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Uncertainty Clouds Our View

Wells Fargo Securities Economics Group 2020 Annual Economic Outlook

The current economic upswing in the United States, which has been in place since July 2009, is the longest continuous expansion since at least the mid-1850s. Although there is a popular perception that the U.S. economy is “due” for a recession, the passage of time does not necessarily make an economy more vulnerable to a downturn. Indeed, our base-case scenario calls for the U.S. economic expansion to continue through the end of our forecast period in Q4-2021, and we forecast that economic growth will remain positive over that period in most major foreign economies as well. But as the title of this report indicates, there are a number of notable uncertainties that cloud our vision at present. In our view, an economic downturn is not likely in the foreseeable future, but one is more than just a remote possibility. 

Recessions happen in one of two ways. First, an “exogenous” shock can lead to an economic contraction. For example, the moonshot in oil prices that occurred in the aftermath of the OPEC oil embargo in late 1973 was the proximate cause of the deep downturn in the U.S. economy in 1974 and 1975. A near trebling of oil prices in the months following the Iraqi invasion of Kuwait in July 1990 contributed to the 1990-1991 contraction in U.S. real GDP. But many exogenous shocks are difficult if not impossible to foresee, and most forecasters generally refrain from incorporating them explicitly in their outlooks. 

Second, economies can also slip into recession when imbalances build up in an important sector, such as housing in the previous decade or the tech sector in the 1990s. A sudden unwinding of these imbalances can then lead to an economy-wide downturn. A hallmark of the current expansion in the U.S. economy is its relative lack of large and noticeable imbalances. Consequently, our base-case scenario calls for the U.S. economy to continue to expand. That said, the 2 percent or so GDP growth rates that we forecast for next year and 2021 are hardly robust. Similarly, we look for the global economy to continue to expand through at least the end of 2021, but the 3 percent growth rates that we look for over the next two years are slower than the 3.5 percent per annum growth rate that the global economy has averaged since 1980. 

Uncertainties related to the U.S.-China trade war have held back investment spending in the United States in recent quarters, and sluggish growth in capex spending has acted as a governor on overall GDP growth in the U.S. economy. However, strong fundamentals in the household sector have continued to support solid growth in consumer spending. In our view, trade policy uncertainties, which have weighed on investment spending, are not likely to dissipate anytime soon. Although the United States and China may very well agree to a Phase I trade deal, we are skeptical that the two sides will come to agreement on a comprehensive deal that returns tariffs to their pre-trade war levels, at least not in the foreseeable future. Consequently, we forecast that growth in investment spending in the United States will remain lackluster. 

If our base-case scenario of modest U.S. economic growth in the next two years is reasonably accurate, then the Federal Reserve likely will refrain from tightening monetary policy over our forecast period. Our base-case scenario looks for the Federal Open Market Committee (FOMC) to cut rates one more time (by 25 bps) in early 2020. We then look for the FOMC to maintain the resulting target range for the fed funds rate of 1.25 percent to 1.5 percent through the end of 2021. 

Growth in investment spending in many foreign economies likely will also remain sluggish as long as trade tensions between the United States and China, the two largest economies in the world, continue to linger. And with monetary accommodation in many major foreign economies at its limits and with policymakers in those economies unable or unwilling to undertake expansionary fiscal policies, meaningful acceleration in foreign economic activity does not seem very likely. Although monetary policy in major foreign economies probably will not become significantly more accommodative, central banks in those economies likely will not be tightening policy anytime soon either. 

The trade-weighted value of the U.S. dollar is more or less unchanged on balance relative to a year ago. Although the Federal Reserve has cut rates by 75 bps since July, most major central banks have continued to maintain extraordinarily accommodative policy stances. With interest rates expected to remain historically low for the foreseeable future, foreign exchange market participants may well look toward economic growth differentials for insight into currency market moves. With U.S. economic growth expected to slow further, at least in the near term, and with foreign economic growth showing some signs of bottoming out, we look for the U.S. dollar to depreciate modestly over the course of the coming year.

But a Number of Uncertainties Remain 

As noted earlier, there are a number of uncertainties that cloud our outlook. For starters, trade negotiations between the United States and China could conceivably turn acrimonious again, which could lead to even higher tariffs. Not only would another increase in tariffs weigh further on investment spending, but higher prices for consumer goods would erode growth in real income that could exert headwinds on growth in consumer spending. On the other hand, negotiators from the two countries could conceivably reach a comprehensive trade deal that leads to the complete removal of tariffs. In that event, the economic outlook would improve markedly. Unfortunately, trade policy outcomes are ultimately political decisions into which we have few insights. In other words, our vision regarding the political decisions that will determine trade policy is clouded. 

There are also uncertainties related to the November 2020 U.S. election to consider. There currently are a record number of individuals seeking the Democratic nomination for president, and their policy proposals span a wide range from center-left candidates such as former Vice President Biden and Mayor Buttigieg to more progressive candidates such as Senators Warren and Sanders. President Trump likely would pursue a whole different set of policies than his Democratic rivals if he is re-elected for a second term. Although we do not opine on the candidates in this report, we offer a description of some of the major policy proposals of the frontrunners. There is also the make-up of the next Congress to consider, which is impossible to predict at this point. 

How will individuals and businesses react to the inherent uncertainty that the election imparts? Although we found that prior elections have not had a discernably negative effect on the U.S. economy, could the polarized nature of American politics today and the wide range of potential policy outcomes cause consumers and businesses to take a cautious approach to spending in 2020? 

The foreign economic outlook is not immune to uncertainties either. Much like the U.S. economy, the outlook in most foreign economies could be meaningfully affected by the different trade policy outcomes. That is, the outlook in these economies would brighten if trade tensions between the United States and China subside and, conversely, the outlook would darken if tensions ratchet up further. In addition, the U.K. parliamentary election results will have major implications for the Brexit process that has cast a cloud of uncertainty over the U.K. economy for more than three years. A Chinese crackdown in Hong Kong, should one occur, could impart a negative shock to global growth prospects. 

In sum, we believe that the economic expansion that has been under way in the United States for more than 10 years will continue for the foreseeable future, albeit at a subdued pace. Likewise, we forecast that economic growth in most foreign economies will remain modest over the next two years. But all economic forecasts, even in the best of times, are subject to at least a bit of uncertainty. In our view, the unsettled political and geopolitical environment at present imparts more uncertainty than usual into the economic outlook.

The Economic Outlook in an Environment of Uncertainty 

2019 was the year in which the U.S. economy broke the record for the longest economic expansion, and our forecast anticipates that this upswing can be sustained through 2021 provided a reasonable détente could be reached in the trade war. U.S. economic growth remained positive this year despite a global slowdown and a pervasive sense of uncertainty for business leaders and financial markets. Recent rate cuts from the Federal Reserve have returned at least a modest upward slope to the yield curve, alleviating one of the recession warning signs that was flashing yellow just a few months ago. A “settled rulebook for global trade,” as Chairman Powell referred to it, would go a long way in reducing the largest source of this uncertainty, though remarkably the trade war has not been the millstone some analysts feared it might be. The slump still under way in the manufacturing sector has not yet bled into the service economy in a major way or caused serious restraints in consumer spending.

All this is occurring alongside a relentless torrent of trade-related developments, including ongoing talks with China, the ratification of the USMCA and potential (though unlikely in our view) auto tariffs. Interestingly, this is frustratingly reminiscent of how the year began, with a 35-day shutdown that did not end until January 25, 2019. Of course, 2020 is also an election year, which could impart even more uncertainty as November 3 approaches.

Our baseline expectation is that a trade war alone will not bring the U.S. economy to its knees. Our forecast has the slow-growth expansion getting even weaker, at least in the near term, but – critically – we avoid recession. The nuances of the forecast come down to the outlook for trade – frustratingly, an unknowable factor as it is largely a political decision. If the trade war escalates much more than we presently expect and we do get a recession, then sending in the cavalry will be trickier than in prior cycles. The fiscal policy response could be limited by large and growing budget deficits. The monetary policy response would be bounded by the fact that the fed funds rate would be starting at a much lower point than in prior cycles. So as we make our case for where we see the U.S. economy heading, we also consider the upside and downside risks to our forecast from different trade policy assumptions. 

No Recession, Expansion Continues, Proceed with Caution 

We suspect that a comprehensive trade agreement will remain out of reach. But unlike 2019, when the cost of the trade war was progressively rising, we do not expect trade prospects to get meaningfully worse in 2020. 

Even without any deterioration with respect to the trade situation, we are looking for modest growth in the final quarter of 2019, with real GDP rising at an annualized rate of just 1.5 percent. Much of the weakness in the rate of GDP growth in Q4-2019 is due to sluggishness in business fixed investment spending and a continued drag from less inventory building. Residential construction activity, which is picking up slightly, is a silver lining in an otherwise cautious forecast. Given the tendency of homebuilding to have a multiplier effect, improvement in that sector may produce some additional follow-through into other areas of the economy. Even with our forecast for a weak fourth quarter, real GDP remains on track for a 2.3 percent calendar-year gain for 2019, right in line with the average annual growth rate for this expansion. 

Mark Twain once famously quipped that rumors of his death had been exaggerated. For now, Twain’s joke appears to be applicable to all the hand-wringing over imminent recession that gripped financial markets at various points earlier this year, culminating in a yield curve that remained inverted for weeks during the summer. Yet other than the pullback in manufacturing and some diminished confidence on the part of both businesses and consumers, the U.S. economy continues to expand. The FOMC has been proactive, cutting the federal funds rate 25 bps three times this year and providing needed liquidity to short-term funding markets by starting to expand its balance sheet again with purchases of short-term Treasury bills.

None of this is to suggest that slowdown fears were entirely misplaced. Job growth had indeed slowed throughout the first part of the year, but not declined outright even in the face of capital spending cuts, disruption in supply chains, Boeing problems with its 737 MAX, and the recently settled strike at General Motors. Given those challenges, the 128,000 new jobs originally reported in October was surprisingly resilient. Employers added an average of 193,000 jobs per month in the third quarter. But the most recent jobs report revealed renewed strength in the labor market. Employers added 266,000 jobs in November and October’s gain was revised higher by 28,000 jobs. We expect that the pace of hiring will slow going forward, but it defies the rumors of death for the longest expansion on record. 

Speaking of rumors, it takes little more than just a glimmer of hope to move the needle in financial markets these days in the context of a potential resolution to the trade war. The manufacturing sector is ready for an armistice. The ISM manufacturing index remained in contraction territory for the fourth straight month at 48.1 in November. Just the mere indication of a thawing in trade tensions in October lifted the export orders index 9.4 points to 50.4 in October – its largest one-month rise ever. But, the index gave back some of that gain in November, when the prospects of a Phase I trade deal subsided, falling back into contraction at 47.9. That October surge, however, indicates that capital spending could snap back quickly if the headwinds from the trade war truly subside. 

Beyond the capex outlook, households are in a relatively strong position today. The Conference Board’s index of consumer confidence peaked in October 2018, but it remains historically high and the household saving rate is currently around 8 percent. Wages and salaries may have decelerated somewhat, but they are still up at a 4.3 percent annualized rate over the past three months, enough to sustain solid growth in consumer spending. Interestingly, wages are rising fastest at the lower end of the income spectrum, where workers tend to spend a larger portion of their take-home pay.

Until consumer fundamentals return to where they were prior to the escalation of the trade war, we have only modest growth in our outlook, looking for real personal consumption expenditures (PCE) to rise at a rate of just 2.1 percent in Q4 and to remain near this growth rate throughout most of the forecast period. Due to low base effects after a particularly soft ending to retail sales in 2018, our 2019 holiday retail sales forecast looks for a 5 percent jump from the same period last year. The recent pick-up in home sales, should it be maintained, could be a factor that boosts consumer spending. Most of the improvement has been in new home sales, where builders have found ways to deliver homes priced for first-time buyers. We look for new home sales to rise 9.4 percent this year and to grow nearly 4 percent in 2020. 

Given the recent improvement in the economic outlook, doubts are surfacing as to whether the FOMC will cut rates any further. At least some members of the FOMC have not been on board with the three rate cuts that the Committee has already implemented. The presidents of the Boston and Kansas City Federal Reserve banks dissented at all three policy meetings, preferring to leave rates unchanged. Furthermore, Fed Chair Powell has observed that although “monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade.” 

Although the statement at the conclusion of the October 30 FOMC meeting acknowledged a “strong” labor market and an economy “rising at a moderate rate,” it also noted that both headline and core inflation are stuck below the Fed’s 2 percent target. The Committee pledged to monitor incoming information. In our view, the FOMC is signaling that it likely is nearing the end of its “mid-cycle” period of easing, but it also does not have a preconceived notion of how policy will necessarily evolve. Therefore, we are not convinced the FOMC is done cutting rates just yet. With real GDP appearing to grow at a sub­ 2 percent rate in Q4-2019 and an inflation rate that is having difficulty edging above 2 percent on a sustained basis, we think the Committee will decide to cut rates another 25 bps in Q1-2020. (This forecast was predicated, at least in part, on our assumption that additional tariffs were to be levied on December 15.). Financial markets are not priced at present for additional tariffs, and market volatility could return, which would tighten financial conditions. If, as we forecast, real GDP growth edges a bit higher later next year, then we think the Committee will decide that no further easing is needed. But we also forecast that the FOMC will refrain from raising rates for the foreseeable future. In other words, interest rates likely will remain low for quite some time. 

Downside Risk: What If the Trade War is Not Resolved? 

The trade war has already taken a toll on various measures of U.S. manufacturing activity. The ISM manufacturing survey has included references to the tariffs or trade war in every month of 2019. We have also seen weakness in hard data such as orders and shipments. Core capital goods shipments rose 0.8 percent in October, but that came after declining the prior three months, leaving the three-month annualized rate of growth for this category at -3.3 percent. It is difficult to get excited about a near-term turnaround in business investment given the fact that despite a 1.1 percent gain in October, core capital goods orders declined the prior two months and are down 1.8 percent on a three-month annualized basis. The most recent data mean equipment spending is poised for a slight rebound in Q4, but nevertheless the trend in orders growth remains generally uninspiring. When we look at forward-looking measures of equipment spending like surveys and capital expenditure plans, there is a similar lack of conviction on the part of purchasing managers.

There have been instances – for example in May – when prospects of a major trade deal between the United States and China appeared to be at hand only for the budding agreement to be scuppered. In prior instances of failed talks, the United States has upped the ante by either raising tariff rates or exposing a new category of goods to tariffs. If a new round of tariffs goes into effect in the future, then 97 percent of U.S. imports of Chinese goods will be subject to tariffs. Without much in the way of new categories to subject to tariffs, further increases in the tariff rates would appear to be the most likely next step. So if the gloves come off completely, it stands to reason that businesses will hunker down and put off any major spending plans until the dust has settled on trade policy. Supply chain disruption, not just in the United States but all over the globalized manufacturing system, would become more difficult to avoid.

Amid the backdrop of apprehension over the past year, solid growth in consumer spending has been a needed and sometimes vital counterweight to those fears. Dissenting voters in the FOMC have even pointed to the robust pace of consumer spending to raise doubts about the need for more accommodative monetary policy. Initial concerns that the tariffs would immediately lead to higher inflation and hit consumers’ wallets have proven to be ill-founded. Because the initial rounds of tariffs largely targeted intermediate goods, they have so far – and by design – avoided directly impacting the typical U.S. consumer. More recent rounds impact finished goods such as toys, clothing, and consumer electronics. This more direct consumer exposure gives this last round of tariffs the capacity to impact U.S. inflation and consumer spending more meaningfully than earlier rounds did.

Still, consumer spending will not necessarily crater just because tariffs may push up prices of consumer goods. A typical household devotes only a third of its overall spending to goods. The other two-thirds is devoted to services, which have not been subject to tariffs. But higher good prices will lead to lower sales of those items, or squeeze wallet share for other spending, including services. The saving rate could also recede as consumers would only be able to stretch a paycheck so far. 

Although further increases in tariffs likely would push up inflation, the FOMC probably would respond to any intensification in the trade war by cutting rates further. Tariff hikes probably would cause just a one-off rise in the price level. That is, inflation would not continue to climb steadily higher on an ongoing basis. But any slowing in consumer spending growth due to deceleration in real income would cause further slowing in overall real GDP growth. In our view, the FOMC would look through the one-off increase in the price level and would ease monetary policy further in an effort to cushion the economy from the tariff-induced weakening in real PCE growth.

Upside Risk: What If the Trade War is Resolved Amicably? 

If the United States and China actually agree to a comprehensive (i.e., more than just $40 billion or so of American exports of agricultural goods) trade deal, then there is scope for the economy to find a higher gear in the year ahead. Without political editorializing, it stands to reason that with the election approaching, the current administration could reap some benefit from an amicably resolved trade situation and the faster growth backdrop that would likely accompany it. 

The most vulnerable part of the economy in 2019 has been the retrenchment in capital spending and the production cuts and softening in manufacturing employment that have come with it. Based on the fact that the export orders component of the ISM posted a record monthly increase in October on the mere indication of a trade deal suggests to us that the manufacturing sector is like a coiled spring that is being held back, at least in part, by the difficulty of complying with an ever-changing list of imported goods subjected to tariffs. The survey data from the ISM corroborate a similar sentiment that we hear in client meetings and trade shows with businesses in the manufacturing sector. 

As noted previously, the consumer impact from the trade war is evident in two ways. The first is that confidence, while still elevated, has been knocked down from the highs of autumn 2018 before the trade war with China picked up in earnest. The second is the fact that the latest rounds of tariffs has the potential to meaningfully impact prices for consumer goods that were not previously subject to tariffs. Both of these factors would reverse if the United States and China were to agree to a trade deal. In such an environment, consumer spending could return to the healthier pace of growth that existed prior to the escalation of the trade war, perhaps on the order of 3-to-4 percent on an annualized basis. 

As the economic outlook improves, the case for further Fed easing would not be very compelling. In fact, the FOMC could even start to reverse its recent rate cuts. Such a complete trajectory reversal would be unlikely in 2020, particularly as the FOMC might wish to avoid any perception of monetary policy interference as the election approaches, but rate hikes could become more likely in 2021 in such a scenario.

The full 2020 Annual Economic Outlook is available at wellsfargo.com/economicoutlook

This feature appeared in the February 2020 issues of the ACP Magazines:

California Builder & Engineer, Construction, Construction Digest, Construction News, Constructioneer, Dixie Contractor, Michigan Contractor & Builder, Midwest Contractor, New England Construction, Pacific Builder & Engineer, Rocky Mountain Construction, Texas Contractor, Western Builder

Five Manufacturing Trends to Watch in 2020

By Mike Schmidt, AEM

Both the immediate and long-term future of the manufacturing industry will be defined by the development of several ever-evolving and cutting-edge trends and technologies. Many of these trends and technologies are poised to have a significant impact in 2020 and beyond, so it’s critically important for manufacturers to develop a keen understanding of what they are, how they will grow over time, and how they will impact those within the industry – both this year and in the future.

With that in mind, let’s look at five manufacturing trends to watch in 2020:

Wearable Technology

The rise of the Internet of Things (IoT) in industrial applications has given way to the increased prevalence of wearable technology in the manufacturing industry. Manufacturers of all types and sizes are increasingly looking into – and investing in – wearable devices with different sensors that can be used by their workforce.

According to a recent article from EHS Today, electronic features found in wearable devices allow for organizations to monitor and increase workplace productivity, safety and efficiency. In addition, employers are now readily capable of collecting valuable information, tracking activities, and providing customized experiences depending on needs and desires.

Improvements in bio-sensing now allow for health parameters such as body temperature, heart rate and blood oxygen levels to be monitored. Furthermore, employers now have the ability to leverage the data they obtain to complement welfare programs and reduce healthcare costs.

Factors leading to the increased adoption of wearable technology include portability, convenience, operational efficiency, and much more. Consumers use the technology for fitness and health tracking, mobile notifications at a glance, and even contactless payments. The business world has taken notice, and wearable technology is quickly becoming a fixture in manufacturing.

An article from Manufacturing.net notes that potential applications in the manufacturing sector include safety awareness and injury prevention, training, process improvements, situational awareness, augmented reality, remote management, as well as authentication and security planning.

Manager Technical Industrial Engineer working and control robotics with monitoring system software and icon industry network connection on tablet. AI, Artificial Intelligence, Automation robot arm

Predictive Maintenance

Effective equipment maintenance is central to the success of any manufacturer. So it goes without saying that the ability to predict impending failures and mitigate downtime is incredibly valuable. Predictive maintenance offers that and much more. Ultimately, it gives manufacturers the means to optimize maintenance tasks in real time, extending the life of their machinery and avoiding disruption to their operations.

Seebo outlines predictive maintenance for Industry 4.0 as a method of preventing asset failure by analyzing production data to recognize patterns and identify potential issues before they occur. Predictive maintenance for Industry 4.0 is a method of preventing asset failure by analyzing production data to identify patterns and predict issues before they happen.

Predictive maintenance isn’t without its challenges, however. In order to successfully build a predictive maintenance model, manufacturers must gain insights on the variables they are collecting and how often certain variable behaviors occur on the factory floor.

It’s absolutely critical for organizations to possess knowledge about each specific machine and a strong data set of previous failures in which they can review. Manufacturers also have to make decisions around lead time, as the closer to failure the machine is allowed to go, the more accurate the prediction.   

5G/Smart Manufacturing

The fourth Industrial Revolution isn’t coming. It’s already arrived. Smart factories are becoming the norm in manufacturing, and they rely on connected devices to leverage technologies like automation, artificial intelligence, IoT and more. In addition, these devices are capable of sensing their environments and interacting with one another. As factories of the future continue to grow and develop, manufacturers need to realize that they must be able to adapt the networks that connect them – efficiently and effectively.

According to a recent article from AT&T, 5G networks offer the industry opportunities to create new revenue streams. Along with energy and utility, the manufacturing industry stands to benefit the most from the rise of 5G. A report from Ericsson states that “the expected addressable market in 2026 will $113 billion, a substantial 7 percent potential revenue growth from current service revenue forecasts.”

The factories of tomorrow will rely greatly on sensor technology, and they will prominently feature connected tools, utilizing data to guide the tasks of the workforce. According to AT&T, 5G’s high capacity, wireless flexibility and low-latency performance make it the perfect choice to support manufacturers in these efforts.

Virtual Reality and Augmented Reality

When it comes to using augmented reality (AR) and virtual reality (VR) in manufacturing, the possibilities are endless. Whether it’s helping make processes more efficient, improving product design and development, or maintaining machinery more effectively, these technologies are capable of becoming game-changers in the coming years.

Virtual reality allows its users to move around a 360-degree virtual world and – in some cases – even interact with it. When using virtual reality, real, physical surroundings are no longer a factor. And, thanks to advancements in technology, the virtual world is now being reproduced better than ever before. Augmented reality differs in the sense that its users are required to be at a specific location to augment their experience of reality, while those who use virtual reality are completely immersed in a virtual world.

According to an article from PwC, manufacturers are becoming more adept at finding ways to incorporate these technologies within their organizations in an effort to drive a future defined by digital connectivity. And, says PwC, one in three manufacturers have adopted – or will adopt – virtual reality and augmented reality in the next three years.

Cybersecurity

The importance of cybersecurity in manufacturing cannot be overstated. More and more connected devices are being integrated into organizational processes each day, so it almost goes without saying that the manufacturing industry needs to develop a keen understanding of how to best deal with them.

As the industry becomes more connected with time, equipment manufacturers and their customers will be impacted in a number of ways. For example, even the simple act of charging a mobile device in a nearby USB port may lead to dire consequences. As a result, companies must be diligent in their efforts to educate employees on the potential consequences of their cyber activities.

The ability for a manufacturer to effectively protect itself today hinges upon its willingness to take the following two key steps: address organizational concerns and implement a clear and effective cybersecurity strategy.

Cybersecurity is – and will – remain a major concern for companies of all types and sizes. With malware attacks on the rise and many organizations having been negatively affected by the increased prevalence of ransomware, companies (both literally and figuratively) can’t afford to overlook cybersecurity as a top priority in 2020 and beyond.Looking for more information about the latest trends and technologies impacting the manufacturing industry in 2020 and beyond? Visit aem.org/think and subscribe to the AEM Industry Advisor.

This feature appeared in the February 2020 issues of the ACP Magazines:

California Builder & Engineer, Construction, Construction Digest, Construction News, Constructioneer, Dixie Contractor, Michigan Contractor & Builder, Midwest Contractor, New England Construction, Pacific Builder & Engineer, Rocky Mountain Construction, Texas Contractor, Western Builder

Turner Construction Teaches Educators About the Industry Through Externship Program

By Jessica Hoover

Last summer, the Rutherford Works Teacher Externship Program paired educators from five middle schools in Rutherford County with five companies in the fields of construction, advanced manufacturing, health care, information technology, and supply chain management. The program is a partnership between the Rutherford County Chamber of Commerce and Rutherford County Schools. 

“The goal of the program is to help expose educators – so teachers, counselors, administrators – to the world of work,” said Beth Duffield, Senior Vice President for Education and Workforce Development for Rutherford County Chamber of Commerce. “Most educators don’t have extensive work experience outside the classroom. We want them to become familiar with our employers and some of the challenges that our employers are having in finding a qualified workforce. Ultimately, we want the educators to utilize what they learn from the employers in the classroom to help students learn about careers in the related industry.”

A Multi-Faceted Program

On the first day of the program, all 22 educators from the five schools gathered at the Chamber of Commerce for orientation.

“During our first day with the educators, we give them a deep dive into all things high school,” Duffield said. “We teach them about graduation requirements, early post-secondary opportunities and work-based learning experiences so they are able to talk about what’s next with their eighth graders. We also review all the programs that the Rutherford County Chamber of Commerce facilitates with our schools.”

After orientation the teachers are divided into five groups, with each group going to Turner Construction Company, Ingram Content Group, Magneti Marelli (Calsonic), Nissan Group of North America or TriStar StoneCrest. Each company developed its own two-week program independently. 

Turner was the only company in the construction industry. Turner hosted five educators from Christiana Middle School over the course of the two-week program.

Turner’s program involved the educators job shadowing the project engineer, superintendents, safety manager and project manager for the Saint Thomas Rutherford Hospital Tower and Operating Room Expansion in Murfreesboro, Tennessee. 

“Our educators got the opportunity to see the logistics that go into an expansion project at a functioning hospital,” said Paul Lawson, Project Executive for Turner Construction Company. “They took part in daily huddles, scheduling meetings, pricing reviews, submittal reviews and construction activity notice meetings held with the hospital’s engineering and maintenance staff. I think many of them found it eye-opening to see the level of coordination that goes into the work we do.”

“The teachers that worked with Turner last summer learned about safety and quality and teamwork,” Duffield said. “They were exposed to as much hands-on, real-world work as possible.”

Reaching Students Through Educators

The Rutherford Works Teacher Externship Program gives educators real-world experience in STEM-related fields so they can advise students on their educational and career goals. The program aims to increase the number of individuals with both soft and technical skills needed to fill the growing number of jobs in the construction, advanced manufacturing, health care, information technology, and supply chain management industries.

“Ultimately, we’re trying to reach students through these educators,” Lawson said. “We understand that middle school is pretty early to be thinking about a career, but we think it’s beneficial to create awareness of our industry early on, so that when students do start thinking more seriously about a future career, there’s already some familiarity there. … Each teacher who participates in this program could potentially reach 60-plus students per year. By drawing on their firsthand experience through the program, they can help students understand what’s interesting and fulfilling about our work, as well as how skills like math and science can be beneficial in the engineering and construction industries.”

After the two weeks is over, Duffield said that each group of educators identified a problem that they wanted to solve within their school and developed a school-wide implementation plan for sixth, seventh, and eighth grade. Turner’s five educators from Christiana Middle School implemented career and lifestyle exploration throughout all grade levels, along with monthly advocacy projects. They also created a parent pathway night so students and parents could make connections with companies.

“The teachers who took part in the program this year told us that it was very illuminating to see the behind-the-scenes planning and coordination that is involved in our projects and that students seemed to be genuinely interested in hearing about their experiences,” Lawson said. “Because these students are in middle school, we won’t know for years if any of them end up pursuing careers in construction, but our hope is that through this program and similar initiatives, we’ll begin developing our construction workforce of the future.”

The 2020 Teacher Externship Program will be held from June 8-19, and participating teachers will be paid $20 an hour for the two weeks of the program.

This feature appeared in the February 2020 issues of the ACP Magazines:

California Builder & Engineer, Construction, Construction Digest, Construction News, Constructioneer, Dixie Contractor, Michigan Contractor & Builder, Midwest Contractor, New England Construction, Pacific Builder & Engineer, Rocky Mountain Construction, Texas Contractor, Western Builder

CONEXPO CON/AGG and IFPE 2020 to Take Place in March

Registration is still open for the co-located CONEXPO-CON/AGG and IFPE 2020 exhibitions, North America’s premiere events for the construction industries and the fluid power, power transmission and motion control industries. CONEXPO-CON/AGG and IFPE 2020 will be held March 10-14 in Las Vegas.

Both CONEXPO-CON/AGG and IFPE have already set exhibit space records and will feature industry-leading education programs. Several show ticket options are available, and all tickets include a monorail pass. New for 2020 is the opportunity to mix and match education sessions between CONEXPO-CON/AGG and IFPE for one price.

CONEXPO-CON/AGG and IFPE come around every three years for a can’t-miss event. No other shows bring together as many segments of the construction industries and of the fluid power, power transmission and motion control industries in one place.

Attendees will have up-close access to the leading manufacturers and suppliers, latest product innovations, and knowledge resources to help their businesses thrive. For 2020:

  • The Tech Experience returns with two locations.
  • The show campus has expanded with the new Festival Grounds for a total of 10 areas to explore.
  • Plenty of show shuttles and hotel shuttles will run during the event, plus information stands and staff will help attendees easily navigate the show campus.
  • CONEXPO-CON/AGG and IFPE make it easy to prepare with an interactive online exhibitor directory and a show mobile app that will continuously synch to your online customizable show planner.

Education is always a vital component of both CONEXPO-CON/AGG and IFPE to help attendees not only survive, but thrive in a changing and global industry.

Attendees at the 2020 shows can take advantage of more than 180 education sessions packed with timely and actionable information, developed with the guidance of leading industry groups, and delivered by industry experts. 

New for 2020 are mix-and-match sessions between CONEXPO-CON/AGG and IFPE for company teams to cost-effectively obtain learning sessions targeted to their needs.

“The line-up of programming is not only larger than it has ever been but includes a fresh line-up of speakers stacked side-by-side with core programming that is always highly attended,” said Eileen Dickson, Vice President of Education, National Ready Mixed Concrete Association and CONEXPO-CON/AGG Education Committee chair.

CONEXPO-CON/AGG 2020 education features 10 tracks covering a variety of equipment applications, site development, fleet management, business best practices, technology, safety, and attracting and retaining talent.

IFPE education is grouped in two tracks: Hydraulics and Pneumatics at Work and The Business of Fluid Power. Its popular College Courses return, and new is an IFPE Research Symposium.

CONEXPO-CON/AGG Education – Targeting the Construction Industries

CONEXPO-CON/AGG 2020 education tracks will offer the latest trends and best practices focused on: aggregates; asphalt; concrete; cranes, rigging and aerial lifts; earthmoving and site development; equipment management and maintenance; business management; and safety, plus technology solutions and attracting, engaging and retaining talent.

“The education committee took great care in putting together a program that grows attendee knowledge on building their business on all fronts, whether the technical skills needed in the field or best practices to build their business,” said Graham Brent, CEO of the NCCCO Foundation and CONEXPO-CON/AGG Education Committee vice chair.

CONEXPO-CON/AGG 2020 education includes:

  • Driving New Innovation at Complacent Companies – James Benham, JB Knowledge
  • Drones on Construction Sites for All Contractors – Ryan Murguia/Zach Pieper, Quantum Land Design
  • Gain a Competitive Advantage Through Construction Technology – Tauhira Hoossainy, Milwaukee Tool
  • How to Win the War for Talent – Gregg Schoppman, FMI
  • Safety Training Ninja – Regina McMichael, The Learning Factory, Inc.
  • Technology Trends: Lessons Learned – Helga Jacobsen, United Rentals
  • Top 10 Reasons Why Construction Businesses Fail – Larry Kokklenberg, Center for Business Development

IFPE Education – Focused on Fluid Power

The IFPE College Courses emphasize hands-on technical knowledge on the effective use of hydraulics in mobile equipment. Content includes Fundamentals of Hydraulic Systems; Electro Hydrostatic Actuation; Safety Hydraulics, Best Practices for Modern Machinery; Hydraulics in the Digital Age: Hydraulic Fluid Properties, Efficiency and Contamination Control; and Digital Design.

The IFPE Research Symposium is hosted by IFPE co-owner National Fluid Power Association (NFPA) and runs during lunch (11:30 a.m.-12:30 p.m.) March 11-13. Sessions will showcase the latest fluid power research at U.S. universities being funded by the U.S. Department of Energy to improve energy efficiency of off-road vehicle hydraulic systems.

“We focused on developing education programs that offer attendees the latest ideas and innovations in fluid power technology, applications and research. Our classes and sessions deliver critical information for engineers and others involved in the design and manufacturing process,” said Eric Lanke, President/CEO, NFPA. 

IFPE 2020 education includes:

  • Additive Manufacturing – Vince Anewenter, Milwaukee School of Engineering
  • Industry of the Future – Prasad Ganorkar, McKinsey & Company
  • IoT – Sharing Data Across Customer Boundaries – Adam Livesay, Elevat
  • Mobile Hydraulic Robotics – Autonomous Machines – Chris Woodard and John O’Neill, Danfoss
  • Workforce Development – Lynn Beyer, NFPA

Learn more and register online at conexpoconagg.com and ifpe.com.

Catching Up to Keep Up

By Greg Sitek

By now you’ve had a chance to face the fact that we are well into the new year 2020, which is also the start of a new decade, the second in this the 21st Century. One of the many things that has change in recent times is the speed at which thing evolve or change. Many people look at the construction industry and think that it is slow to change. Although it may appear to be it isn’t.

Granted, much within the industry doesn’t change — the equipment used doesn’t “look” like it has changed but equipment owners and operators know that it has. Construction equipment is more efficient and more productive; requires less maintenance; is more comfortable in all kinds of weather and all kinds of climates; it has machine controls to assist the operator; some can be operated remotely, and the list goes on.

Typical hand held construction tools have changed evolving from the once standard corded tools to battery powered versions that deliver as much if not more productivity without the hazard of electric cords stretched a jobsite. Lighting has improved radically not only on the mobile equipment but also on the hand-held and on the jobsite. 

If you think about it, there has been a lot of change with the equipment, tools, safety devices, lighting, signs, communications, data and information collection and distribution, design and engineering and management.

Along with these changes have come an endless list of acronyms. If nothing else, our world has gone acronym crazy. Some of them have become a part of our jargon and we know instantly what they while others take time to figure out and still others need someone to explain them to us.

BIM is one of the acronyms that has become more common. What is BIM? Building Information Modeling (BIM) is a process that begins with the creation of an intelligent 3D model and enables document management, coordination and simulation during the entire lifecycle of a project (plan, design, build, operation and maintenance). (Autodesk.com)

What is BIM used for? BIM is used to design and document building and infrastructure designs. Every detail of a building is modeled in BIM. The model can be used for analysis to explore design options and to create visualizations that help stakeholders understand what the building will look like before it’s built. The model is then used to generate the design documentation for construction. (Autodesk.com)

What is the process of BIM? The process of BIM supports the creation of intelligent data that can be used throughout the lifecycle of a building or infrastructure project. (Autodesk.com)

Another acronym that has become popular is IoT — The Internet of Things is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. Wikipedia

We ran a few article on IoT in the ACP magazines and on this website. The most recent, Construction Enters the IoT Age, was posted on December 15, 2019 (http://www.site-kconstructionzone.com/?p=17582). According to market research firm, IDC, worldwide IoT spending will surpass the $1 trillion mark in 2022. It’s already disrupting many industries – from gathering sensory data on agricultural crops, trucking routes or the state of consumer appliances, to monitoring patient heart rates in healthcare. Construction has joined this IoT revolution. A study released by Dodge Data and Analytics, in partnership with Triax Technologies, found that nearly three-quarters of contractors surveyed believe IoT will help them control occupational risks, and about half expect it to reduce risks to the public, as well as financial risks and those related to property damage and construction defects.

Another article, The Future of Construction from DEWALT — Introducing the New Age of Jobsite Connectivity, was posted on May 31, 2017 (http://www.site-kconstructionzone.com/?p=14373). This article looks at the use of IoT to help contractors with asset management on the job. 

What’s next? How about, PBA – Project Business Automation. Project Business Automation (PBA) defines a new software category that integrates the fragmented project application landscape into one system, allowing information to flow freely throughout the enterprise, which means radically better and timelier insight and business management capabilities.

Project Business Automation is changing how project business gets done. It takes companies from a disparate and cumbersome collection of manual processes and business applications to a unified, holistic approach to their business. It takes a revolutionary look at the project business and enable entirely new capabilities that drive substantial improvements in efficiency, visibility, and control that ultimately lead to better project outcomes. ( http://www.adeaca.com/    )

Watch for articles on PBA in future issues of the ACP magazines. Meanwhile, to get caught up and/or keep current with changes in the industry take in some of the 203 educational session at the upcoming CONEXPO-CON/AGG 2020, March 7-10, LasVegas NE.

This editorial appeared in the 2020 issues of the ACP Magazines:

California Builder & Engineer, Construction, Construction Digest, Construction News, Constructioneer, Dixie Contractor, Michigan Contractor & Builder, Midwest Contractor, New England Construction, Pacific Builder & Engineer, Rocky Mountain Construction, Texas Contractor, Western Builder