John Deere Adds Industry-Leading 20,000-Hour Warranty on 944K Hybrid Wheel Loader Power Electronic Components

On the heels of its most successful CONEXPO-CON/AGG ever, John Deere is now offering a 96-month (eight-year)/20,000-hour power electronic components warranty on the 944K hybrid wheel loader. The warranty is retroactive to existing machines in the field and provided on new 944K loaders through October 31, 2018.

“We continue to build confidence in our hybrid technology and the high-design life of machine components,” said Jason Daly, director, customer and product support, John Deere Construction & Forestry. “As our hybrid experience continues to grow, we feel strongly that this 20,000-hour warranty allows a customer the opportunity to go through a 15,000-hour rebuild/re-life without the expense of worrying about power electronic components.”

The warranty includes a 96-month (eight-year) or 20,000-hour (whichever comes first) non-prorated assurance on wheel motors, generators, power inverters and brake retarders. Certain customer conditions must be met to maintain warranty coverage. This includes component rotation between 15,000 and 18,000 hours; drive voltage cables replacement between 15,000 and 18,000 hours; and an annual dealer machine inspection.

The 536 horsepower 944K hybrid wheel loader features an EPA Interim Tier 4 engine (IT4), and it can provide significant fuel savings over 9-yard3 loaders with conventional drivetrains*. The production-class wheel loader’s brushless AC generators and motors, water-cooled brake resistors and solid-state power electronics deliver reliable, long-term performance to quarry and large-load applications.

For additional information, visit http://www.deere.com/Quarry or contact your local dealer.

*Actual fuel consumption rates and savings will vary with machine application, utilization, operator and model of competitive unit.

Dodge Data & Analytics Reports: March Construction Starts Climb 5 Percent

 

Public Works Lifted by Two Large Pipeline Projects; Multifamily Housing, Offices, Airport Terminals Also Advance

New construction starts in March increased 5% to a seasonally adjusted annual rate of $743.7 billion, marking the third straight monthly gain, according to Dodge Data & Analytics.  The total construction growth in March was led by the nonbuilding construction sector, and particularly by public works which featured the start of two large pipeline projects – the $4.2 billion Rover natural gas pipeline in Ohio and Michigan, and the $2.5 billion Mariner East 2 propane and natural gas liquids pipeline in Pennsylvania.  Residential building in March registered moderate growth, helped by a rebound for multifamily housing after a subdued February.  Nonresidential building in March held steady with its February pace, as strong activity for office buildings and airport terminals offset a steep drop for manufacturing plants.  Through the first three months of 2017, total construction starts on an unadjusted basis were $160.1 billion, down 3% from the same period a year ago (which included heightened activity for manufacturing plants and electric utilities/gas plants).  If the often volatile manufacturing plant and electric utility/gas plant categories are excluded, total construction starts during the first three months of 2017 would be up 8% relative to last year.

The March data produced a reading of 157 for the Dodge Index (2000=100), compared to 149 in February and 147 in January. After sliding to a weak 129 in December, the Dodge Index over the next three months bounced back 22%.  On a quarterly basis, the Dodge Index averaged 151 during this year’s January-March period, up 9% compared to the 139 average for the fourth quarter of 2016.  “The pattern for construction starts in early 2017, with three straight monthly gains, is the reverse of the three straight monthly declines that closed out 2016,” noted Robert A. Murray, chief economist for Dodge Data & Analytics.

“While the construction start statistics will frequently show an up-and-down pattern, whether month-to-month or quarter-to-quarter, the improved activity in this year’s first quarter provides evidence that the construction expansion is still proceeding,” Murray continued.  “This year’s first quarter has seen nonresidential building and public works rebound from the loss of momentum each experienced towards the end of 2016, helped respectively by the strong activity so far in 2017 for new airport terminal projects and new pipeline projects.  Nonresidential building in 2017 should be able to stay on its upward track, supported by further growth for such institutional project types as school construction.  As for public works, it’s also expected to show improvement over the course of 2017, although its prospects are less certain given its connection to legislative developments at the federal level.  This includes how Congress will deal with the continuing resolution for fiscal 2017 appropriations scheduled to expire at the end of April, and whether a new federal infrastructure program will get passed this year.”

Nonbuilding construction in March jumped 16% to $195.7 billion (annual rate), following its 35% hike in February.  The public works sector surged 33%, reflecting an 82% increase in March for the miscellaneous public works category that includes such diverse project types as site work, pipelines, mass transit, and outdoor sports stadiums.  The $4.2 billion Rover natural gas pipeline was included as a construction start in March, and is located mostly in Ohio and Michigan with smaller portions in West Virginia and Pennsylvania.  Also reported as a March start was the $2.5 billion Mariner East 2 Pipeline, located mostly in Pennsylvania with smaller portions in West Virginia and Ohio, which will transport propane and other natural gas liquids from the Marcellus Shale natural gas fields in southwestern Pennsylvania to a processing and distribution facility near Philadelphia.  The start of a $300 million stadium in Washington DC for the DC United soccer team also contributed to the substantial March increase for miscellaneous public works.  Highway and bridge construction in March edged up 1%, essentially holding at the improved volume achieved with its 38% jump in February.  Large highway and bridge projects entered as March construction starts were a $399 million bridge replacement in the Pensacola FL area, the $266 million Sixth Street Viaduct replacement in Los Angeles CA, and a $192 million highway expansion project in San Antonio TX.  River/harbor development in March advanced 32% from its lackluster February amount, while sewer construction was unchanged and water supply construction slipped 2%.  The electric utility/gas plant category in March retreated 54%, although it did include as construction starts a $300 million wind farm in Ohio and a $175 million solar farm in Virginia.

Residential building, at $310.8 billion (annual rate), grew 4% in March.  Multifamily housing provided the upward push, rebounding 26% after a 23% setback in February.  There were six multifamily projects valued at $100 million or more that reached groundbreaking in March, led by a $200 million apartment building in Washington DC and a $150 million apartment building in New York NY.  Through the first three months of 2017, the top five metropolitan areas in terms of the dollar amount of multifamily starts were the following – New York NY, Los Angeles CA, Washington DC, Chicago IL, and Atlanta GA.  During this period, the New York NY metropolitan area accounted for 18% of the national multifamily total, up slightly from the 17% share for full year 2016 but down from the 25% share for full year 2015.  Single family housing in March receded 3%, which followed modest improvement reported during the previous five months.  By region, single family housing in March showed this pattern – the Midwest, down 9%; the West and South Central, each down 3%; and the South Atlantic, down 2%; while the Northeast ran counter with a 3% gain.

Nonresidential building in March, at $237.2 billion (annual rate), was essentially unchanged from its February pace.  The institutional side of the nonresidential building market grew 3% in March, with much of the support coming from an 83% surge for the transportation terminal category.  Large airport terminals that were reported as March starts included two at Los Angeles International Airport – the $1.9 billion Delta relocation to Terminals 2 and 3 and the $961 million Midfield Satellite Concourse North (phase 1).  Also entered as a March start was the $110 million Terminal 2 modernization at Fort Lauderdale-Hollywood International Airport.  Through the first three months of 2017, the dollar amount of new airport terminal projects was $9.0 billion (including the $3.4 billion Central Terminal Building at New York’s LaGuardia Airport), easily topping the $3.7 billion in new airport terminal starts for full year 2016.  Healthcare facilities in March increased 13%, aided by the start of these large projects – the $265 million Methodist University Hospital in Memphis TN and the $230 million North Alabama Medical Center in Florence AL.  Also strengthening in March were religious buildings, up 9%; and public buildings (courthouses and detention centers), up 4%.  On the negative side, educational facilities in March dropped 14% after February’s 11% gain, although March did include these noteworthy projects as construction starts – a $289 million research institute building in Seattle WA, a $170 million library and classroom facility at Temple University in Philadelphia PA, and a $138 million science building renovation at the University of Virginia in Charlottesville VA.  Also retreating in March was the amusement and recreational category, which fell 29%.

The commercial side of the nonresidential building market increased 7% in March, showing improvement after a 10% drop in February.  Office construction climbed 41%, lifted by the start of five projects valued each in excess of $100 million.  These were led by the $525 million East Campus Building 2 at the U.S. Army installation at Fort Meade MD, the $289 million LG corporate headquarters in Englewood Cliffs NJ, and a $228 million office building in Seattle WA.  Commercial garages also advanced in March, rising 12%.  In contrast, March witnessed declines for hotels, down 7%; stores and shopping centers, down 8%; and warehouses, down 14%.  The manufacturing plant category in March plunged 65%, after being lifted in February by the start of a $985 million refinery modernization in Richmond CA.

The 3% decline for total construction starts on an unadjusted basis during the first three months of 2017 relative to last year was due to a varied pattern by major sector.  Nonbuilding construction dropped 17% year-to-date, with electric utilities/gas plants down 72% while public works climbed 20% (reflecting the start of several large pipeline projects in early 2017).  Residential building slipped a modest 1% year-to-date, with multifamily housing down 18% while single family housing grew 9%.  Nonresidential building registered a 7% gain year-to-date, with institutional building up 35%, commercial building down 9%, and manufacturing building down 44%.  By geography, total construction starts in the first three months of 2017 showed reduced activity relative to last year in two regions – the South Central, down 26%; and the Northeast, down 3%.  Total construction gains year-to-date were reported in the West, up 1%; the South Atlantic, up 11%; and the Midwest, up 12%.

Further perspective comes from looking at twelve-month moving totals, in this case the twelve months ending March 2017 versus the twelve months ending March 2016.  On this basis, total construction starts were up 2%.  By major sector, nonbuilding construction decreased 8%, with electric utilities/gas plants down 40% while public works increased 6%.  Residential building rose 3%, as a 4% drop for multifamily housing was outweighed by a 7% gain for single family housing.  Nonresidential building advanced 7%, with institutional building up 14%, commercial building up 7%, and manufacturing building down 26%.

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About Dodge Data & Analytics: Dodge Data & Analytics is a technology-driven construction project data, analytics and insights provider. Dodge provides trusted market intelligence that helps construction professionals grow their business, and is redefining and recreating the business tools and processes on which the industry relies. Dodge is creating an integrated platform that unifies and simplifies the design, bid and build process, bringing data on people, projects and products into a single hub for the entire industry, from building product manufacturers to contractors and specialty trades to architects and engineers. The company’s products include Dodge Global Network, Dodge PlanRoom, Dodge PipeLine, Dodge SpecShare, Dodge BuildShare, Dodge MarketShare, and the Sweets family of products. To learn more, visit www.construction.com.

Construction Costs Rise for Sixth Consecutive Month in April, IHS Markit Says

Strength was evident in material and equipment categories, though weak in labor markets

Construction costs rose in April on price strength in materials and equipment, according to IHS Markit (Nasdaq: INFO) and the Procurement Executives Group (PEG). The headline IHS Markit PEG Engineering and Construction Cost Index registered 57.0 in April, the sixth consecutive month of rising prices, and up from the 53.9 reading in March.

The materials/equipment price index came in at 60.1, the first time since February 2013 that this sub-index went above 60. Ten of the 12 categories tracked in the materials sub-index showed rising prices; transformers and electrical equipment registered flat pricing.

Carbon steel pipe had the largest increase in the materials/equipment index this month when compared to March as higher steel input costs and better demand prospects pushed steel pipe prices higher.

“Higher steel input costs and better demand prospects are pushing steel pipe prices higher and will cause prices to escalate further over the next several months. Pipe imports have increased in response to rising demand and they will continue to trend upward and maintain a sizeable share of the market,” said Amanda Eglinton, senior economist at IHS Markit.

The current subcontractor labor index fell in April, coming in marginally below the neutral mark at 49.7. Regionally, U.S. Northeast had rising labor costs, while U.S. Midwest, South and West had flat pricing. Canada pulled the overall index down; in the Western region, prices were flat while in the Eastern regions labor costs fell.

The six-month headline expectations index recorded another month of increasing prices. The index moved up from 67.2 in March to 69.3 this month. The materials/equipment index stayed positive at 72.8, higher than the 70.6 recorded in March. Eight consecutive months of rising prices affirm widespread expectations of future higher costs. Expectations of future price increases were broad-based, with index figures for almost every component coming in well above neutral. Sub-contractor labor price expectations came in at 60.9 in April, higher than the 59.3 recorded in March. Labor costs are expected rise in all regions of the United States. They are expected to remain unchanged in Eastern Canada and to rise in Western Canada.

In the survey comments, respondents have noted shortages for some subcontractor labor categories. Participants continue to express cautious optimism for 2017, with the proposal activity index positive for nine months.

To learn more about the new IHS Markit PEG Engineering and Construction Cost Index or to obtain the latest published insight, please click here.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions.  Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

Wells Fargo New Jersey Labor Market Update: March 2017

New Jersey payroll employment slipped by 17,500 jobs in March while February’s gain was revised down to 10,900 jobs. The unemployment rate still dropped to 4.2 percent in March, matching its pre-recession low.

New Jersey’s Unemployment Rate Falls to 16-Year Low

Similar to the U.S. jobs report, March was a disappointing month for nonfarm payrolls in New Jersey, but the unemployment rate continued to drop. Nonfarm payrolls declined by 17,500 jobs during the month, with losses fairly broad based across the private sector. The largest cuts were in leisure & hospitality, professional & business services and trade, transportation & utilities. Some of the softness may have been temporary or weather-related, as the state was hit by a large winter storm during the March survey week. Most of the state’s major employment sectors added to payrolls over the past year, although construction hiring appears to have pulled back at bit, which bears watching.

New Jersey’s household employment data was less impacted by the weather and was much more positive. Notably, the state’s unemployment rate fell 0.2 percentage points to 4.2 percent which matched its pre-recession low. Civilian employment rose by 9,800 workers, while the labor force declined slightly. As a result, the number of unemployed declined. New Jersey’s unemployment rate is the lowest since May 2007. The state’s labor force participation rate is 2.7 percentage points lower, however.

NJ Employment Back to Pre-Recession Level: Now More Diverse

Benchmark revisions reveal that New Jersey payroll employment had actually surpassed its previous cycle high in September 2016, contrasting with previously published data. Now that the state has passed this milestone, we looked at how New Jersey’s employment base has changed over the past decade. Manufacturing employed 80,000 fewer workers in 2016 than in 2006, while government payrolls were down by 35,000 jobs. The combination of fallout from the housing bust and automation erased thousands of jobs in the finance, information and construction industries. A decade ago, New Jersey housed back office operations of financial firms in New York City— jobs vulnerable to automation and streamlining. Similarly, most of the decline in the information industry was in telecommunications and print publishing—sectors also impacted by changing technology.

New Jersey’s employment base is now more diverse, making it less exposed to industry-specific declines than a decade ago. The bottom chart illustrates that declines in government, manufacturing, construction, finance and information jobs were offset by gains in a broad spectrum of industries. Ambulatory health care, which includes outpatient care and doctors’ offices, saw the largest increase over the decade, followed by professional services, education and food services. Although it took New Jersey more than two years longer than the nation to rebuild its job base after the Great Recession, the diversification of the Garden State’s industrial base should make the state a little less cyclical than it has been in the past.

Source: U.S. Department of Labor and Wells Fargo Securities

Wells Fargo Minnesota Labor Market Update: March 2017

Employers added another 5,300 jobs in March across Minnesota following February’s 6,200-job gain, which was stronger than first reported. The unemployment rate fell 0.2 percentage points to 3.8 percent in March.

Strong Jobs Report for Minnesota in March

Non farm payrolls were up by 5,300 jobs in Minnesota, all of which were in the private sector. Government employment was unchanged on the month. Professional & business services payrolls rose by 4,900 jobs—most of the gain was in administrative positions. Management and professional & tech services added 1,100 and 300 jobs, respectively. Mining & logging added 400 jobs in March which brings its year-to-year gain to 861 jobs, a welcome contrast from this time last year when the Iron Range was cutting positions due to the decline in commodity prices. Manufacturers also added jobs in March which brought factory payrolls above their year-ago level for the first time in nine months. Construction hiring took a breather in March but remains one of the fastest growing sectors over the year, rising 5.6 percent.

Minnesota’s household employment data improved solidly. The jobless rate fell 0.2 percentage points to 3.8 percent, after holding at 4.0 percent for seven months. The drop results from a huge 10,00o-worker rise in civilian employment, which easily outpaced labor force growth. Minnesota’s employment-population ratio rose to a cycle-high of 66.9 percent.

Personal Care and Management Occupations Top Growth

The most recent Occupational Employment data show more Minnesotans work in health care, personal care services, management and computer & mathematics than a decade ago, while there are fewer office support, sales, production and construction workers. Production and office support jobs have become increasingly vulnerable to automation. By contrast, food services saw a large jump in its share of jobs nationwide over the past ten years, but not in Minnesota. There were 60 percent more personal services workers in Minnesota in 2016 than in 2006, however, the largest increase among occupation groups. This category counts personal care aides, where demand is being driven by the state’s older population. Unfortunately, personal care services median earnings were the second lowest, besting only food services workers.

There were also strong increases among Minnesota’s high-paying jobs. Minnesota’s increase in management positions over the past decade was particularly notable, with the category adding 36,300 positions and accounting for 28.5 percent of the new jobs over the decade. Management positions are the highest paying occupation category in the state. The typical management job earned $100,290 in 2016, 2.5 times the average job. Healthcare practitioners & technical workers, which include doctors, nurses, therapists and technicians—saw the third largest increase, while computer & math jobs saw the fourth largest rise over the decade. All this is good news for Minnesota’s highly-educated workforce. Conversely, the decline in production, construction, sales and administration positions means options have narrowed for those without advanced training or qualifications, which has hindered economic mobility within the state.

Source: U.S. Department of Labor and Wells Fargo Securities