Somethings Never Change…

By Greg Sitek

In construction one of the key components in being successful is completing a project on time or ahead of schedule. Another is completing the project at or under budget. There are many factors that can and do impact both the productivity and cost of a project but a lot depends on the equipment.

If the equipment is dependable and reliable; if the equipment doesn’t perform at it was designed to it’s difficult to be productive and operating costs are up. Throw in a major failure and costs can skyrocket and productivity plummet. 

One critical production machine being down can throw a job behind in every sense and every way.

There is insurance that can prevent this from happening or at least minimize the potential for such a catastrophe happening – good equipment management and good equipment maintenance program.

Equipment, all equipment has always demanded maintenance and management. If the equipment isn’t properly maintained, i.e. following the maintenance programs and procedures as outlined in the owner/operator manuals or online programs provided by the machine’s manufacturer. 

The routine daily inspections and procedures need to be done by your operation either by the equipment operator or company maintenance staff. Periodic or interval maintenance requirements can be fulfilled either by your operation or through contractual arrangements with your equipment dealer. 

To make certain that you are going to get the most out of the equipment make certain that the machine operators and maintenance staff are properly trained, use the correct tools and equipment to do the inspections, repairs and maintenance and use wear-products, i.e. filters, lubricants, belts, hoses, replacements parts, etc. recommended by the manufacturer.

Cutting corners with any of these “components” won’t save you money long term. Quite the contrary, usually it will end up costing much more than you could possibly have saved.

Manage the use and application of the equipment. Establish and follow, religiously, inspections, routine maintenance, wear-part replacement and periodic maintenance as prescribed by the manufacturer. Don’t put off a scheduled maintenance/inspection because you need the machine on the project. Don’t tempt fate. If you need the machine and a routine inspection or maintenance procedure comes up, shut the machine down or bring it in and follow the schedule.   

Use all the available maintenance aids you can to make the job easier, more efficient, more exact. Things like oil and/or fluid analysis provide excellent data on the internal conditions of your equipment.

Use maintenance software programs to help with the scheduling and recordkeeping. Good records are essential to good management and maintenance practices. 

Use your equipment in applications for which it was designed, engineered and manufactured. A piece of equipment that’s too big for an application doesn’t mean you get the job done fasted. 

Intelligent Sizing Drives Success

We’d all love it if we could justify owning and operating the biggest equipment – just to have it in case certain jobs come up that may require that added capacity. But it’s not practical in terms of owning and operating costs, and zoning in on equipment size ranges that best complement your work will make the most sense for your business in the long run.

(Source CASE News: (https://www.casece.com/northamerica/enus/resources/articles/measuring-up-factors-for-sizing-equipment-from-backhoes-to-bulldozers))

What size equipment is right for you?

Determining what size of equipment is best for you depends on many factors. Primarily, it’s the application or exact task you require the machine to do. It also depends on what you expect as a return on investment. Generally, larger and more complex machines have higher purchase and operating costs, and have to be billed out at a higher rate. Smaller machines are more affordable to own and run, but they don’t command the large dollar-per-hour fees their big cousins do.

Equipment sizes vary according to volume demands. Often, the machine’s physical weight and dimensions affect the capacity more than engine horsepower or hydraulic pressure. Transportation is another prime issue when it comes to deciding on the right-sized piece of equipment. Having to purchase or arrange for large-capacity hauling between worksites can be an additional overhead that doesn’t pay back. (Source Warren CAT.com)(https://www.warrencat.com/news/construction-equipment-size-guide/))

It’s March and for most of the country time to start getting the equipment ready for the surge of work and from all indicators, this is going to be a busy construction season across the country. If you have questions about maintenance programs, equipment applications, training for operators and/or maintenance staff contact your local dealers. They are a good and reliable source for virtually all equipment related questions. 

This feature appeared in the March 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

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

2020: THE MANUFACTURING ELECTION

By Kip Eideberg, AEM Senior Vice President of Government & Industry Relations

A view from 2017 of the US Capitol after the recent restorations.

This year, Americans will head to the polls to decide which party controls state capitals, the U.S. House of Representatives, the U.S. Senate, and the White House. It’s something that happens only once every four years, and the outcome of the 2020 election will have a significant impact on equipment manufacturers, the manufacturing sector, and the U.S. economy for years to come.

Voters consistently rank the economy as a top issue when heading into the voting booth. It’s a trend that recent polling by national surveying group Morning Consult shows will continue this year. What’s also going to be important this year, according to this month’s poll, is how well 2020 candidates present their ideas on how to keep manufacturing strong in the U.S.

The vast majority of registered U.S. voters, 91 percent, say manufacturing is critical or important to keeping the economy strong. The recent survey also shows that more than three-quarters of U.S. voters believe presidential candidates should prioritize manufacturing as part of their 2020 platforms – and that number grows in manufacturing-heavy swing states like Wisconsin, Pennsylvania, Ohio, and Michigan.

2020 candidates must take note. They can position themselves as champions of manufacturing by outlining how they would protect and grow the sector through pro-manufacturing policies like infrastructure investment, free and fair trade, workforce development, and supporting farmers and working families by passing policies to keep rural communities strong. That will resonate with the 91 percent of registered U.S. voters who value keeping manufacturing strong. For example, the recent poll shows seven in 10 voters are more likely to support candidates running for office if they support efforts to bolster the economy of rural America and prepare students for careers in manufacturing.

However, from a policy perspective, the last several years have resulted in mixed results for manufacturers. On one hand, the 2018 tax reform bill, the 2018 Farm Bill, and a modernized North American trade agreement provided by the United States-Mexico-Canada Agreement (USMCA) are all policy wins for equipment manufacturers and our industry’s 1.3 million men and women. On the other hand, the ongoing trade war with China and the use of protectionist tariffs, as well as the failure by Washington lawmakers to reach across the aisle to pass a comprehensive infrastructure package, has offset those wins. Altogether, it’s resulting in a less certain future for manufacturers.

For example, two recent manufacturing indexes by IHS Markit and ISM show a sharp divergence when it comes to whether U.S. manufacturing is expanding or contracting. While ISM’s evaluation shows the worst manufacturing report in a decade, Markit shared a stable reading over 52. The mixed signals are being felt by U.S. voters. That same, new poll out this month shows 45 percent of registered voters believing manufacturing is in the decline and 47 percent believe there will be fewer manufacturing jobs in the future.

This makes the 2020 election ripe for AEM and the entire equipment manufacturing industry to ensure the manufacturing and its current and future role the U.S. economy becomes a dominate theme throughout this year’s campaign season. That’s why AEM is engaging in several election-year activities promoting manufacturing issues with voters.

For example, next month on Sunday, February 16, AEM will co-host the “Moving America Forward” presidential candidate forum in Las Vegas, featuring the top Democratic presidential candidates for an opportunity to hear their ideas on how the U.S. can best address challenges facing America’s infrastructure. Infrastructure presents both an urgent challenge and a singular opportunity for any presidential administration to address since it’s an issue that affects every American. It’s also an issue that 90 percent of Americans believe should be a priority for the next administration.

AEM will also be leading the effort to engage and inform tens of thousands of the industry’s men and women across the country through the AEM 2020 Manufacturing Express, a national tour with over 50 stops over three months leading up to the November election. The bus tour will kick off directly following the Democratic National Convention in Milwaukee, in July, and feature state and local officials, members of Congress, presidential candidates, and other elected officials, to highlight the issues facing U.S. manufacturers before Americans head to the polls in November this year.

It’s clear American voters want strong leadership on manufacturing. It’s up to us to make sure 2020 candidates pay attention. 

Subscribe to the AEM Industry Advisor for more perspectives from AEM leaders.

Forecast For 2020 Is Definitely Not 20/20

By Greg Sitek

Forecasting usually uses a crystal ball for an all-inclusive overview, or a telescope for a long-range view, or a microscope for a finite, specific pinpoint view.

For 2020 a kaleidoscope is probably the correct instrument to use since forecasting anything with respect to the coming year is a virtual impossibility. Typically, there is the “what if” factor that points predictions in one direction or another. For 2020 there are more “what if” factors that stable ones.

Making predictions for the coming year are like shooting the ball in a pinball machine – you just don’t know where it’s going to go, what obstacles it’s going to hit, which direction it’s going to be forced into traveling. 

However, for the construction industries, there are a couple of certainties that will remain constant. For Example, March 10 through 14 ConExpo will be held in Las Vegas, Nevada and will be the biggest construction show ever with 2,800 exhibitors, 2,500,000 square feet and 150 education sessions.  

For our industries this is where I stop with the predictions. There are numerous bills, proposals, agreements, treaties, etc. waiting to be reviewed, revised, rewritten in and before congress waiting for congressional action all of which will have an impact not only on construction but our entire economy. 

According to Dodge Outlook Report we can expect an economic slowdown that will affect total construction growth.

Dodge Data & Analytics released its 2020 Dodge Construction Outlook, a mainstay in construction industry forecasting and business planning. The report predicts that total U.S. construction starts will slip to $776 billion in 2020, a decline of 4% from the 2019 estimated level of activity.

“The recovery in construction starts that began during 2010 in the aftermath of the Great Recession is coming to an end,” stated Richard Branch, Chief Economist for Dodge Data & Analytics. “Easing economic growth driven by mounting trade tensions and lack of skilled labor will lead to a broad based, but orderly pullback in construction starts in 2020. After increasing 3% in 2018 construction starts dipped an estimated 1% in 2019 and will fall 4% in 2020.”

“Next year, however, will not be a repeat of what the construction industry endured during the Great Recession. Economic growth is slowing but is not anticipated to contract next year. Construction starts, therefore, will decline but the level of activity will remain close to recent highs. By major construction sector, the dollar value of starts for residential buildings will be down 6%, while starts for both nonresidential buildings and non-building construction will drop 3%.”

In Contrast, AEM’s 2020 Outlook for Construction predicts “Steady and solid growth is likely to continue for the construction sector. As the second-largest in the world (behind China), the U.S. construction market is poised for 3.3 percent growth this year, 1.7 percent growth in 2020, and somewhere between 1.5 and 2 percent growth for the next five years. Residential construction remains a strong driver – it represents about 40 percent of the total market and, in the last four years, it’s seen double-digit growth. However, as of late, growth has slowed considerably.

“A lot of the optimism we saw in 2017 and 2018 seems to have evaporated,” said AEM Director of Market Intelligence Benjamin Duyck. “There really is no consensus to what the future truly holds.”

Tariffs are playing a role in the uncertainty, as is the need for a new comprehensive infrastructure package.

“Both political parties discuss this quite a bit, but nothing has materialized so far,” said Duyck. “It’s now expected for 2021 – and hopefully it comes soon, as most of the infrastructure spending, we see today occurs at the state and local level.”

“While the outlook for construction remains positive, enough factors are having a negative impact that uncertainty is still pervasive for the time being.”

AEM’s bottom line – “2019 has been a solid year for the economy overall, as well as the ag and construction sectors. A number of factors – global trade wars and protectionism being chief among them – are leading to increased concern that a recession is right around the corner. And while that likely isn’t the case, it’s not unreasonable to suggest one may arrive by 2021.”

Another certainty, there is an election scheduled for November 3, 2020 and there is more on what to expect in the January issues of the ACP magazines. We do have some excellent forecasts for you.

December 2019

By Greg Sitek 

December is many things…

Probably the busiest month of the year. Certainly, one of the most traveled with the holiday shopping, visits and celebrations. It’s also that time when we start collecting the detailed information that goes into closing out the year’s activities – domestic, business and work related. It’s that time when circumstances force us to reflect on our lives as we gather the information and details to do these things. 

How has construction done for the year?

Actually not bad… According to the The Dodge Momentum Index it increased 6.9% in October to 152.6 (2000=100) from the revised September reading of 142.7. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. October’s increase was due entirely to a recovery in institutional planning projects, which had stepped back over the previous few months. Institutional planning moved 22.8% higher in the month while commercial planning lost 0.5%. 

Despite the October increase, institutional projects entering planning remain 4.3% lower on a year-over-year basis compared to October 2018. Commercial projects meanwhile are 14.3% higher than October 2018 as several mega projects have entered the early stages of planning over the last several months. The overall Momentum Index is 6.7% higher than a year ago, although its level remains below the July 2018 peak.

In October, 24 projects each with a value of $100 million or more entered planning. The leading institutional projects were the $470 million Orlando Health Hospital in Lake Mary FL and a $356 million renovation project at the Rockrimmon Elementary School in Colorado Springs CO. The leading commercial projects were a $250 million office building in Brooklyn NY and the $188 million Spirit Airlines Headquarters in Dania Beach FL.

As for our highways, there is or soon will be a bill in the senate for a new bill meanwhile, according to ARTBA The Senate passed a bundle of – FY 2020 spending bills, H.R. 3055 including one funding the U.S. Department of Transportation programs – in a modest sign of progress toward implementing full-year spending levels before the current spending law expires Nov. 21.  The House passed its version of the package June 25.

The Senate-passed legislation contains full-funding at authorized levels for highway and airport construction programs but falls short for public transportation capital grant programs.  Following recent precedent and in accordance with the two-year bipartisan budget agreement reached in July, the legislation also includes additional funding from the General Fund on highway, transit and airport programs beyond the authorized spending levels. More information available at 

http://www.site-kconstructionzone.com/?p=17393

While the new highway bill still remains a “wishful thought” Voters in 19 states Nov. 5 sent a decisive message of support for transportation investment, approving almost 90 percent of 305 state and local transportation ballot measures, also according to ARTBA.
 
In total, the 270 approved initiatives are expected to generate over $9.6 billion in one-time and recurring revenue, according to the analysis conducted by the American Road & Transportation Builders Association’s Transportation Investment Advocacy Center™ (ARTBA-TIAC). Two measures in Texas are still pending.
 
“The ballot results are a great reminder infrastructure investment remains one of the few areas where red states, blue states, Republicans and Democrats can all come together,” ARTBA President Dave Bauer said.  “It should also demonstrate to lawmakers on Capitol Hill that the public will be on board for the passage of a long-term bill that significantly boosts highway and transit investment at the federal level.”
 
A complete report and an all-new interactive dashboard that filters results by state, mode, year and type of initiative are available at the Center’s flagship website: www.transportationinvestment.org or http://www.site-kconstructionzone.com/?p=17400

And, AGC reported similar good news, Construction employment increased by 10,000 jobs in October and by 148,000, or 2.0 percent, over the past 12 months, while construction spending decreased by 2.0 percent from September 2018 to September 2019, according to an analysis of new government data by the Associated General Contractors of America. Association officials said demand for construction is being undermined by uncertainty and tariffs that are part of a series of trade disputes with China, the European Union and other countries.

“The construction industry is still adding workers at a faster clip than the overall economy but growth has slowed as private nonresidential and multifamily construction spending shrinks,” said Ken Simonson, the association’s chief economist. “At the same time, public investment and a recent pickup in single-family homebuilding have helped employment to grow.” See full report at https://www.agc.org.

As we close the books on 2019 we can look back a say, “It really wasn’t a bad year for the industry and the economy.” Of course that begs the question, “What will 2020 look like?”  We’ll have to wait and see. Meanwhile, enjoy the holiday season and have a Merry Christmas and Happy New year.