Tag Archive for 'Associated Builders and Contractors'

TRIP Reports: ILLINOIS MOTORISTS LOSE $18.3 BILLION PER YEAR ON ROADS THAT ARE ROUGH, CONGESTED & LACK SOME SAFETY FEATURES – AS MUCH AS $2,559 PER DRIVER.

ILLINOIS MOTORISTS LOSE $18.3 BILLION PER YEAR ON ROADS THAT ARE ROUGH, CONGESTED & LACK SOME SAFETY FEATURES – AS MUCH AS $2,559 PER DRIVER. LACK OF FUNDING WILL LEAD TO FURTHER DETERIORATION, INCREASED CONGESTION AND HIGHER COSTS TO MOTORISTS

Roads and bridges that are deteriorated, congested or lack some desirable safety features cost Illinois motorists a total of $18.3 billion statewide annually – as much as $2,559 per driver in some urban areas – due to higher vehicle operating costs, traffic crashes and congestion-related delays. Increased investment in transportation improvements at the local, state and federal levels could relieve traffic congestion, improve road, bridge, and transit conditions, boost safety, and support long-term economic growth in Illinois, according to a new report released by TRIP, a Washington, DC based national transportation research nonprofit.

The TRIP report, Illinois Transportation by the Numbers: Meeting the State’s Need for Safe, Smooth and Efficient Mobility,”finds that throughout Illinois, more than two-fifths of major locally and state-maintained roads are in poor or mediocre condition and eight percent of locally and state-maintained bridges (20 feet or more in length) are rated poor/structurally deficient. The report also finds that Illinois’ major urban roads are becoming increasingly congested, causing significant delays and choking commuting and commerce.

Driving on roads in Illinois costs motorists a total of $18.3 billion per year in the form of extra vehicle operating costs (VOC) as a result of driving on roads in need of repair, lost time and fuel due to congestion-related delays, and the costs of traffic crashes in which roadway features likely were a contributing factor. The TRIP report calculates the cost to motorists of insufficient roads in the Chicago, Champaign-Urbana, Metro East, Peoria-Bloomington, Rockford and Springfield urban areas.  A breakdown of the costs per motorist in each area, along with a statewide total, is below.

The TRIP report finds that 19 percent of major locally and state-maintained roads in Illinois are in poor condition and an additional 23 percent are in mediocre condition, costing the state’s drivers an additional $5 billion each year in extra vehicle operating costs, including accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.

“This report highlights how expensive it can be for Illinois drivers when the state does not maintain its basic infrastructure,” said Illinois Chamber of Commerce President and CEO Todd Maisch. “A stronger transportation system is vital to stronger business and a stronger Illinois. We must act now to improve our economy and quality of life in Illinois through infrastructure investment.”

Eight percent of Illinois’ bridges are rated poor/structurally deficient, with significant deterioration to the bridge deck, supports or other major components. The condition of state-maintained bridges in Illinois is anticipated to decline through 2023 based on current funding.  Forty-one percent of Illinois’ locally and state-maintained bridges have been rated in fair condition.  A fair rating indicates that a bridge’s structural elements are sound but minor deterioration has occurred to the bridge’s deck, substructure or superstructure.

“Poorly maintained roads are both a financial burden and safety hazard for Illinois motorists,” said Nick Jarmusz, midwest director of public affairs for AAA – The Auto Club Group.  “The investments necessary to rebuild our infrastructure would cost a fraction of what drivers are currently paying in the form of additional vehicle expenses, to say nothing of the increased risk of crashes and injuries.”

The Illinois Department of Transportation projects that, under current funding levels, the percentage of state-maintained roads and bridges in need of repairs will increase significantly in the next five years.

Traffic congestion throughout Illinois is worsening, causing up to 63 annual hours of delay for the average motorist in the state’s largest urban areas and costing the state’s drivers a total of $8.5 billion annually in lost time and wasted fuel.

Traffic crashes in Illinois claimed the lives of nearly 5,100 people between 2013 and 2017. Illinois’ overall traffic fatality rate of 1.02 fatalities per 100 million vehicle miles of travel in 2017 is lower than the national average of 1.16.  The fatality rate on Illinois’ non-interstate rural roads is approximately two-and-a-half times higher than on all other roads in the state (2.09 fatalities per 100 million vehicle miles of travel vs. 0.82). The financial impact of traffic crashes costs Illinois drivers a total of $4.8 billion annually.

The efficiency and condition of Illinois’ transportation system, particularly its highways, is critical to the health of the state’s economy.  Annually, $2.9 trillion in goods are shipped to and from Illinois, relying heavily on the state’s network of roads and bridges. Increasingly, companies are looking at the quality of a region’s transportation system when deciding where to relocate or expand. Regions with congested or poorly maintained roads may see businesses relocate to areas with a smoother, more efficient and more modern transportation system. The design, construction, and maintenance of transportation infrastructure in Illinois support 154,001 full-time jobs across all sectors of the state economy.

“These conditions are only going to get worse, increasing the additional costs to motorists, if greater investment is not made available at the federal, state and local levels of government,” said Will Wilkins, TRIP’s executive director. “Without adequate funding, Illinois’ transportation system will become increasingly deteriorated and congested, hampering economic growth, safety, and quality of life.”

 

ILLINOIS KEY TRANSPORTATION FACTS

THE HIDDEN COSTS OF DEFICIENT ROADS

Driving on Illinois roads that are deteriorated, congested and that lack some desirable safety features costs Illinois drivers a total of $18.3 billion each year. TRIP has calculated the cost to the average motorist in the state’s largest urban areas in the form of additional vehicle operating costs (VOC) as a result of driving on rough roads, the cost of lost time and wasted fuel due to congestion, and the financial cost of traffic crashes.

 

ILLINOIS ROADS PROVIDE A ROUGH RIDE

Due to inadequate state and local funding, forty-two percent of Illinois’ major roads and highways are in poor or mediocre condition.   The condition of state-maintained roads and bridges in Illinois is anticipated to decline through 2023 based on current funding.

 

ILLINOIS BRIDGE CONDITIONS

Eight percent of Illinois’ bridges are rated poor/structurally deficient, meaning there is significant deterioration of the bridge deck, supports or other major components.  The condition of state-maintained bridges in Illinois is anticipated to decline through 2023 based on current funding.  Forty-one percent of Illinois’ locally and state-maintained bridges have been rated in fair condition.

 

ILLINOIS ROADS ARE INCREASINGLY CONGESTED

Congested roads choke commuting and commerce and cost Illinois drivers $8.5 billion each year in the form of lost time and wasted fuel. Drivers in the state’s largest urban areas lose up to $1,500 and spend as much as two-and-a-half days each year in congestion.

ILLINOIS TRAFFIC SAFETY AND FATALITIES

Nearly 5,100 people were killed in traffic crashes in Illinois from 2013 to 2017. Traffic crashes in which a lack of adequate roadway safety features were likely a contributing factor imposed $4.8 billion in economic costs in 2017.

TRANSPORTATION AND ECONOMIC DEVELOPMENT

The health and future growth of Illinois’ economy is riding on its transportation system. Each year, $2.9 trillion in goods are shipped to and from Illinois, mostly by truck. By 2045, total freight tonnage being shipped in and out of Illinois is projected to grow by 40 percent, with 70 percent of the added tonnage moved by truck.

A report by the American Road & Transportation Builders Association found that the design, construction, and maintenance of transportation infrastructure in Illinois supports 154,001 full-time jobs across all sectors of the state economy. These workers earn $6.5 billion annually. Approximately 2.6 million full-time jobs in Illinois in key industries like tourism, manufacturing, retail sales, agriculture are completely dependent on the state’s transportation infrastructure network.

For the full report visit  TRIP

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.

ABC Reports: Nonresidential Construction Spending Remains Elevated in May, But Private Sector Falters

Nonresidential Construction Spending Remains Elevated in May, But Private Sector Falters, Says ABC
Nonresidential construction spending inched 0.1 percent higher on a monthly basis in May, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data released today. Spending, which totaled $749 billion on a seasonally adjusted annual rate for the month, is up 3 percent from the same time last year.

Public nonresidential spending increased 0.6 percent for the month and 4.9 percent for the year, while the private sector contracted 0.3 percent for the month but increased 1.8 percent year-over-year. The dip in private sector is spending is largely attributable to a 2.3 percent decrease in manufacturing-related spending.

“The prediction has been that publicly financed construction spending would rise in America,” said ABC’s Chief Economist Anirban Basu. “The logic of this is rooted in two basic factors. The first is that the ongoing economic expansion, now in its 10th year, has steadily improved fiscal conditions in state and local government.  With more money to spend, more communities are empowered to deal with deferred maintenance and even to expand the capacity of certain key infrastructure, whether roads, mass transit, wastewater treatment plants or water systems.

“The other factor relates to a political cycle,” said Basu. “Increasingly, policymakers have been making the case—and much of the electorate seems convinced—that stepped-up infrastructure investment is needed. Accordingly, in recent years, 31 states have expanded their transportation funding, including 24 of them by raising state gas taxes. Not surprisingly, public construction spending is higher on month-over-month and year-over-year bases.

“What has been less clear is whether privately financed construction would continue to rise,” said Basu. “While the economy remains strong, a number of headwinds have formed, particularly concerns regarding tariffs and trade wars. Construction material prices have already begun to surge, in part because of trade disputes involving materials such as softwood lumber, steel, and aluminum. This increases project costs without offering developers and their financiers any offsetting commercial benefit.

“Moreover, fears of a full-blown trade war between the United States and NAFTA partners, the European Union and/or China have likely resulted in some businesses and investors adopting a wait-and-see attitude,” said Basu. “This helps explain the recent dip in construction spending related to manufacturing. With key interest rates, like the prime rate, also on the rise, the motivation to move forward with projects may be waning. Rising borrowing costs make it less likely that a project will satisfy a given investor’s hurdle rate. Rising labor costs contribute further to this calculus.

“The upshot is that contractors would likely be primary beneficiaries of a less precarious policymaking environment,” said Basu. “Businesses, markets, developers and financiers each prefer certainty. They also prefer input costs that aren’t surging. This strongly suggests that, while private construction spending should remain sturdy during the months ahead given healthy backlog and current economic momentum, the outlook for construction spending may be rather different in a few quarters.”

 

 

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. Founded on the merit shop philosophy, ABC and its 70 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit abc.org

ABC Reports : Nonresidential Construction Down in March, Says ABC Private Sector Falters, Public Sector Unchanged

Nonresidential construction spending declined 0.3 percent in March, according to an Associated Builders and Contractors (ABC) analysis of U.S. Census Bureau data released today. Nonresidential spending, which totaled $740.9 billion on a seasonally adjusted, annualized basis, has expanded 2.5 percent on a year-over-year basis. February’s spending estimate was revised roughly $10 billion higher, from $732.8 billion to $742.8 billion, rendering the March decline less meaningful.

Private sector nonresidential construction spending fell 0.4 percent on a monthly basis but rose 2.2 percent from a year ago. Public sector nonresidential spending remained unchanged in March, but it is up 2.9 percent year-over-year.

“The nonresidential construction spending data emerging from the Census Bureau continue to be a bit at odds with other data characterizing growth in the level of activity,” said ABC’s Chief Economist Anirban Basu. “For instance, first quarter GDP data indicated brisk expansion in nonresidential investment. Data from ABC’s Construction Backlog Indicator, the Architecture Billings Index and other leading industry indicators have also been suggesting ongoing growth. Despite that, private nonresidential construction spending is up by roughly the inflation rate, indicating that the volume of services delivered over the past year has not expanded in real terms.

“That said, most economists who follow the industry presumed that March data would be somewhat soft,” said Basu. “The Northeast and Midwest were impacted by unusually persistent storm activity in March. The same phenomenon impacted March’s employment estimates, which indicated that construction actually lost 15,000 jobs that month. Other weather-sensitive industries, including retail trade, also experienced slow to negative job growth in March.

“The upshot is that CEOs and other construction leaders should remain upbeat regarding near-term prospects despite today’s construction spending report,” said Basu. “Leading indicators, including a host of confidence measures, collectively suggest that business investment will be on the rise during the months ahead. Improved state and local government finances should also support additional nonresidential construction activity.

“At the same time, construction industry leaders must remain wary of a sea of emerging risks to the ongoing economic and construction industry expansions,” said Basu. “Interest rates are on the rise. Materials prices, including those associated with softwood lumber, steel, and aluminum, are expanding briskly. Wage pressures continue to build. There are also issues related to America’s expanding national debt, increasingly volatile financial markets, the geopolitical uncertainty that has helped to propel fuel prices higher, and lack of transparency regarding America’s infrastructure investment intentions. The challenge for construction CEOs and others, therefore, is to prepare for growing activity in the near-term, but for something potentially rather different two to three years from now.”

Will 2018 Meet Expectations?

Will 2018 Meet Expectations?

By Greg Sitek

The future of the U.S. is shrouded in confusion, hostility, distrust, threats, uncertainty, criticism, discord, disasters, failing infrastructure, and an almost endless list of problems. But even so, we are experiencing a growing economy high employment rates, low inflation rates, strong housing market and an equally long list of positive things.

The U.S. ended 2017 with having a string of hurricanes – Harvey, Irma, Jose, and Maria – that caused around $200 Billion dollars in damages only to be followed by a season of fires that destroyed thousands of homes, building, thousands of acres of forests and intensified the stress on an exhausted infrastructure.

Thanks to the thousands of people who have and continue to pitch in with physical help, equipment, materials and supplies hurricane recovery and rebuilding is underway but will take years to accomplish. Groups like Team Rubicon and other veteran organizations along with donations of money and equipment by manufacturers, trade association, dealers, individuals and so many others have made it possible to push ahead with what is an overwhelming task. Healing is always a slow process.

In addition to the tests thrown at us by Mother Nature, we have had a cascade of political and social speed bumps adding hazards as we travel our road into the future slowing the forward momentum and intensifying the risk.

We know what 2017 was like. What can we expect for 2018 and beyond?

Economic forecasting is always tricky and unlike weather forecasting more critically important, especially for the forecaster. We’ve all heard the comment, “Being a weather forecaster is the only job where you can be wrong most of the time and not get fired.” This doesn’t apply to the economists who look at the conditions that are, that were and that will be.

Predictions for 2018 tend to be positive with most economists confident that we will sustain continued and improved national economic growth. I haven’t heard any of them forecasting a recession in the immediate future – the next six months and beyond.

We have included construction industry forecast from leading resources: Wells Fargo Economics Group, American Road & Transportation Builders Association (ARTBA) and Associated Builders & Contractors (ABC). There are many others who do an excellent job of industry forecasting.

On that I wish we could have included but didn’t have room is:

Dodge Data & Analytics (https://www.construction.com/) recently released its 2018 Dodge Construction Outlook, a mainstay in construction industry forecasting and business planning. The report predicts that total U.S. construction starts for 2018 will climb 3% to $765 billion.

“The U.S. construction industry has moved into a mature stage of expansion,” stated Robert Murray, chief economist for Dodge Data & Analytics. “After rising 11% to 13% per year from 2012 through 2015, total construction starts advanced a more subdued 5% in 2016. An important question entering 2017 was whether the construction industry had the potential for further expansion. Several project types, including multifamily housing and hotels, have pulled back from their 2016 levels, but the current year has seen continued growth by single-family housing, office buildings, and warehouses. In addition, the institutional segment of the nonresidential building has been quite strong, led especially by transportation terminal projects in combination with gains for schools and healthcare facilities. As for public works, the specifics of a $1 trillion infrastructure program by the Trump Administration have yet to materialize, so activity continues to hover around basically the plateau for construction starts reached a couple of years ago. Total construction starts in 2017 are estimated to climb 4% to $746 billion.”

“For 2018, there are several positive factors which suggest that the construction expansion has further room to proceed,” Murray continued. “The U.S. economy next year is anticipated to see moderate job growth. Long-term interest rates may see some upward movement but not substantially. While market fundamentals for commercial real estate won’t be quite as strong as this year, funding support for construction will continue to come from state and local bond measures. Two areas of uncertainty related to whether tax reform and a federal infrastructure program get passed, with their potential to lift investment. Overall, the year 2018 is likely to show some construction project types register gains while other project types settle back, with the end result being a 3% increase for total construction starts. By major sector, gains are predicted for residential building, up 4%; and nonresidential building, up 2%; while nonbuilding construction stabilizes after two years of decline.”

Association of Equipment Manufacturers (AEM) has posted a radio link on its CONEXPO-CON/AGG New update. To hear it you can do so at:

http://www.conexpoconagg.com/visit/conexpo-con-agg-radio-podcasts/