job in preparing the department to support our growth–from the early founding days of the company to where we stand today. She has continually challenged herself and others around her to find ways to streamline our processes and procedures with an innovative focus on technology.”

Scott Manning

Scott Manning brings 10+ years of construction management, business knowhow, and a vast understanding of IMPACT’s company culture to the position. In addition to managing IMPACT’s team of Project Managers, Project Engineers, and Superintendents, Manning’s role will also supervise the safety and quality control efforts on IMPACT job sites. As Director, Manning will oversee the execution of field construction activities—ensuring the delivery of timely, safe, and quality construction and completion of IMPACT projects.

Manning’s career with IMPACT began early. While in college, Manning served as an intern for IMPACT. In 2009, he graduated from Southern Illinois University-Edwardsville with a degree in Construction Management and a minor in Business. Post-graduation, Manning worked for the Corps of Engineers at Scott AFB. But, after 18 months, he decided to continue his career at IMPACT.

During his tenure, Manning started as a Project Engineer and progressed from Project Manager to Senior Project Manager. He managed an array of projects—from retail and commercial, to large-scale senior living and multi-family housing developments. “Scott’s hard work ethic, construction knowledge, and commitment to the IMPACT team are why he was chosen for this position,” said Hinrichs.

“He is an integral part of the IMPACT culture and, through his efforts, has helped IMPACT expand its presence as a leading provider of premier construction services. In this role, we will continue to expect amazing things from him.”

IMPACT’s continued growth is guided by their Executive Committee which is comprised of six members of its senior leadership team: Mark Hinrichs – President, Mike Christ – Executive Vice President, Nick Walker – Vice President, Project Development & Strategy, Teresa Whittaker – Chief Financial Officer, Jason Toennies – Senior Estimator, and Scott Manning – Director of Construction Operations. This Committee meets regularly to review the tactical functions within all departments of the company while also establishing accountability to the objectives of our regularly updated strategic business plan.

IMPACT Strategies provides client-focused construction management, design/build, and general contracting services. The firm offers a full continuum of innovative design/build service capabilities including proven construction management processes and site development. IMPACT Strategies serves a regional and national client base in the Healthcare, Senior Living, Multifamily, Office, Retail, and Warehouse/Distribution markets. To learn more visit BuildwithIMPACT.com or call 618-394-8400 or 314-646-8400.

June 18, 2021

Sam Duggan Joins Midwest BankCentre’s Legal Board of Directors

Sam Duggan

Sam Duggan, chief financial officer of Stupp Bros., Inc., has been elected to the legal board of directors of Midwest BankCentre.

In his role as chief financial officer at Stupp Bros., Duggan directs accounting, finance, risk management, information systems, legal, human resources and strategy. Stupp Bros., Inc. is a fifth-generation privately owned company focused on providing infrastructure development in the United States as well as serving the St. Louis market through Midwest BankCentre, St. Louis’ second largest, locally owned community bank.

Duggan serves on the corporate boards of Stupp Bros., Inc. and Ben Hur Construction Co. He also is a member of the Father’s Club board of directors at Chaminade College Preparatory School.

Duggan graduated from Saint Louis University with a bachelor’s degree in accounting and finance. He obtained his master’s in business administration degree with an emphasis in finance and international business at the University of Notre Dame. Duggan has been a certified public accountant since 1987.

Midwest BankCentre’s current assets exceed $2 billion and deposits total more than $1.5 billion. A mainstay of the greater St. Louis community banking scene since 1906, the bank employs a staff of about 280 working at 18 bank locations in the City of St. Louis, St. Louis, Jefferson and St. Charles counties in Missouri and St. Clair County in Illinois. It works to empower people, enable business and energize neighborhoods through the strength of its financial services, including personalized consumer and business banking, business cash management, mortgage lending, home equity loans, financial planning and investments, insurance and digital banking.

The bank is a local leader in the St. Louis Regional Financial Empowerment Coalition (formerly the St. Louis Regional Unbanked Task Force) and its Bank-On Save-Up St. Louis initiative. Since 2001, Midwest BankCentre has consecutively achieved the Bauer Financial 5-Star Superior financial rating each quarter.

June 11, 2021

S. M. Wilson Promotes Anna Eisenbath to Assistant Project Manager

Anna Eisenbath

S. M. Wilson & Co. has promoted Anna Eisenbath to Assistant Project Manager. As Assistant Project Manager, she will be coordinating the activities of a project to ensure schedule, financial management, document control and quality standards are met and projects are completed safely, on time and with approved budgets.

Eisenbath joined S. M. Wilson five years ago as an intern and has worked on a variety of complex projects playing a significant role in their success, including projects for clients such as Ladue School District, Nestle Purina PetCare and Target. Most recently, Eisenbath has taken on management of multiple in-store remodels for the Target Corporation throughout the region.

Eisenbath is a highly respected and regarded construction team member within the Target Corporation. S. M. Wilson is one of Target’s preferred providers of construction services nationally, having worked on hundreds of stores throughout the country.

Eisenbath holds a B.S. in Civil Engineering from Missouri University of Science and Technology and is OSHA 30 certified. She is also actively involved in the community including being a member of the United Services for Children Playmakers Young Professionals Group.

S. M. Wilson is a full-service construction management, design/build and general contracting firm with headquarters in St. Louis and offices in Edwardsville, IL and Cape Girardeau, MO. Founded in 1921, and celebrating its 100th year of serving the community, S. M. Wilson  is dedicated to going above and beyond expectations for their clients by putting people first. The 100% employee-owned company is one of the leading construction management firms in the Midwest. For more information, visit www.smwilson.com. 

Segal Joins TriStar Properties as Vice President of Development

Matt Segal

Matt Segal has joined TriStar Properties as vice president of development.  Making the announcement was Michael Towerman, TriStar president.

In his new position Segal will focus on identifying institutional grade residential development opportunities and taking projects from inception to stabilization on behalf of TriStar and its partnering investors.

Prior to joining TriStar, Segal, a 20-year veteran of the St. Louis real estate market, built a substantial book of business in land acquisition and development across metro St. Louis on behalf of Pulte and Payne Family Homes.

Segal holds a bachelor’s of science degree from the University of Missouri-Columbia and a master’s degree in business administration from Maryville University.

Wes Burns Joins Midwest BankCentre as Senior Vice President of Community and Economic Development

Wes Burns

Wes Burns has joined Midwest BankCentre as senior vice president of community and economic development.

Burns applies more than 20 years of banking experience to leading Midwest BankCentre’s expanded focus on supporting affordable housing, New Markets Tax Credits (NMTC) and other complex financing solutions within the St. Louis region and beyond. His work aligns with the bank’s five-year, $200 million investment in helping people in underserved communities buy homes, start or scale businesses, and transform neighborhoods.

Burns most recently served as market president for a community bank in St. Louis. He previously was a director of asset management, leading a team managing a national portfolio of Low-Income Housing Tax Credit (LIHTC) projects.

“Wes applies his vast economic development experience to helping Midwest BankCentre transform lives and neighborhoods that have been marginalized,” said Chairman and CEO Orvin T. Kimbrough. “His efforts help us change neighborhoods pockmarked by abandonment into thriving and stable communities, restoring forgotten communities into places of value and contribution.”

Burns has served as vice chairman of the board for both Sunnyhill Inc. and The Housing Partnership. He now serves as a board member for Covenant House Missouri. He graduated from the Southeast Missouri State University with a bachelor’s degree in business management and earned his MBA at Webster University. He also graduated from the Graduate School of Banking at University of Colorado in Boulder.

Midwest BankCentre’s current assets exceed $2 billion and deposits total more than $1.5 billion. A mainstay of the greater St. Louis community banking scene since 1906, the bank employs a staff of about 280 working at 18 bank locations in the City of St. Louis, St. Louis, Jefferson and St. Charles counties in Missouri and St. Clair County in Illinois

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Clayco Foundation Hosts First Annual Juneteenth Fund Celebration

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Clayco Foundation’s Juneteenth Fund Advisory Committee hosted a sold out celebration on Saturday, June 19 from 5:30 p.m. to 9:00 p.m. at Mahler Ballroom. This year’s event helped raise funds for six nonprofit organizations dedicated to raising awareness and advancing the causes of Black equality and inclusion in the St. Louis and Chicago metro areas

The livestreamed sold-out celebratory event, catered by Black-owned businesses and the event featured African American art and performers. The live stream will be available on Clayco’s Juneteenth Fund website. Thanks to the generosity of partners, friends and members of the Clayco family, the Fund has already doubled its fundraising goal, increasing the number of grants being offered to nonprofit organizations. The monetary donations will be awarded to Juneteenth Fund grant recipients, who are community-based organizations in both Chicago and St. Louis that work to better the individuals and communities they serve.

These include:
1.        My Block, My Hood, My City (https://www.formyblock.org/)
2.        Pride Roc (https://priderocchicago.org/)
3.        The Black Village Foundation (https://blackvillagefoundation.org/)
4.        Arch City Defenders (https://www.archcitydefenders.org)
5.        Life Arts (https://www.lifecreative.org/)
6.        Dream Builders (http://dreambuilders4equity.org)

Celebrated on June 19th of each calendar year, Juneteenth commemorates the day in 1865 when enslaved African Americans in Galveston, Texas learned they were free from slavery. Although the Emancipation Proclamation was signed in 1863, many African Americans were still enslaved in some states. Today, Juneteenth remains a celebration of freedom and hope.  

Clayco Executive Chairman and Founder Bob Clark and Executive Vice President Tom Sieckhaus serve as lead mentors for this initiative while Executive Vice President Otto Nichols III serves as lead trustee. Members of the Advisory Committee continue to advise and assist the foundation on all matters related to the Juneteenth Fund. They include Sandra Porter Marks, Christol Crenshaw, Karen Howell, Dan Lester, Tamara Lewis-Jackson, Trish Marcano-Henderson, Jesse Sanders, Nicolas Smith, Richie Hands and Arnez Stevenson.

“These are important times, and we must all commit to educating ourselves and addressing the systemic issues that have affected communities of color for far too long,” said Bob Clark. “This begins with honest conversations and valuable initiatives like the Juneteenth Advisory Committee and Juneteenth Program, which are committed to lasting change at Clayco and beyond. We are excited to be able to finally host an in-person celebration in honor of this important cause.”

Founded in 2020, The Clayco Foundation Juneteenth Fund is proud to support local and national organizations that further the causes of equality and justice as it specifically pertains to the African American community. We are committed to furthering the awareness of injustices and elevating the voices of those that need it the most. The Juneteenth Fund actively seeks non-profits and individuals that align with our mission for recognition and as fund beneficiaries. We look forward to furthering the relationships with our long-term community partners and building new bridges with emerging non-profits and organizations. For more information visit https://claycojuneteenthfund.com/.

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Stay Safe and Cool in Dangerous Heat with Cooling Tips from Ameren Missouri

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Easy-to-access resources can help protect vulnerable customers

As temperatures soar into triple digits with a high heat advisory, Ameren Missouri is sharing resources to keep cool and safe.

“With the forecast calling for temperatures to reach 100 degrees, we want to make sure our customers are staying safe during the dangerous heat by utilizing their air conditioners,” said Marty Lyons, chairman and president of Ameren Missouri. “We also encourage everyone to check on their neighbors and loved ones, and take advantage of available resources to safely navigate the summer heat.”

Customers and their families are encouraged to visit AmerenMissouri.com/HealthAndSafety for information on the following resources that can serve as safeguards during the hot summer months.

  • Keeping Cool Program – Helps make summer energy bills more affordable for seniors, people with disabilities, the chronically ill or households with young children. It includes up to three monthly electric bill credits in the summer months to keep customers cool and safe.
  • The Caring Contact Program – Eligible customers may designate a person or agency for Ameren Missouri to contact prior to disconnection for nonpayment. Caring Contact helps protect the health and safety of older adults and people with disabilities who may need additional support in handling potential disconnection of service.
  • Medical Equipment Registry – Allows customers to register electrically operated life-sustaining medical equipment so Ameren Missouri can notify them about planned maintenance outages.

Easy adjustments to increase energy efficiency at home can save money on energy costs, reduce stress on HVAC systems and help keep you and your family cool.

“Simple tips like closing the curtains and adjusting your thermostat a couple degrees higher take only a few minutes and can keep your family comfortable while helping you control your energy use during the heat wave and all summer long,” said Tony Lozano, director of energy solutions at Ameren Missouri.

Ameren Missouri’s Cool-Down Tips:

  1. Stay in the shade. Use curtains and blinds to block out direct sunlight, especially during the hottest part of the afternoon. Keeping curtains and drapes closed can help reduce the heat indoors by 33%.
  2. Feel the breeze. Use ceiling or other fans in addition to the air conditioner to help keep cool air circulating. Remember to set the ceiling fan’s blades to spin counterclockwise to create a cool breeze. Supplementing the air conditioner with a ceiling fan enables you to set the thermostat about 4 degrees higher without affecting your comfort.
  3. Take your meal prep outside. Limit the use of ovens and stove tops for indoor cooking. Grilling outdoors can reduce excess heat produced in the kitchen from large appliances.
  4. Clean out air conditioner filters. Well-maintained HVAC units are less likely to fail during months of hard use in the summer. Cleaning out ducts and changing air filters can keep your HVAC system running efficiently.
  5. Reduce hot water use. Take shorter showers and use bathroom exhaust fans to remove the heat and humidity. Make sure bathroom and kitchen exhaust fans are vented to the outside, not the attic, to keep the warm air out.
  6. Upgrade your thermostat. Lower your cooling costs and keep your home comfortable by upgrading to a smart thermostat. Ameren Missouri customers are currently eligible for a $0 Sensi smart thermostat, thanks to instant discounts and participation in the Peak Time Savings program. Visit AmerenMissouri.com/SaveSmart to get yours today.

Ameren Missouri customers can find rebates on many energy-efficient products that help keep your home more comfortable and reduce energy costs. Rebates and savings opportunities for smart thermostats and high-efficiency air conditioners are available for customers at Amerenmissourisavings.com.

About Ameren Missouri

Ameren Missouri has been providing electric and gas service for more than 100 years, and the company’s electric rates are among the lowest in the nation. Ameren Missouri’s mission is to power the quality of life for its 1.2 million electric and 132,000 natural gas customers in central and eastern Missouri. The company’s service area covers 64 counties and more than 500 communities, including the greater St. Louis area. For more information, visit Ameren.com/Missouri or follow us on Twitter at @AmerenMissouri or Facebook.com/AmerenMissouri.

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Commercial Construction Contractors Upbeat on Outlook Despite Worsening Material Shortages, Worker Shortages

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Submitted by the U.S. Chamber of Commerce

Contractors continue to face a shortage of building materials like lumber and steel, while cost fluctuations for the building products are having increasing impact on business, according to second quarter data from the U.S. Chamber of Commerce Commercial Construction (Index). This quarter, 84% of contractors are facing at least one material shortage. Almost half (46%) of contractors say less availability of building products has been a top concern lately, up from 33% who said the same last quarter.

Despite the materials challenges, the overall Index score rose three points to 65 (its highest reading since a score of 74 in Q1 2020 ahead of the pandemic) and contractors are optimistic on outlook for revenue expectations, new business opportunities, hiring plans, and equipment spending. 

• 89% of contractors report a moderate to high level of confidence in new business opportunities in the next 12 months, up from 86% in Q1. Those indicating a high level of confidence jumped 10 points to 34% from last quarter.

• Over half (52%) of contractors say they will hire more employees in the next six months, up from 46% in Q1.

• More contractors (39%) expect their revenue to increase in the next year, up from 36% saying the same in Q1.

For the first time in a year, the percentage of contractors planning to spend more on tools and equipment in the next six months (44%) is higher than those who say they will not spend more (42%). 

“Businesses are experiencing a great resurgence as vaccines allow the economy to fully reopen. Rising optimism from the commercial construction industry reflects what we’re seeing across the broader economy,” said U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley. “However, contractors continue to face challenges navigating materials shortages and finding enough skilled workers to avoid having to turn down projects. That’s why the U.S. Chamber is calling on elected leaders at the federal and state level to take action to address the workforce crisis.”

Materials Shortages Worsen

Most (84%) contractors say they face at least one material shortage, up from 71% in Q1. One in three (33%) are experiencing a shortage in wood/lumber, and 29% are seeing a shortage of steel. Of those contractors experiencing shortages, 46% say they are having a high impact on projects, up from 20% saying the same in Q1. 

Additionally, almost all (94%) contractors say cost fluctuations are having a moderate to high impact on their business, up 12 percentage points from Q1 and up 35 points year-over-year. Wood/lumber and steel are the products of highest concern. 

Contractors Face Worker Shortage Crisis

In the midst of a deepening workforce crisis, finding skilled labor continues to be a challenge for contractors. This quarter, 88% report moderate to high levels of difficulty finding skilled workers, of which, nearly half (45%) report a high level of difficulty. Of those who reported difficulty finding skilled labor, over a third (35%) have turned down work because of skilled labor shortages. 

Most (87%) contractors also report a moderate to high level of concern about the cost of skilled labor. Of those who expressed concern, 64% say the cost has increased over the past six months, and more than three-quarters (77%) expect it to continue to increase over the next year.

Trade and Tariff Concerns are Up

This quarter, contractors expressed increasing concern about the potential effect of tariffs and trade wars on access to materials over the next three years. 

More (45%) say steel and aluminum tariffs will have a high to very-high degree of impact, up from 35% in Q1. Forty percent now say new construction material and equipment tariffs will have a high to very-high degree of impact, up from 29% in Q1. And 30% expect high impacts from trade conflicts with other countries, up from 19% in Q1.

About the Index 

The U.S. Chamber of Commerce Commercial Construction Index is a quarterly economic index designed to gauge the outlook for, and resulting confidence in, the commercial construction industry. The Index comprises three leading indicators to gauge confidence in the commercial construction industry, generating a composite Index on the scale of 0 to 100 that serves as an indicator of health of the contractor segment on a quarterly basis.  

The Q2 2021 results from the three key drivers are: 

• Revenue: Contractors’ revenue expectations over the next 12 months increased to 61 (up four points from Q1). 

• New Business Confidence: The overall level of contractor confidence increased to 62 (up three points from Q1). 

• Backlog: The ratio of average current to ideal backlog rose three points to 72 (up three points from Q1).

The research was developed with Dodge Data & Analytics (DD&A), the leading provider of insights and data for the construction industry, by surveying commercial and institutional contractors. 

Visit www.CommercialConstructionIndex.com to access the full report, methodology, and shareable graphics.

The U.S. Chamber of Commerce is the world’s largest business organization representing companies of all sizes across every sector of the economy. Our members range from the small businesses and local chambers of commerce that line the Main Streets of America to leading industry associations and large corporations. They all share one thing: They count on the U.S. Chamber to be their voice in Washington, across the country, and around the world. For more than 100 years, we have advocated for pro-business policies that help businesses create jobs and grow our economy.

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Input Costs Rise at Record Rate in May; More Increases, Some Declines Reported in June, Delays Grow

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Submitted by the AGC

The gulf between contractors’ costs and pricing widened again in May. The producer price index (PPI) for nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—increased 0.5% from April and 2.8% year-over-year (y/y) since May 2020, while the PPI for material and service inputs to construction industries jumped 4.3% and 24.3%, respectively, the Bureau of Labor Statistics (BLS) reported on Tuesday. An index that measures the price of goods inputs to all construction soared 4.6% for the month and 24.3% y/y; both increases were the largest in the 35-year history of the series. AGC posted tables and charts showing PPIs relevant to construction. Some y/y increases were particularly large because of depressed prices in May 2020 but large increases from April to May also were a factor. PPIs that contributed to the input increases include diesel fuel, which soared 16% in May and 199% y/y; lumber and plywood, up 16% and 111%, respectively; steel mill products, 2.4% and 76%; copper and brass mill shapes, 8.0% and 60%; aluminum mill shapes, 2.7% and 29%; plastic construction products, 2.8% and 17.5%; truck transportation of freight, 3.9% and 16%; gypsum products, 2.1% and 14%; asphalt felt and coatings, 3.1% and 11%; insulation materials, 2.4% and 7.0%; and brick and structural clay tile, 1.8% and 5.7%.

The prices used to calculate PPIs were generally in effect around May 11. Since then, numerous additional increases have been announced, some effective immediately. Gerdau Long Steel North America announced on Monday that it was “increasing the transactional price of concrete reinforcing bar products” $80 per net ton, “effective with new orders received today.” This followed an announcement by Commercial Metals Company on June 11 that “Effective immediately, we are increasing the transactional price for reinforcing steel products from our East Region Mills” by $80/ton. A reader forwarded a message on Tuesday that all steel tubing mills had raised prices $125/ton. Nucor Buildings Group announced on Tuesday that it “will be implementing a 12.0% price increase (+/-), across all of our brands, effective on all building orders quoted on or after June 29.” An editor with the chemical industry news service ICIS reported a variety of supply-chain problems affecting plants producing construction plastics and their ingredients, including slow recovery from the February freeze in Texas, other plant startup or production issues, and lead times that “have been extended because of delays and cancellations from rail and truck carriers.” Readers are invited to email information about construction costs and supply-chain issues to ken.simonson@agc.org.

Copper and lumber futures on the CME’s Comex exchange both declined further this week from all-time highs set in May. The July contracts are down 45% for lumber and 11% for copper from their respective peaks. These decreases should affect prices for construction materials but not uniformly and with a lag that depends on demand, production, freight costs and inventories.

“A record 83% of multifamily developer respondents reported construction delays in the jurisdictions where they operate,” the National Multifamily Housing Council (NMHC) reported on June 9, based on its May 17-June 1 survey of 135 firms. “Of this group, 80% reported experiencing delays in permitting, up slightly from the 77% in round six [conducted March 27-April 1] and comparable to the results seen in the earlier rounds. Survey respondents reporting construction delays also indicated a significant pause in starts, with a similar 80% still reporting delayed starts over one year into the pandemic. The main reasons cited for delays in starts were permitting, entitlement, and professional services (70%); projects not being economically feasible at this time (56% [, up from 30% in round six]); and economic uncertainty (27%).

Two measures of construction starts (dollars) posted divergent year-to-date results for the first five months of 2021 compared to January-May 2020. Total construction starts fell 1% in May at a seasonally adjusted annual rate, but unadjusted starts soared 13% year-to-date, Dodge Data & Analytics reported on Wednesday. Nonresidential building starts leaped 10% in May but were down 5% year-to-date (institutional, -9%; commercial, -7%; manufacturing, 42%). Nonbuilding starts rose 5% for the month and 8% year-to-date (highway and bridge, -10%; environmental public works, 37%; utility/gas, 25%; miscellaneous, 11%). Residential starts tumbled 10% in May but jumped 30% year-to-date (single-family, 37%; multifamily, 12%).

Construction starts, not seasonally adjusted, inched up 0.5% y/y in May from May 2020, when many projects were halted due to the pandemic, data firm ConstructConnect reported on May 17. Year-to-date starts for January-May 2021 dipped 0.4% from the same months in 2020. Year-to-date nonresidential starts slumped 14%: nonresidential building starts plunged 20.5% (commercial, -45%; institutional, -16%; and industrial [manufacturing], -17%), while engineering (civil) starts fell 3.8% (including road/highway, -1.3%, and water/sewage, 12%). Residential starts soared 21% (single-family, 32%, and apartments, -2.5%).

Housing starts (units) increased 3.6% at a seasonally adjusted annual rate from April to May and 50% y/y from the pandemic-depressed May 2020 level, the Census Bureau reported on Wednesday. Year-to-date starts for January-May 2021 climbed 25% from the same months in 2020. Single-family starts rose 4.2% for the month and 31% year-to-date. Multifamily (five or more units) starts rose 4.0% for the month and 12% year-to-date. Residential permits slipped 3.0% from April but jumped 33% year-to-date, as single-family permits declined 1.6% for the month but rose 38% year-to-date, while multifamily permits declined 7.7% from April but gained 21% year-to-date.

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Geotechnology Wins Top Places to Work Award

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Geotechnology, Inc. has been named a winner of the 2021 Greater St. Louis Top Workplaces award program, which is sponsored by the St. Louis-Post Dispatch.

Winners of the award are chosen solely based on employee feedback gathered through a third-party employee engagement technology company. The anonymous survey measures culture drivers that are critical to the success of any organization such as alignment, execution and connection. 

Geotechnology, whose corporate headquarters is in St. Louis, also has central regional locations in Overland Park, Kansas, and Fairview Heights, Illinois, in addition to offices in Tennessee, Arkansas, Mississippi, Kentucky and Ohio. With a staff of over 260, the company provides a comprehensive range of consulting services in applied earth and environmental sciences; exploration; geotechnical engineering; underground consulting services; soils, rock, and construction materials testing; non-destructive testing; special inspections; geophysics and deep foundation testing.

“We are honored to receive this award,” said Joel Weinhold, P.E., Geotechnology’s Central Regional Manager. “Our goal is to hire the most qualified people, provide them with meaningful work, and help them to succeed personally and professionally. Our employees are our most valuable assets and we appreciate them. Their hard work has contributed to us successfully being a trusted advisor to our clients and a leader in our communities.”

Geotechnology Holdings is a corporation whose companies offer a comprehensive range of consulting services in applied earth and environmental sciences. Established more than 36 years ago, Geotechnology, Inc. provides engineering, environmental, geophysical and materials testing services. Geotechnology Exploration, LLC provides drilling services and Geotechnology Living, LLC provides professional services on multi-family, senior living and other housing-type projects. The Geotechnology family of firms has been part of thousands of major construction projects in the Midwest and Mid-South regions and is ranked in ENR’s Top 500 Design Firms. Based in St. Louis, Missouri, Geotechnology has offices in Missouri, Illinois, Kansas, Ohio, Kentucky, Tennessee, Mississippi and Arkansas. For more information, visit www.geotechnology.com

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Prime Ferguson Site Future Home to Burlington Coat Factory

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

A well-traveled stretch in the City of Ferguson is preparing to welcome Burlington Coat Factory and additional tenants.

St. Louis-based Pernikoff Construction Company began a gut rehab in March 2021 of the 50,000-square-foot building on the site at W. Florissant Avenue and Interstate 270 that once held a Toys R Us retail store. Pernikoff Construction President Jeff Pernikoff said the City of Ferguson proactively worked with the developer and general contractor to make the deal happen so construction work could begin swiftly. The design-build project is on schedule to reach completion in late July.

“We can’t say enough about how terrific the City of Ferguson has been to work with,” said Pernikoff.

Burlington Coat Factory’s newest St. Louis area location will face south along West Florissant. The contractor has partitioned a dividing wall to create storefronts facing east to accommodate additional national retail tenants which have not yet been announced. Burlington will occupy approximately 29,000 square feet.

City of Ferguson Director of Planning and Development Eliot Liebson said the city has been ready to welcome new development to the site for more than four years, but Toys R Us was working its way through bankruptcy-related debt before selling the property.

More than 100,000 people live within a 3-mile radius of the Burlington site in Ferguson, according to Liebson, and more than 40,000 daytime employees work within a 3-mile radius.

“The traffic count at this intersection is more than 160,000 vehicles per day,” said Liebson. “We have every confidence that we’re going to fill the building up. Burlington is here because they know these numbers. Every week, I receive two to three inquiries from developers and site selectors about available opportunities in our city. Developers and owners know that Ferguson is a place where people can do business.”

Additional construction project partners include Reinhold Electric, Albert Arno, Sub Trio Plumbing, Accurate Fire Protection, Crafton Contracting, B & C Painting, Countryside Flooring and Bethalto Glass.

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Local Construction Contractors and Unions Voluntarily Restore Deteriorating Park in Berkeley

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Berkeley, MO, June 16, 2021 – Short Park in Berkeley has received more than $50,000 in renovation work and new facilities thanks to the SITE Improvement Association.  Over the past 18 months, dozens of SITE Improvement Association members and labor union counterparts came together to donate money, time, labor, and resources to improve Short Park, which had fallen into disrepair to the point where the community was deprived of a quality park for outdoor recreation and play.  On June 3, SITE and the city of Berkeley held a Grand Reopening of the park for the community featuring entertainment, food and athletic ball giveaways.

The project was the idea of the Young Executives of SITE (Y.E.S.), a group of emerging leaders whose ages range from 21-40. Past-Chairman of the group, Chris West, Vice President of NB West Contracting, Co., said conversations between Mr. West and Missouri State Senator Brian Williams (D-University City) led the group to the area around Berkeley. 

“One day I drove by Short Park to find 6-8 kids literally playing in the street, adjacent to the Park,” said West.  “Our group’s intention was to not only give back to the Community, but to expose and inspire those young kids to pursue a career in Construction.  If we can give young kids a fun place to play, and show them that construction is a fun career, then we hopefully are inspiring our next generation of the workforce and construction company owners. 

SITE members excavated a parcel of the property in Berkeley and installed over $50,000 in new playground equipment and a new picnic Pavilion.  New concrete sidewalks were installed, a new soccer/football goal was put in place and an existing basketball court was resurfaced and enhanced with new hoops. Private donations from St. Louis area contractors and suppliers and local labor groups Missouri/Kansas Laborers District Council, Cement Masons Local 527 and Operating Engineers Local 513 were collected in 2019 to make this project a reality.

“The Berkeley Council appreciates the time and resources in renovating Short Park,” said Babalunde Deinbo, Mayor of Berkeley.  “SITE Improvement Association has made the park an improved recreational asset for our residents. Thank you.”

“Part of SITE’s mission is to make the St. Louis Metro area a better place to build, a better place to work, and a better place to live. We are celebrating our mission by officially re-opening Short Park.” said Jeremy Bennett, Executive Director of SITE. “Because of the efforts of SITE Members, labor union counterparts, the City of Berkeley, local elected officials and other community leaders, this park went from a barren parcel to a place that children and families can enjoy now and into the future. A career in construction can pay off and it shows through this beautiful restoration of Short Park.”

SITE Improvement Association is a local trade association representing over 220 construction contractor owners and suppliers in the St. Louis Metro region.  SITE Contractors primarily perform land development work including road and bridge, sewer and utility, excavation, landscaping, and specialty construction. Additional information can be found at https://sitestl.org/news/short-park/ or by contacting Jeremy Bennett at (314) 966-2950 or jeremy@sitestl.org.

Photo Above:  The ribbon cutting at the Short Park Grand Reopening Event on June 3, 2021 included several Berkeley residents joined by Jeremy Bennett, Executive Director of SITE, Chris West of NB West Contracting Co., Berkeley Councilwoman Brenda Williams, Berkeley Councilwoman Willie Mae Anthony, State Senator Brian Williams, St. Louis County Council Chairwoman Rita Heard Days and Missouri Kansas Laborers District Council Business Manager Brandon Flinn.

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