The Virginia Dept. of Transportation stopped construction for five days on a $650-million interchange project in Springfield after two construction workers died there in two weeks. A third worker died on the job last October. VDOT suspended work June 7 on the "Mixing Bowl" for a safety review, and construction resumed June 13. It was VDOT's first "stand-down" in northern Virginia, says a spokesman. Besides the deaths, there were more causes for concern. "We had recorded a number of near-misses," says Larry Cloyed, VDOT assistant resident engineer. "We were seeing what we felt was a disturbing trend." One worker fell
While many economists still predict a quick recovery for the overall U.S. economy, the outlook for construction is less clear. A deepening downturn in the nonresidential building market threatens to overshadow bright homebuilding and public works sectors. Through April, nonresidential building work had fallen 16% behind the first four months of last year, including year-to-year declines of 41% for industrial, 29% for office, 24% for hotel and 4% for commercial building construction, according to the U.S. Dept. of Commerce construction put-in-place data. The slump in nonresidential building work has pulled prices for several materials below last year's level and has
Structural steel fabricators were passed by when the U.S. offered protection from cheap imported steel by placing tariffs on some flat-rolled steel products last March, including a 30% tax on steel plate and 15% on reinforcing bar. This leaves U.S. structural fabricators still facing stiff price competition from foreign firms just as the downturn in the commercial markets puts a squeeze on their backlogs. "We're dead in the water," says Alan L. Humbard, purchasing manager for Portland, Ore.-based Fought & Co. Inc. "I've been in this business 35 years and this is the worst [business climate] I've ever seen." In
Domestic producers answered the bell when the U.S. announced it was placing tariffs on imports of Canadian lumber last March. Lumber mills almost immediately raised prices by 7%, according to Eugene, Ore.-based Random Lengths' composite price index for March. Higher mill prices were quickly passed along to contractors and ENR's 20-city average price for 2x4s jumped 4% in April, after increasing 2% in March. The price rally broke a long slump but soon began to falter. Weak demand forced mills to roll back prices about 4% in both April and May, wiping out the March increase. ENR's price for the
Construction equipment prices have not budged since the mid-1990s. Through the record sales of 1998 to the current sales slump, the Bureau of Labor Statistics producer price index has remained remarkably flat. This April, the construction equipment price index was just 0.3% higher than a year ago. The BLS index generally reflects the manufacturers' transaction price, including heavily discounted sales to rental firms, says Jason Sewell, the BLS economist responsible for the index. "The industry is very competitive and producers cannot make large price changes without hurting demand," he says. This price stability is expected to continue for the near
Organized labor may now have a little less leverage than it had a year or two ago at the peak of the construction boom, but construction workers are still in high demand and union members appear more willing to strike to squeeze the best deal they can from contractors as their multiyear collective-bargaining agreements expire. Some of the increases are huge compared to the 3% average annual increases in wages and fringe benefits that the industry has seen in the union sector over the past decade. In Connecticut, a two-week carpenters' strike ended recently when the union accepted a 9%
Stick a fork in it, it's done. The big bull market for construction recruitment, which began to waver in mid-2001, fell apart in the economic uncertainties after Sept. 11. In past years, experienced contracting professionals could virtually name their price. Now, they are finding that contractors have pulled in their horns and are becoming increasingly selective in hiring. Most people in the personnel field see 9/11 as the turning point, but not the cause, of the pull-back in hiring. "We started to see a slight fall-off in recruitment in October 2000," says Linda Payson, search consultant for Daley & Associates,
Over the past decade, the trend has been for owners to shift greater amounts of risk in the construction process. This has worked to the advantage of firms providing design-build and construction management at-risk. But this trend has cut into the use of agency CM as a discreet project delivery system. Still, firms providing agency CM service have managed to use their management skills to take advantage of new opportunities and market niches. On project delivery, "the CM market today is rotating markedly to CM at-risk," says Gui Ponce de Leon, CEO of PMA Consultants. This has led agency CM
Looking at the numbers, ENR's Top 100 CM-at-Risk firms had the best year in 2001, with overall revenue rising 10.8% over 2000's mark, and 12.8% domestically. This has been a long-term trend as risk-shifting by owners, coupled with the need for closer management of the overall project, has placed increasing emphasis on design-build and CM at-risk. Part of the surge in CM at-risk even beyond that of the much-touted rise in design-build may be attributed to the move in the public sector toward alternate project delivery. "Private clients have always demanded contractor intervention from the start of the project," says
Over the past decade, the construction industry has seen a dramatic evolution in project delivery. As both public and private owners pushed to get more value for their money, contractors, design firms and construction management firms moved to meet these demands. The result has been the gradual mainstreaming of what used to be called "alternate" project delivery. Now, construction management and design-build are firmly entrenched in the construction vocabulary. But even as CM and design-build continue to increase their presence in the market, they have reached a level of maturity where they are subject to the broader market trends. The
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