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AEM Reports: WHAT LEADING CONSTRUCTION COMPANIES ARE DOING IN THE WAKE OF COVID-19

As COVID-19 (coronavirus) brings countless businesses to a grinding halt, the construction industry remains resilient — even in the face of tremendous challenge.

Unlike many industries where “working from home” and “drive-thru service” are feasible countermeasures, construction firms have jobsites to run. Chris Hopper, executive vice president and general manager of Skanska, told the Cincinnati Business Courier, “You can’t hang drywall from your house.”

Skanska is a New York-based construction and development firm with projects throughout the country. The company employs more than 10,000. Skanska has developed a multi-faceted COVID-19 response plan to help keep employees safe and jobsites operational.

We looked at what Skanska and other leading construction firms are doing in the wake of COVID-19.

14 ESSENTIAL ELEMENTS OF A COVID-19 RESPONSE PLAN FOR CONTRACTORS

  1. Understand and follow CDC guidelines
  2. Place restrictions on travel
  3. Develop screening measures for employees who have recently traveled
  4. Instruct employees to stay home if they are feeling sick
  5. Place restrictions on in-person meetings and other employee gatherings
  6. Encourage employees to work from home if feasible
  7. Train all employees on the 6-foot distancing rule, no handshakes, etc.
  8. Establish thorough cleaning protocols at offices and jobsites
  9. Increase availability of cleaning supplies and handwashing stations at offices and jobsites
  10. Donate N95 respirator masks to local hospitals
  11. Tell elected officials to put partisan bickering aside in this very critical moment of national crisis
  12. Establish dedicated and empowered COVID-19 response teams
  13. Stay up to date on both federal and local COVID-19 developments
  14. Maintain clear, honest and ongoing communication with employees and subcontractors, and perhaps clients and suppliers

BEST PRACTICES TO HELP MITIGATE EXPOSURE

Social distancing is a critical component of any COVID-19 response plan. Turner Construction Company, a New York-based firm that employs roughly 10,000, has begun limiting the size of employee gatherings and has already put a stop to large group meetings. Attending events such as conferences has also been suspended. Remote conferencing technology is now being utilized for meetings. On that note, Turner Construction has expanded its network capacity and training tools to accommodate this surge in online network activity.

Sometimes an essential meeting that requires in-person attendance must take place. Turner Construction mandates that these meetings occur in spaces allowing for adequate social distancing. The CDC recommends that people remain roughly 6 feet apart. Additionally, Turner Construction is adapting standard operating procedures to limit the number of employees in an elevator or hoist at a given time.

Harkins, an employee-owned construction company based in Maryland, constantly reminds employees about the 6-foot rule. Additionally, sick employees are sent home immediately. All gatherings such as lunches are forbidden, and all meetings are now conducted remotely via Microsoft Teams.

Monitoring employees who travel has been another point of focus for construction companies.

Skanska issued a ban on all international travel through at least April. Domestic travel has also been greatly limited.

Turner Construction has restricted all business travel to any CDC Level 3 country, which is a country deemed to have widespread transmission. Also, if any employee had traveled to or had close contact with anyone who traveled to one of these countries, that employee is not allowed onto a Turner jobsite or office for 14 days from the date of contact. Taking it a step further, any employee who exhibits any of the common COVID-19 symptoms is instructed to stay away from Turner jobsites and facilities. Symptoms include fever, cough and restricted breathing.

PROMOTE GOOD HYGIENE

Hygiene has also been at the top of the list for Turner Construction. All jobsites are required to provide access to handwashing stations. Additionally, staff has been trained to religiously clean and disinfect frequently touched objects such as lunch tables, coffee machines and door knobs.

Harkins has instituted a long list of jobsite protocols to help improve awareness. For example, CDC and OSHA guidelines are now posted in all conspicuous locations on jobsites. Furthermore, jobsite leaders are trained to closely monitor employee behavior to ensure that the guidelines are being followed.

Harkins has also taken steps to step up jobsite cleaning. Trailers are now cleaned daily. Furthermore, a commercial cleaning service is brought in to clean and disinfect certain areas of a jobsite if COVID-19 exposure is suspected to have taken place. Harkins has also increased the volume of hand sanitizing products deployed to jobsites.

ESTABLISH DEDICATED TEAMS — AND EMPOWER THEM

Skanska has established a Coordination Response Team in each market it serves. Teams are tasked with monitoring COVID-19 developments, sharing information with employees and business partners, and implementing protocols.

Turner Construction has also established a dedicated COVID-19 Action Team. Efforts to support employees are an essential part of this team’s focus. Support is a key element that can get overshadowed in the midst of everything that is going on. This crisis has been taking a tremendous toll on many. Employers can play a constructive role in helping people cope.

On that note, Turner’s COVID-19 Action Team has gathered information to help employees guard against coronavirus-related scams, which are unfortunately emerging on a regular basis. The company has established a “fraud alert page” where employees can receive up-to-date information.

MAINTAIN OPEN, HONEST COMMUNICATION

Skanska is utilizing its internal company website (intranet) to provide general updates on COVID-19. The intranet is also being used to reinforce guidelines and standard operating procedures. This same information is also available through the company’s mobile app.

As reported by the Cincinnati Business Courier, telling employees to stay home when they are not feeling well is a critical piece to maintaining a safe, functioning jobsite. To reinforce the importance of this policy, HGC Groups, a large regional general contractor based in Cincinnati, has temporarily stopped recording unscheduled absences. In other words, an employee who thinks they may have COVID-19 symptoms will not be penalized for calling in sick to work.

LIFE HAS CHANGED, BUT STILL GOES ON

In Orlando, Fla., work on a $2.15 billion airport project continues amidst the COVID-19 crisis. As reported by the Orlando Business Journal, several guidelines have been put into place so work can continue:

  • Employees showing signs of illness are sent home
  • Additional handwashing stations have been made available
  • More frequent cleaning of high touch point areas like stairwells
  • Administrative staffs are evaluated for possible shift adjustments to limit personal interaction

The economic toll of COVID-19 has already set in. That said, some financial analysts expect that industries like manufacturing and construction will be among the last to begin issuing layoffs. That is due to the significant shortage of skilled workers these industries have been experiencing.

Rather, construction firms are expected to take proactive measures to help protect their workers and ongoing projects. The best practices outlined in this article showcase what leading construction firms are already doing in this regard.

LOBBY FOR RELIEF … AND LEAD BY EXAMPLE

The Associated General Contractors of America (AGC) says it has been lobbying for the construction industry to be deemed “essential” as government officials issue new mandates for certain business closures. AGC has also expressed support for a $2 trillion relief package that, as of March 23, the U.S. Senate had failed to pass on numerous occasions.

In addition, the Association of Equipment Manufacturers (AEM), show owner and producer of CONEXPO-CON/AGG, says it is working closely with federal, state and local officials to make sure they take immediate steps to contain the spread of COVID-19, support equipment manufacturers and their employees, maintain vital supply chains and ensure the country’s economic resilience. AEM sent a letter to the President requesting that the federal government designate equipment manufacturers, suppliers, and dealers as “essential” and providing state and local jurisdictions with a clear and consistent federal directive moving forward.

AEM continues to urge Congress and the President to take action on the following policies that would support the construction industry:

It is important for construction companies to help bring this message to state and federal leaders. The sooner Congress comes together to pass relief, the sooner financial markets can be stabilized.

While businesses and citizens wait for our nation’s leaders to put their partisan bickering aside and come together in the face of this unprecedented national crisis, the construction industry is showing that it is possible to put the nation’s interests ahead your own.

The CEO of 3M recently told CNBC that he was disappointed that N95 respirator masks are still on store shelves while hospitals face a shortage. To be fair, that could simply be the result of inventory that already existed in the pipeline. Regardless, it is up to retailers to decide if it is in the nation’s best interest to redirect that inventory to local health care facilities.

Some construction companies have already determined that it is in the nation’s best interest.

An ABC television affiliate in Columbus, Ohio, recently reported that area construction companies have answered Vice President Mike Pence’s call to redirect respirator masks to hospitals. More construction companies around the country can follow suit by simply reaching out to their local hospitals and health care facilities.

That is leadership by example, and the construction industry does it as well as anybody.

By adopting the COVID-19 prevention protocols outlined in this article, construction companies can continue leading by example — all while helping to “flatten the curve” and help the nation emerge from this crisis.

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2019 Will Be …

By Greg Sitek

Prospects for the coming year are positive. Inertia alone should keep the economy going and growing. So much has been put in motion that most of the influencing factors have not yet had a chance to take effect.

According to the Equipment Leasing & Finance Foundation A strong labor market and healthy consumer spending are positive factors, “Indeed, preliminary estimates of consumer spending on Black Friday and Cyber Monday reveal that online spending was up nearly 20% from last year, setting a record that underscores the current sentiment of U.S. consumers. Overall, recent data suggest that consumer spending should continue to drive economic growth in 2019.” The Foundation also points out that there are factors that have the potential of causing problems, most notably increased trade pressures and tightening of global credit.  You can find more of what the Foundation and other leading industry organizations predict for 2019 in the national section of this issue.

There are numerous organizations that have published forecast and other that will be published after the New Year has started. We will keep you informed on these as they become available.  Meanwhile here are glimpses into what a couple leading industry associations are forecasting.

ABC

Associated Builders and Contractors (ABC) Chief Economist Anirban Basu forecasts another strong year for construction sector performance, yet warns about inflationary pressures.

Job growth, high backlog, and healthy infrastructure investment all spell good news for the industry. However, historically low unemployment has created a construction workforce shortage of an estimated 500,000 positions, which is leading to increased compensation costs.

“U.S. economic performance has been brilliant of late. Sure, there has been a considerable volume of negativity regarding the propriety of tariffs, shifting immigration policy, etc., but the headline statistics make it clear that domestic economic performance is solid,” said Basu. “Nowhere is this more evident than the U.S. labor market. As of July, there were a record-setting 6.94 million job openings in the United States, and construction unemployment reached a low of 3.6 percent in October.”

While the U.S. economy is thriving, Basu cited the potential long-term impact of rising interest rates and materials prices—up 7.9 percent on a year-over-year basis in October—on the U.S. construction market. In addition, the workforce shortage will continue to influence the market in the coming year.

That said, Basu stressed that a recession is unlikely in 2019, even with recent financial market volatility. Indicators such as the Conference Board’s Leading Economic Index, which often signals an economic downturn, have continued to tick higher, implying current momentum will continue for at least two to three more quarters.

While optimistic for next year, Basu warned that “Contractors should be aware that recessions often follow within two years of peak confidence. The average contractor is likely to be quite busy in 2019, but beyond that, the outlook is quite murky.”

https://www.abc.org/News-Media/Newsline/entryid/15940/abc-predicts-construction-sector-will-remain-strong-in-2019

PCA Forecasts Less Growth in 2019 and 2020

The Portland Cement Association (PCA) Market Intelligence Group forecast for cement consumption over the next two years, shows less growth compared with 2018. This year’s rate of change is 2.9 percent. Growth ebbs to 2.6 percent in 2019 and to 1.6 percent in 2020.

“We are expecting relatively modest but sustained interest rate increases after 10 years of low and stable rates,” said PCA Senior Vice President and Chief Economist Ed Sullivan. “The Federal Reserve’s actions will gradually slow the construction sector’s growth due to, among other things, the higher mortgage rates for residential buildings and higher borrowing cost for nonresidential buildings.”

Sullivan added, “While the tax cuts passed at the end of 2017 have helped to boost the overall economy, the rising debt will frame the discussion of future federal public infrastructure spending.”

PCA’s overall projection for the U.S. economy suggests considerable strength that will take time to unravel. The seeds of a gradual softening will arise from rising interest rates, the emergence of fiscal difficulties at the state level at a time of relative prosperity, and the aging of the recovery. PCA forecasts the GDP growth rate to be 3.1 percent this year, 2.7 percent in 2019 and 2.2 percent in 2020. The unemployment rate now below 4 percent, is expected to trend down – intensifying labor shortages and leading to stronger wage gains.

“America’s economy is unquestionably strong and resilient,” said Sullivan. “The real GDP growth is healthy, wage growth is up, and both the unemployment rate and consumer household debt are at near record lows. While interest rates are rising, they have not reached a threshold that would cause a significant adjustment to the positive overall growth projections.” https://www.cement.org/newsroom/2018/11/15/pca-forecasts-less-growth-in-2019-and-2020

Have a happy and prosperous New Year.

ABC Reports: Construction Adds 19,000 Jobs as Unemployment Plummets in July

The U.S. construction industry added 19,000 net new jobs in July after adding 13,000 net new jobs in June, according to an Associated Builders and Contractors analysis of data supplied by the U.S. Bureau of Labor Statistics. The industry has added 308,000 net new jobs since the first of the year, a robust increase of 4.4 percent.

The construction industry unemployment rate dove to 3.4 percent in July, recording its lowest level in the 18-year history of the series. The national unemployment rate for all industries inched down to 3.9 percent.

Nonresidential construction employment increased by 13,200 net jobs in July. Nonresidential specialty trade contractors added 8,600 net new jobs in July and have collectively added 60,300 net new jobs through the first seven months of the year. To put this in perspective, this is nearly double the amount added through the first seven months of 2017 (+32,200).

“While many observers will focus intensely on the headline employment growth number of 157,000, which was below expectations, today’s employment numbers provide more evidence that demand for workers remains elevated,” said ABC Chief Economist Anirban Basu. “Employment growth estimates for both May and June were revised higher. The official rate of unemployment fell to 3.9 percent. Nominal wage growth remains steady. Both construction and manufacturing continue to add jobs in America.

“The issue, therefore, is not really about demand for human capital, but supply,” said Basu. “There may well have been times during the nation’s history when construction industry unemployment was even lower, but relevant statistics characterizing those periods do not exist. What we know for sure is that contractors will continue to scramble for workers in the context of aggressive spending on structures and other forms of construction.

“The real mystery is how the construction industry has managed to find 308,000 net new workers over the past year given all the narratives regarding a lack of available carpenters, electricians, welders, glass installers, etc.,” said Basu. “One hope is that more workers are gravitating toward construction, which offers increasingly rare opportunities for people to enter the middle class without taking on student debt. The other hope—and there is evidence to suggest this is already occurring—is that companies will invest heavily in the capabilities of these people inducing more of them to stay in the industry even during the next downturn.”

Visit ABC Construction Economics for the Construction Backlog Indicator, Construction Confidence Index and state unemployment reports, plus analysis of spending, employment, GDP and the Producer Price Index.

ABC, Industry Groups Urge President Trump to Reverse Obama-era Policy on Project Labor Agreements

Associated Builders and Contractors joined a coalition of construction and business associations urging President Trump to eliminate government-mandated project labor agreements and allow all qualified contractors to compete for federal and federally assisted taxpayer-funded construction projects.

In a letter sent to President Trump this week, the coalition stressed that such regulatory reform would create a level playing field in the procurement of government construction contracts, increase competition, curb constructions costs and help small businesses grow. The coalition also said it is “imperative to cut regulations that stand in the way of creating career pathways into the construction industry,” which has an estimated 500,000 open positions.

“With the current construction boom contributing to a severe shortage of skilled labor, a new fair and inclusive policy encouraging all Americans to compete to rebuild their community’s schools and infrastructure would be a win-win for taxpayers and the U.S. economy,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “And with a projected 10-year, $2 trillion infrastructure investment gap in the United States, a policy ensuring taxpayers get the best possible infrastructure at the best possible price is essential to rebuilding America.”

The coalition highlighted that studies of hundreds of taxpayer-funded school construction projects found that PLA mandates increased the cost of construction 12 percent to 18 percent compared to similar non-PLA projects. In addition, PLAs unfairly discourage competition from quality contractors and their nonunion workers, who comprise of 86 percent of the U.S. private construction industry, according to recent U.S. Bureau of Labor Statistics data.

ABC and industry groups have repeatedly petitioned President Trump to rescind President Obama’s Executive Order 13502, which allows state and local recipients of federal dollars to mandate PLAs and encourages federal agencies to require PLAs on federal contracts to build projects of $25 million or more on a case-by-case basis. ABC and the coalition have advocated to replace the Obama-era policy with Executive Orders 13202 and 13208, which would prohibit PLAs from being required on federal and federally assisted construction projects, respectively. Two dozen states have enacted fair and open competition legislation that welcomes all contractors to bid on construction projects.

Associated Builders and Contractors (ABC) Visit abc.org

 

Coalition members:

American Fire Sprinkler Association (AFSA)
American Road & Transportation Builders Association (ARTBA) Associated Builders and Contractors (ABC)
Business Coalition for Fair Competition (BCFC)
Construction Industry Round Table (CIRT)
Independent Electrical Contractors Association (IEC)
National Association of Home Builders (NAHB)
National Black Chamber of Commerce (NBCC)
NFIB
National Ready Mixed Concrete Association (NRMCA)
Small Business and Entrepreneurship Council (SBEC)

ABC Reports: Construction Employment Retains Momentum in June, Says ABC; Unemployment Rate Increases as Labor Force Grows

Construction Employment Retains Momentum in June, Says ABC; Unemployment Rate Increases as Labor Force Grows
The U.S. construction industry added 13,000 net new jobs in June after adding 29,000 net new jobs in May (revised upward from 25,000+), according to an analysis by the Associated Builders and Contractors of data from the U.S. Bureau of Labor Statistics. The industry has added 282,000 net new jobs during the past calendar year, a 4.1 percent increase.

Nonresidential construction employment increased by 8,600 net jobs for the month. The majority of that growth came from the heavy and civil engineering subsector, which added 6,100 net jobs. The nonresidential building subsector lost 200 net jobs in June after losing 5,000 net jobs in May.

The construction industry unemployment rate increased to 4.7 percent in June, 0.3 percentage points higher on a monthly basis and 0.2 percentage points higher on a yearly basis. The national unemployment rate for all industries increased to 4 percent largely due to an expanding labor force.

“Today’s employment report represents a source of encouragement for most contractors,” said ABC Chief Economist Anirban Basu. “There is evidence of ongoing hiring in both public and private construction categories. Perhaps most encouraging was the 6,100 net new jobs added in the heavy and civil engineering component, an indication of stepped-up infrastructure spending. This comes as little surprise since the ongoing economic expansion has helped to strengthen the balance sheets of state and local governments, positioning them to spend more aggressively on capital projects.

“Most private construction segments were also associated with net job creations in June,” said Basu. “While the construction spending data indicates some loss of momentum in certain private construction segments, the employment data do not seem to indicate any meaningful turbulence. During the past year, nonresidential specialty trade contractors, many of which are engaged in private construction projects, have expanded their collective payrolls by more than 100,000 positions, or by 4.3 percent. Many contractors continue to say that their backlogs remain robust and that their leading challenge is securing enough trained workers to deliver forthcoming construction services.

“The overall economy continues to produce jobs at a pace that exceeds consensus expectations,” said Basu. “Despite all the focus on rising interest rates, mounting inflationary pressures, tariffs and trade wars, the U.S. economy continues to deliver new opportunities for businesses and job seekers alike. In short, economic momentum persists. This strongly suggests that contractors will remain busy, and that additional opportunities to bid for work are in the cards.”

 

 

 

Visit ABC Construction Economics for the Construction Backlog Indicator, Construction Confidence Index and state unemployment reports, plus analysis of spending, employment, GDP and the Producer Price Index.

Associated Builders and Contractors (ABC) is a national construction industry trade association established in 1950 that represents more than 21,000 members. For more information visit abc.org.