manufacturing

Construction Industry Investment Declines, Hiring Slows Due to Talent Scarcity

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

For 10 of the past 12 calendar quarters, investment in nonresidential construction has declined.

According to an analysis released in early November by the Associated Builders and Contractors, investment in nonresidential structures fell at an annual rate of 15.3 percent in the third quarter of 2022. ABC Chief Economist Anirban Basu says it’s the steepest decline since Q2 2020.

Investment in residential projects nationwide declined by a whopping 26.4 percent over the same time period.

Despite this decrease in investment, contractors building commercial and industrial projects expect their sales to rise over the next six months, according to the ABC’s Construction Confidence Index.

The association’s Construction Backlog Indicator – an index that reflects the amount of nonresidential construction work expected to be performed in the months ahead – shows that U.S. commercial and industrial contractors’ work backlog today averages nine months, 1.4 months longer than a year ago. Contractors attribute increased backlog to a hefty increase in heavy industrial projects, including a 21.5 percent increase in manufacturing-related construction spending.

As far as construction talent is concerned, the Associated General Contractors of America reports that last month the industry added only 1,000 employees nationwide. The industry continues boosting wages for hourly workers as firms battle to locate and hire qualified workers from a still-shrunken labor pool.

Hourly earnings rose from $33.41 in October 2021 to $35.27 in October 2022.

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O’Fallon, MO Manufacturer Prepares for Expansion

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

VSM Abrasives is breaking ground this week on its second expansion within three years.

The O’Fallon, MO-based manufacturer of coated abrasives for the industrial processing of metal and wood-based materials is expanding its local plant by another 50,000 square feet, according to President Brent Barton. The company is located at 1012 East Wabash Street.

Musick Construction Co. will build the expansion, working in tandem with M+H Architects.

“Despite the difficulties of COVID-19, VSM has experienced significant growth over the past few years,” Barton said. “This expansion will allow us to accommodate our growth and better serve our future needs. This will positively impact our customers, employees and the surrounding St. Charles County community.”

The construction project is anticipated to wrap up in late 2022.

Headquartered in Hannover, Germany, VSM Abrasives has grown to 800 employees worldwide with 13 international subsidiaries. The O’Fallon, MO location is the only subsidiary within the U.S., employing more than 130 individuals and 150 globally.

During 2019, VSM expanded its office space in O’Fallon.

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“Buy Clean” Task Force to Incentivize Lower Carbon Emissions in Manufacturing

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

The Biden administration this week announced its Buy Clean Task Force as part of several initiatives intended to decarbonize manufacturing while boosting the U.S. economy.

On Feb. 15, the administration launched the task force comprised of representatives from the U.S. Depts. of Defense, Energy and Transportation, the U.S. General Services Administration and the White House Office of Management and Budget.

Identifying materials to prioritize for consideration in federally funded construction projects is a major thrust of the new task force. The group will study impacts across the materials’ lifecycles, including manufacturing. Launching pilot programs to boost federal procurement of cleaner construction materials is also within the new entity’s purview.

The task force will also seek to increase transparency of emissions produced by the manufacturing of building materials through supplier reporting through incentives and technical assistance for U.S. manufacturers to help them improve reporting and reduce embodied emissions.

The federal government is the world’s largest buyer of goods and services, with an annual purchasing power of more than $650 billion. Lindsay Baker, CEO of the International Living Future Institute, says the U.S. government can move markets and convince manufacturers to engage.

“As more buildings pursue net zero, the share of carbon pollution coming from materials choices will continue to grow,” said Baker. “Buy Clean approaches are critical, both to daylight the big differences in carbon intensity among and across materials and to drive purchasing power at low-carbon options.”

Steel Manufacturers Association VP of Environment and Sustainability Eric Stuart says the U.S. steel sector – which produces the lowest CO2 emissions per ton of steel of the world’s top seven steel producing countries – stands to benefit from a government-structured buying program that recognizes the value of greener products.

“Investments in electric arc furnace steelmaking in the U.S. have resulted in a process that emits only one-third of the greenhouse gas emissions of more traditional processes,” he said. “We’re excited to see the government coming around to recognizing that value and making decisions that will help use U.S. tax dollars to purchase domestically produced materials.”

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