Concrete Products

AUG 2015

Concrete Products covers the issues that attract producers of ready mixed and manufactured concrete focusing on equipment and material technology, market development and management topics.

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14 • August 2015 www.concreteproducts.com In 2014, office, retail, health care and distribution facil- ity developers logged their best year since 2007, and saw overall commercial real estate industry economic contributions jump 40 per- cent from the prior year— the largest gain since market recovery began in 2011. The upbeat figures are part of the NAIOP Research Foun- dation's annual state of the industry report, "The Eco- nomic Impacts of Commer- cial Real Estate." Direct commercial real estate development expen- ditures for 2014 totaled $174 billion, up from $124 billion the year before, and resulted in solid, year-over-year gains in key indicators: $528 billion total gross domestic product contribution, up from $376 billion; personal earnings (or wages and salaries paid) totaling $168 billion, up from $120 billion; and, jobs supported (a measure of both new and existing positions) reaching 3.9 million, up from 2.8 million. "The industry is getting back to full health and making an even bigger contribution to our national economy, but it still has plenty of room to grow. Office and industrial were very strong and we believe the activity in these areas will keep accelerating," says Thomas Bisac- quino, CEO of Washington, D.C.-based NAIOP, The Commercial Real Estate Development Association. "We hope Congress can agree on a bipartisan infrastructure investment package and continue to provide incentives for capital investment to keep job creation going strong." "Economic Impacts" authors cite projections for accelerated 2015 construction spending, with single-digit, fixed investment gains in commercial structures such as office, retail, health care and distribu- tion facilities. As commercial construction continues to expand, the U.S. economy's growth rate is projected to increase from 2.4 percent in 2014 to 3.0 percent this year, and continue upward through 2020. By category type, the report finds 2014 construction expenditures increasing in: a) office by 29.8 percent, extending a 2013 gain of 23.3 percent; b) retail by 1.1 percent, a slight bump from a 4.8 percent NEWS SCOPE MARKETS Commercial development metrics: Strong and still improving An Associated General Contractors of America analysis of federal government data finds a mixed bag of positive indicators and growth constraints: Construction employment held steady in June at the high- est level in six years, while the number of unemployed workers with industry experience fell to the lowest total since 2001, and contractors in many parts of the country are having a hard time finding enough qualified workers. "Expanding job opportunities throughout the economy make it increasingly difficult for contractors to find experienced construction workers," affirms AGC Chief Economist Ken Simonson. "This scarci- ty shows up in record workweeks for craft workers and flattening of employment totals despite higher construction spending." Construction employment totaled 6,380,000 in June, matching the revised May figure, which was the highest since March 2009. The num- ber of unemployed workers who reported last working in construction totaled 522,000, the lowest amount in 14 years. Average weekly hours for construction craft workers and other "production and nonsupervi- sory employees" rose to 39.9 hours, the highest June level since data collection began in 1947. "Reports from around the country and recent Census Bureau data on construction spending show there is plenty of demand for new con- struction, especially apartments and a variety of private nonresidential projects," Simonson notes. "Until now, all segments of the industry have added workers at a faster rate than the overall economy. But some projects may be delayed or put on hold without new measures to recruit and prepare future workers." Overall construction employment was unchanged from May to June but increased by 4.2 percent (259,000 employees) between June 2014 and June 2015, he notes, adding that the growth rate was double the 2.1 percent increase in total nonfarm payroll employment over the past 12 months. Residential (building and specialty trades) construction employment dipped by 2,400 for the month but increased by 127,000 (5.5 percent) over 12 months. Nonresidential (building, specialty trades, and heavy and civil engineering) construction employment rose by 2,700 for the month and 131,800 (3.5 percent) over 12 months. Association officials continued to urge federal, state and local officials to take measures, like the ones outlined in their Workforce Development Plan, to expand recruiting and training opportunities for new construction workers. Without those new measures, many firms are likely to struggle to find enough workers as demand for construction services expands. "Too few students are even getting exposed to the idea that working in construction is a viable, and high paying, career option," affirms AGC CEO Stephen Sandherr. "Until officials take steps to rebuild what was once a robust vocational education system in this country, there won't be enough construction workers to com- plete projects in a timely fashion." The Commercial Real Estate Development Association has posted the comprehensive profle of nonresidential building sectors at www. naiop.org/contributions2015. TRADES TALENT DEARTH TEMPERS STRONG CONSTRUCTION EMPLOYMENT FIGURES gain in 2013; and, c) warehouse by 19.7 percent, marking a fourth strong year as indicated in 17.8 percent, 28.4 percent and 38 percent annual gains, respectively, from 2011–2013. "Economic Impacts" also ranks the top 10 states by value of direct office, industrial, warehouse and retail development expenditures: Texas ($42 billion), California ($13.4 billion), New York ($10.5 bil- lion), Louisiana ($6.4 billion), Nevada and Pennsylvania ($6 billion), Florida ($5.8 billion), Washington ($5 billion), Illinois ($4.9 billion) and Ohio ($4 billion).

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