Tag Archive for 'Associated Builders and Contractors (ABC)'

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.

National Trade Groups Team Up To Create A Drug- And Alcohol-Free Construction Industry

Five of the nation’s largest construction trade associations have teamed up to form the Construction Coalition for a Drug- and Alcohol-Free Workplace (CCDAFW). The coalition’s mission is to create a drug- and alcohol-free construction industry by providing companies and organizations with the resources necessary to implement drug- and alcohol-free policies into their business practices.

CCDAFW today launched a nationwide effort urging construction-related firms and organizations to sign an online pledge signifying they will create and maintain a workplace free from substance abuse. In addition to listing current pledge signatories, the CCDAFW website, http://www.drugfreeconstruction.org/, includes educational materials and state-by-state policies for substance abuse testing.

The CCDAFW is comprised of Associated Builders and Contractors (ABC), The Associated General Contractors of America (AGC), Construction Industry Round Table (CIRT), Construction Users’ Roundtable (CURT) and Women Construction Owners & Executives (WCOE).

“We are driving an industry toward world-class safety,” said ABC President and CEO Michael D. Bellaman. “If we want to have an industry that is world class in safety, we have to start with a rock-solid foundation that includes an environment free of drugs and substance abuse. This coalition is a way to help companies build that foundation so we can continue toward our goal of eliminating all fatalities on construction worksites.”

“This partnership will build on the significant steps firms across the country have already taken to make construction safer today than it has ever been,” said AGC CEO Stephen E. Sandherr. “Making sure that every construction worker on every construction site is fully in control and absolutely sober is the best way to save lives and prevent injuries.”

“As an organization composed of CEOs from both leading design and construction firms, the CIRT Board of Directors views participation in the coalition as extremely critical to reinforcing the importance of safety across the wide range of disciplines involved with construction job sites,” noted CIRT President Mark A. Casso. “To that end, we see the center piece of this effort as not only the pledge itself, but also the educational materials, model policies, informational aids and best practices that will be made available and shared.”

“At CURT, we believe the road to zero incidents encompasses all facets of effective safety and health programs,” said CURT Executive Vice President Gregory L. Sizemore. “The Drug- and Alcohol-Free Workplace initiative is a way to help owners and contractors improve their safety performance – on and off the jobsite – leading to the elimination of accidents and injuries.”

“The health and safety of the construction industry workforce is of primary importance to company owners,” said WCOE National Executive Director Penny Pompei. “Drugs and construction sites do not mix. Small businesses often don’t have the resources to develop in-depth substance abuse awareness and prevention programs. This coordinated effort by a group of construction industry organizations will provide the tools WCOE’s small business owners need to combat this danger to our workers.”

The launch of the CCDAFW website and online pledge coincided with North American Occupational Safety and Health Week, May 6-12.