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Volume 4 - No. 12

December 2009

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 dcd0911
In This Issue
- Get Free Cost Book of Your Choice
- Housing Downturn Resulting in Demand for More Infill
- AIA Reaction to President's Job Creation Proposal
- Nonresidential Construction Spending Drops
- World's Largest Earthquake Shake Table Test
- Architecture Billings Index
- Green Building to Support Nearly 8 Million U.S. Jobs
- States Starting to Require Architects and Contractors
- Construction Cost Trends for 2009
- DCD Cost Guides
- Conceptual Estimating
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A Guide To Successful Construction Fourth Edition
 
Contractors can protect themselves and their companies at each critical stage of a construction project. This much-needed guide shows how to avoid lawsuits and other problems by explaining exactly what the architect's and contractor's roles are during the construction phase of a project - as well as the responsibilities of owners, developers, and construction attorneys. 
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Housing Downturn Resulting in Demand for More Infill and High-Density Options
Greater emphasis for housing closer to public transportation and job centers
     Consumer preferences for community design that once preferred areas removed from metropolitan hubs is moving increasingly towards infill sites that have greater access to public transportation options.  Mixed-use developments focused around denser is being favored in some cases over traditional neighborhood design with homes close to the street, sidewalks and smaller lots. These types of developments are still gaining in popularity, but at a slower rate than recent years most likely as the result of the overall economic challenges. Home exteriors with durability and low maintenance are also proving to be more popular in recent years.
   
Billings at residential architecture firms remain weak, but remodeling activity showing an improvement. These findings are from the American Institute of Architects (AIA) Home Design Trends Survey for the third quarter of 2009 that focused on community and neighborhood design.
 
AIA Reaction to President's Job Creation Proposal
An encouraging step, but additional measures can have greater economic impact
     
    "The president's proposal to spur job creation and stimulate the economy through tax breaks for small businesses, investment in infrastructure projects and incentives for home owners to make energy efficient improvements are all ideas that we have advocated for or testified before Congress in support of," said Christine McEntee, Executive Vice President / CEO of the American Institute of Architects. "But with unemployment rates in the construction industry, which accounts for roughly ten percent of GDP, rising past 19 percent in November, there are additional measures that can have a wider impact and accelerate economic recovery. We urge Congress to expand the energy efficient commercial tax deduction, dedicate additional investments for the construction of green schools and, most importantly, redirect TARP monies towards lending for commercial and institutional design and construction projects to get America building again."
Nonresidential Construction Spending Drops To Lowest Rate In 27 Months As Commerical Activity And Road Building Decline
Stimulus Delays, Lack of Highway Bill Are Adding to Construction Industry Woes Caused by Declining Private-Sector Activity, Industry Economist Notes 
      Spending on nonresidential construction activity tumbled 1.5 percent in October, seasonally adjusted, to the lowest annual rate since July 2007, according to a new analysis of Census Bureau data conducted by the Associated General Contractors of America. The data showed that nonresidential construction spending slumped to $652 billion, an 11 percent decline compared to October 2008, the association added.
    
"Even formerly robust construction segments, such as manufacturing and power, have run out of steam," said Ken Simonson, the association's chief economist, noting that spending on both categories of construction dropped more than 2 percent from September. "Worse, the impacts of the stimulus have been more limited and temporary because of needless delays and red tape."
Private and public nonresidential spending both dwindled in October, offsetting a 4.2 percent jump in residential construction and leaving total construction spending virtually unchanged from September's total.
     Private nonresidential construction shrank 2.5 percent for the month and 21 percent compared to October 2008. Public nonresidential spending slipped 0.4 percent in October but was up 3.7 percent from the year-ago month.
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World's Largest Earthquake Shake Table Test in Japan
    A full-scale, seven-story wood-framed condominium tower not only survived a 7.5 magnitude earthquake, but it escaped with barely a scratch - just minor drywall damage. In July, Simpson Strong-Tie participated in an unprecedented research event to highlight the importance of earthquake-resistant construction around the world.
    
As the world's largest full-scale test ever attempted, the NEESWood Capstone project was developed to test new design methods for multistory, wood-frame buildings during large seismic events, and ultimately improve the construction and safety of wood buildings in the U.S. The project featured a seven-story, 40- by 60-ft. condominium tower with 23 one- and two-bedroom living units and two retail shops on the ground level. The condo building was subjected to Japan's E-Defense (Earth-Defense) shake table, which simulates the ground motions of an earthquake.
Architecture Billings Index Sending Most Positive Signals in Over a Year
Index remains in negative category despite improvement; inquires for new projects holding strong
     Amidst a continued high level of inquiries for possible new projects, the Architecture Billings Index (ABI) reached its highest mark since August 2008, just before the serious credit problems emerged in our economy. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the October ABI rating was 46.1, up sharply from 43.1 in September. This score, however, indicates a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 58.5, following the 59.1 mark in September.
    
"This news could prove to be an early signal towards a recovery for the design and construction industry," said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. "On the other hand, because we continue to get reports of architecture firms struggling in a competitive marketplace with a continued decline in commercial property values, it is far too early to think we are out of the woods."
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New Study: Green Building to Support Nearly 8 Million U.S. Jobs Over Next 4 Years
USGBC/Booz Allen Hamilton Report Shows Green Construction to Contribute $554 Billion to U.S. GDP Between 2009 and 2013; Also Shows Strength of USGBC Membership
     Despite a challenging economic outlook, green building will support 7.9 million U.S. jobs and pump $554 billion into the American economy - including $396 billion in wages - over the next four years (2009-2013), according to a new study from the U.S. Green Building Council and Booz Allen Hamilton. The study also determined that green construction spending currently supports more than 2 million American jobs and generates more than $100 billion in gross domestic product and wages.
     The economic impact of the total green construction market from 2000 to 2008, the study found, contributed $178 billion to U.S. gross domestic product; created or saved 2.4 million direct, indirect and induced jobs; and generated $123 billion in wages.
     The study also assessed the U.S. Green Building Council's 19,000-plus member organizations and found that they generate $2.6 trillion in annual revenue, employ approximately 14 million people, come from 29 industry sectors and include 46 Fortune 100 companies.
States Starting to Require Architects and Contractors to Design and Construct Public Buildings to Achieve LEED Silver Certification
    While many local jurisdictions and cities across the country have started passing regulations which implement and require sustainable design and construction practices, relatively few states have taken steps to mandate that certain public buildings achieve certain levels of LEEDŽ Certification. 
    
Eighteen states (Arizona, California, Connecticut, Hawaii, Illinois, Indiana, Kentucky, Massachusetts, Maryland, New Jersey, New Mexico, Nevada, Rhode Island, South Carolina, South Dakota, Utah, Virginia, and Washington) have adopted laws and regulations mandating that the construction of public buildings achieve LEED Silver Certification. Although the majority of States do not yet require that public buildings be designed and constructed to achieve a LEED Silver Certification, many of these States encourage their agencies to use green building practices or use LEED as a guideline.
Construction Cost Trends for 2009
    After several years, the slide in housing is now joined by commercial construction, with the entire industry down approximately 10%. Public works is the only bright spot in the industry with virtually every segment up over last year, probably due to the economic stimulus. Lodging and office construction, once segment leaders, have both become casualties of the credit crunch, and are now down. Construction costs are now flat compared to last year, with increases in labor offset by decreases in materials (-10%).
 
DCD Cost Guides
The DCD LEEDŽ Square Foot Cost Guide
   Design Cost Data™ magazine includes a new Square Foot Cost Guide in each issue. These square foot cost guides have been assembled from projects in our database, the DCD Archives online at DCD.COM. These guides are provided to the industry by DCD as a benchmark for future building costs.
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