As the construction recession continues to drag on, industry firms continue to look to their clients to see when the downturn will end. While many owners believe the worst is past, most acknowledge there will be no quick turnaround in construction or capital spending in the near future. When the market does turn around in a big way, owners worry about who will be there to take up the burden of rebuilding the nation's industrial and public infrastructure.
As part of its overview of owners, ENR once again is presenting its Top 425 Owners list. This list ranks publicly held companies based on the 2010 construction-in-progress figures they supplied to the U.S. Securities and Exchange Commission. The data were compiled by S&P Capital IQ, a Standard & Poor's business that, like ENR, is owned by The McGraw-Hill Cos.
Because many publicly held owners do not separate their construction spending from other elements of their capital spending, ENR also is publishing a list of the Top 200 public companies ranked on their overall capital expenditures reported to the SEC, also compiled by S&P Capital IQ (see p. 36).
To further provide insights into the overall markets, particularly on the developer and buildings side, ENR for the first time is publishing a list of the Top 50 Real Estate Investment Trusts that are publicly held (see p. 39). These data were compiled by S&P Capital IQ, too.
For many large publicly held companies, particularly on the industrial side, the focus is not on the immediate market but on long-term concerns about the industry's overall health and productivity.
Productivity in the industry continues to be the chief concern among owners. “While we do studies on long-range issues of concern to the industry, over the past few years our owner-members have tended to vote for research topics on core process improvements that can yield more near-term impacts,” says Steve Thomas, associate director of the Construction Industry Institute (CII), an Austin, Texas-based industry research group.
Thomas says one of CII's biggest projects is the six-year study on workplace productivity. The first two phases of the study were featured in ENR (6/6 p. 32). CII's Research Team 252 released in July the results its study's third phase, which focused on the more efficient use of concrete and steel on a project. Research Team 252 also released the results of its study on rework reduction in July.
Owners' focus on productivity has shifted over the past few years. “Ten years ago, we focused on the workers in the crafts and how they did their jobs,” says Bob Volkman, retired manager of global construction for Proctor & Gamble and currently a consultant to the Construction Users Roundtable (CURT), Cincinnati. “Now we are looking more at how management and the owner can take steps to impact productivity on the job.” Volkman says the owner's policies, procedures, culture and discipline set the basis for a project's efficient execution.
Pressure To Perform
Owner pressure for efficiency among suppliers has had some unforeseen consequences. The handoffs to construction have suffered. “We are finding that engineering and materials-supply handoffs at the start of the construction phase is getting worse, rather than better,” says Egon Larsen, global construction manager for Air Products & Chemicals Inc.