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AGC Urges Industry to Garner Support From Users for Federal Highway Funding

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

The Associated General Contractors of America says Tuesday’s agreement between President Donald Trump and House and Senate Democrats to work together on a $2 trillion highways, roads, bridges and rail investment program builds the beginning of momentum that will need to accelerate to make a big, bold federal transportation initiative a reality.

“We’ve got a long road – pun intended – ahead of us before we reach agreement on an infrastructure spending bill,” said AGC Spokesman Brian Turmail, “but the fact that this bipartisan agreement has been forged amidst other pressing (non-transportation-related) issues on Capitol Hill is encouraging. Now we need to keep the momentum going toward creation and passage of a broad-based infrastructure package long before the current program expires in September 2020, because by then we’ll be in the middle of an election year.”

The AGC of America and its affiliates across the U.S. – including the AGC of Missouri – are advocating for a bill that does more than fund road, rail and bridge projects. The organization wants to see a solid workforce development component as well, according to Turmail.

“Yes, we’ve got to fix the Highway Trust Fund, which is based upon a user-pay system that is fundamentally American,” Turmail said, noting that the revenue that funds the fund – 18.4 cents per gallon of gasoline purchased – hasn’t been updated since 1993. “But we think the infrastructure package also needs to include workforce development since creating jobs through these construction projects is paramount. What better opportunity to marry these investments in infrastructure than with the ability to create well-paying jobs?”

Construction industry members can help further development and passage of a new, multi-year federal transportation infrastructure funding bill, he said, by engaging support from individuals and organizations beyond the construction sphere.

“One of the things our AGC members and lobbyists hear all the time (from Congress) is, “’We hear from construction industry people all the time, but we also need to hear from others outside your industry such as those who use our highway system,’” Turmail said. “We’re asking AGC members to ask shippers, manufacturers, drivers and consumers – neighbors, church friends and others – to contact their federal elected officials and communicate the importance of maintaining our transportation system for all.”

The nation’s current multi-year transportation funding program, Fixing America’s Surface Transportation Act (FAST) was signed into law by former President Barack Obama in December 2015, authorizing $305 billion over fiscal years 2016-2020.

Many Craft Jobs Remain Hard To Fill, AGC Survey Finds; PPI Rises For Construction, Some Inputs

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Filling craft positions and some salaried positions remains as great a challenge for contractors as it was a year ago, according to participants in AGC’s 2017 Workforce Survey, released on Tuesday. (The site includes results by region and some states. Breakouts by firm size, union/nonunion, and project type will be added soon.) Of the 1,608 respondents, 70% stated they were having a hard time filling some hourly craft positions. In addition, 38% said they were having a hard time filling some salaried field positions; 35%, salaried office positions; and 16%, hourly office positions, while 9% reported no trouble filling any positions and 8% had no openings to fill. (These shares were all within two percentage points of the 2016 results.)

The hardest craft positions to fill were carpenters, reported by 58% of firms that currently employ them (vs. 60% in 2016); electricians, reported by 53% (also 53% in 2016); bricklayers, 53% (up from 45% in 2016); concrete workers, 51% (49% in 2016) and plumbers, 50% (also 50% in 2016). Respondents reported less difficulty in finding two types of craft workers: roofers (reported as difficult by 41% in 2017 vs. 50% in 2016) and installers–sheet metal (31% vs. 45%). As in 2016, the hardest salaried positions to fill were project managers/supervisors, 48% (50% in 2016); estimating personnel, 32% (31% in 2016); and engineers, 28% (also 28% in 2016). Half of respondents said their firms increased base pay rates for hourly craft workers (vs. 48% in 2016) and 43% did so for salaried workers (also 43% in 2016) because of difficulty filling positions.

More firms than in 2016 paid incentives/bonuses: 24% of respondents (vs. 20% in 2016) did so for hourly workers and 30% (vs. 27%) for salaried workers. Similar to 2016, about one-fifth of firms increased their portion of benefit contributions and/or improved employee benefits (hourly 20%; salaried, 21%). To add to their labor supply, firms turned to: overtime hours, 47% of respondents; in-house training, 46%; subcontractors, 41%; interns, 35%; engage with career-building programs, 27% (down from 37% in 2016, the only method with a substantial change in share); executive search firms, 23%; labor suppliers (craft), 22%; staffing firms and professional employer organizations (non-craft), 19%; and unions, 17%.

Some firms used these substitutes for labor: labor-saving equipment, tools or machinery, 22% of firms; lean construction, 15%; offsite prefabrication, 13%; virtual construction methods such as building information modeling, 7%. These shares also were close to 2016 levels.

The producer price index (PPI) for final demand in July, not seasonally adjusted, dipped 0.1% from June but increased 1.9% year-over-year (y/y) from July 2016, the Bureau of Labor Statistics (BLS) reported on August 10. AGC posted tables and an explanation focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction. The PPI for final demand construction, not seasonally adjusted, rose 1.1% for the month and 3.2% y/y. The PPI for new nonresidential building construction–a measure of the price that contractors say they would charge to build a fixed set of five categories of buildings–climbed 3.1% y/y. Increases ranged from 2.4% y/y for office buildings to 2.4% for health care buildings, 3.8% for schools, 4.1% for warehouses and 4.5% for industrial buildings. PPI changes for new,
repair and maintenance work on nonresidential buildings ranged from 2.8% y/y for roofing contractors to 3.4% for electrical contractors, 3.5% for plumbing contractors and 3.7% for concrete contractors.

The PPI for inputs to construction–excluding capital investment, labor and imports–comprises a mix of goods (59%) and services (41%). This index increased 2.5% y/y. The PPI for all goods used in construction rose 3.0% y/y, as the sub-index for energy climbed 6.5%, while the PPI for goods less food and energy rose 2.6%. The index for services increased 2.1%. PPIs for inputs to seven types of new nonresidential structures had increases ranging from 2.3% for educational and vocational structures to 3.5% for power and communications structures. PPIs for inputs to new residential structures rose 2.7% y/y for single-family housing and 2.6% for multifamily. Materials important to construction that had notable one- or 12-month price changes include diesel fuel, 8.7% in July and 20% y/y; copper and brass mill shapes, 1.1% and 15%, respectively; steel mill products, 0.3% and 10%; gypsum products, 0.7% and 9.9%; aluminum mill shapes, -1.7% and 7.4%; and lumber and plywood, 0 and 5.2%.

Construction employment, not seasonally adjusted, rose from July 2016 to July 2017 in 259 (72%) of the 358 metro areas (including divisions of larger metros) for which BLS provides construction employment data, fell in 58 (16%) and was stagnant in 41, according to an AGC release on Wednesday. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers.) The largest gains again occurred in Riverside-San Bernardino-Ontario, Calif. (15,800 construction jobs, 17%) and the Los Angeles-Long Beach-Glendale division (11,200 construction jobs, 8%), followed by Portland-Vancouver-Hillsboro, Ore.-Wash. (9,300 construction jobs, 15%) and Las Vegas-Henderson-Paradise (9,200 construction jobs, 17%). The largest percentage gains occurred in Lake Charles, La. (21%, 4,300 construction jobs), followed by Lewiston, Idaho-Wash. (20%, 300 construction jobs); Riverside-San Bernardino-Ontario, Las Vegas-Henderson-Paradise and Madera, Calif. (17%, 300 combined jobs). The largest job losses again were in Houston-The Woodlands-Sugar Land (-8,300 construction jobs, -4%) and the Middlesex-Monmouth-Ocean, N.J. division (-3,100 combined jobs, -8%), followed by San Jose-Sunnyvale-Santa Clara, Calif. (-2,000 construction jobs, -4%). The largest percentage losses again occurred in Grand Forks, N.D.-Minn. (-22%, -1,100 combined jobs) and Danville, Ill. (-17%, -100 combined jobs). July employment was a record high for the month in 44 metros (dating back in most areas to July 1990); none set a new July low.

 

Three IBEW/NECA Projects are Finalists in the 2017 AGC Keystone Awards

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The Associated General Contractors (AGC) of Missouri is saluting three IBEW/NECA projects as finalists in its AGC Keystone Awards. This is the 20th anniversary for prestigious construction awards program.  Since 1997, nearly 100 IBEW/NECA projects have been honored as finalists.  The annual awards salute building excellence in a number of categories and represent the highest level of professionalism, craftsmanship and quality in construction by Missouri’s general and specialty contractors.  This year, the IBEW/NECA finalist include two projects from Guarantee Electrical Co. and one from PayneCrest Electric, Inc.

Guarantee is being honored for its work on St. Joseph Hospital West Campus Expansion for SSM Health in Spanish Lake, Mo. and the McKendree Metro Rec Plex for McKendree University in O’Fallon, Ill.

PayneCrest is saluted for its work on the Washington University School of Medicine (WUSM) Mid-Campus Center, a mammoth 12-story, 517,000-square-foot medical building completed on an extremely tight site in the midst of the BJC/Washington University campus renewal project.

The finalists will now compete in several categories to earn AGC Keystone Awards.  Winners will be announced at the AGC’s annual construction gala on Thursday, Nov. 9, 2017 at the Ameristar Spa & Casino in St. Charles.  For more information on the Keystone Awards, visit www.agcmo.org.

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