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TradeWinds

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American Institute of Architects To Develop Database of Stalled Projects Suitable for Investor Financing
At CGI America Conference, AIA Seizes Initiative on Credit in Wake of Banks’ Reluctance to Lend

The American Institute of Architects (AIA) today announced it would make available to potential investors a database of stalled building projects nationwide that make economic sense but which lack the financing to be completed.

The AIA is announcing this commitment here today as a participating member at CGI America, the first conference of the Clinton Global Initiative solely dedicated to economic issues impacting the United States. The database should be available in coming months.

“We are committing to developing this database not just with the fortunes of architects in mind,” said AIA President Clark Manus, FAIA. “In large part the fortunes of the entire U.S. economy rest on the jobs-creating potential of the design and construction industry, which accounts for $1 in $9 of U.S. Gross Domestic Product, according to the U.S. Census Bureau.”

“For months, our industry has continued to suffer solely because banks won’t lend,” Manus said. “With this innovative, unprecedented commitment, the AIA has decided to step up and do something about that.”

The AIA commitment comes as the design and construction industry is plagued by a continuing dearth of credit for otherwise credit-worthy projects. Almost two-thirds of architects responding to a recent AIA survey reported at least one project that is stalled due to lack of financing, despite record low interest rates.

Of the 63% of firms surveyed with stalled projects, the average value of each stalled project was almost $50 million per firm. To make matters worse, the AIA’s May Architecture Billing Index (ABI) report, which provides a nine-to-12-month glimpse into the future of nonresidential construction spending activity, shows a continued deterioration in business conditions. The May ABI score announced last week was 47.2, a decrease from a reading of 47.6 in April. One factor cited in the continued decline is the chronic lack of financing.


In order to build and analyze the database of stalled projects, the AIA will establish a new survey that will begin to identify and analyze stalled projects from around the country that could be moved forward on almost any front but for the lack of financing. The commitment by the AIA involves soliciting information about stalled projects around the country from its members and allied professionals.

The AIA will then analyze and categorize the identified projects by various factors, including building type location (including those locations with a strong, skilled workforce), new construction versus retrofit, and impact on sustainability and livability goals. The AIA will work to identify opportunities for collaboration and financing to help move projects forward.

The Clinton Global Initiative’s Chicago conference is convening diverse stakeholders - including CEOs of American companies and international companies with U.S. operations, national and local government officials, and leaders from the nonprofit sector – to identify effective ways to strengthen U.S. industries, unlock capital for innovation and entrepreneurship, advance energy efficiency, build clean energy infrastructure, and train Americans for the 21st-century workforce.

Topics covered during the meeting will include education, green buildings, the healthcare workforce, manufacturing, rural development, service corps, small business growth, smart infrastructure and workforce training.

About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI. These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the White Paper Architecture Billings as a Leading Indicator of Construction: Analysis of the Relationship Between a Billings Index and Construction Spending on the AIA web site.

About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.

About the Clinton Global Initiative
Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI) convenes global leaders to devise and implement innovative solutions to some of the world’s most pressing challenges. Since 2005, CGI Annual Meetings, which take place in New York each September, have brought together nearly 150 current and former heads of state, 18 Nobel Prize laureates, and hundreds of leading CEOs, along with heads of foundations, major philanthropists, directors of the most effective nongovernmental organizations, and prominent members of the media. These CGI members have made nearly 2,000 commitments, which have already improved the lives of 300 million people in more than 180 countries. When fully funded and implemented, these commitments will be valued in excess of $63 billion. The 2011 Annual Meeting will take place September 19-22 in New York City.

CGI America is the first CGI meeting focused solely on the U.S. The CGI community also includes CGI University, which hosts an annual meeting for undergraduate and graduate students, and CGI Lead, which engages a select group of young CGI members for leadership development and collective commitment-making.

For more information, visit www.clintonglobalinitiative.org.

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Construction Employment Increases In 120 Out Of 337 Metro Areas Between May 2010 & 2011 As Construction Demand Remains Unsteady
Dallas Area and Haverhill-North Andover-Amesbury, MA-NH Top List of Metros Adding Jobs; Atlanta Area Lost the Most, While Lewiston, ID-WA Had the Largest Percentage Decline

Construction employment increased in 120 out of 337 metropolitan areas between May 2010 and May 2011, declined in 162 and stayed level in 55, according to a new analysis of federal employment data released today by the Associated General Contractors of America. Association officials noted that the local employment data reflects the fact that overall construction employment has been unchanged for much of the past year.

“While construction employment has stopped plunging, any sign of a recovery remains spotty at best,” said Ken Simonson, the association’s chief economist. “The close to even split between areas adding and losing jobs is a reminder that for every market doing well, there is another market that is still hurting.”

Dallas-Plano-Irving, Texas, again added more construction jobs (5,600 jobs, 5 percent) than any other metro area during the past year while Haverhill-North Andover-Amesbury, MA-NH, added the highest percentage (22 percent, 800 jobs). Other areas adding a large number of jobs included the Chicago-Joliet-Naperville area (4,600 jobs, 4 percent); Warren-Troy-Farmington Hills, MI (3,700 jobs, 11 percent); the Houston-Sugar Land-Baytown area (2,900 jobs, 2 percent); and St. Louis, MO (2,700 jobs, 4 percent).

The largest job losses were in Atlanta-Sandy Springs-Marietta (-7,400 jobs, -8 percent); followed by Las Vegas, NV (-7,400 jobs, -16 percent); New York City (-6,700 jobs, -6 percent); and Riverside-San Bernardino-Ontario, CA (-5,300 jobs, -9 percent). Lewiston, ID-WA (-18 percent, -200 jobs) lost the highest percentage. Other areas experiencing large percentage declines in construction employment included Las Vegas, and Bend, OR (-15 percent, -500 jobs).

Association officials cautioned that construction employment was unlikely to expand as long as economic growth remained relatively restrained. They said demand for new office buildings, retail facilities and lodging would remain depressed as long as current vacancy rates remain high. At the same time, demand for infrastructure and other publicly funded projects was declining for the first time in years amid the winding down of stimulus projects and budget cuts.

"Some in Washington never met a regulation they didn’t like and others never found a penny they didn’t want to pinch,” said the association’s chief executive officer Stephen E. Sandherr. “Together that makes for a bad way to boost employment and a great way to stifle the private sector and neglect critical economic infrastructure.”

View construction employment figures by metro area and rank.

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PPG white paper compares four leading neutral-reflective, low-e glasses
SOLARBAN R100 glass cuts energy costs, carbon emissions, according to study

PPG Industries (NYSE: PPG) has published Comparing the Energy and Environmental Performance of Neutral-Reflective Low-E Glasses, a white paper that summarizes an energy modeling study of four commonly specified neutral-reflective, low-emissivity (low-e) glasses, including SOLARBAN® R100 glass by PPG.

The 24-page white paper, which is based on analysis performed by the Architectural Energy Corporation (AEC), compares modeled energy savings for neutral-reflective, low-e glass in two building types – a three-story middle school and a 15-story office building – in 12 North American cities.

The study showed that, when compared to the leading and next-best-performing neutral-reflective, low-e glass, Solarban R100 glass provided substantial energy and equipment savings over a building’s lifetime, regardless of climate. In Miami, owners of a prototype window-walled, 15-story office building realized energy and equipment cost savings of more than $1.1 million, or almost $14 per square foot of glazing, during the building’s 30-year life cycle. In Minneapolis, the 30-year life cycle savings totaled more than $650,000, or more than $7 per square foot of glazing area.

The study also highlighted the environmental advantages associated with specifying Solarban R100 glass. Because of its energy-saving characteristics, Solarban R100 glass diminished carbon emissions from the prototype office building by an average of more than 400 metric tons per year. During a typical 30-year building life cycle, such carbon emission reductions could total more than 12,000 metric tons, or the equivalent of removing nearly 2,000 passenger cars from the road over the same time period.

Solarban R100 glass is a neutral-reflective, solar control, low-e glass that is engineered by PPG to provide better solar control performance than competing products in the same architectural glass category. With visible light transmittance (VLT) of 42 percent and a solar heat gain coefficient (SHGC) of 0.23, Solarban R100 glass achieves a 1.79 light-to-solar gain (LSG) ratio that is up to 29 percent greater than that of competing neutral-reflective, low-e glasses.

To download a copy of the white paper visit www.ppgideascapes.com, or to request a hard copy call 888-PPG-IDEA (774-4332).

PPG: BRINGING INNOVATION TO THE SURFACE.(TM)
PPG Industries' vision is to continue to be the world’s leading coatings and specialty products company. Through leadership in innovation, sustainability and color, PPG helps customers in industrial, transportation, consumer products, and construction markets and aftermarkets to enhance more surfaces in more ways than does any other company. Founded in 1883, PPG has global headquarters in Pittsburgh and operates in more than 60 countries around the world. Sales in 2010 were $13.4 billion. PPG shares are traded on the New York Stock Exchange (symbol: PPG). For more information, visit www.ppg.com.

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Decrease in Home Sizes and Lots Nearing Bottom
Best business conditions since 2007 for residential market

The collapse of the housing market resulted in greater interest in smaller homes and lot sizes, but that appears to be leveling off. There continues to be interest from homeowners in investing in their properties, particularly with regards to outdoor living space. Accessibility within the home remains a concern, especially for an aging population, along with ongoing demand for more flexible and open design within homes. Business conditions for residential architects are showing improving conditions with the highest billings score since mid-2007. These findings are from the American Institute of Architects (AIA) Home Design Trends Survey that focused specifically on overall home layout and use in the first quarter of 2011.

“Overall home and lots sizes showing signs of increasing slightly indicates that the housing market is stabilizing after being in a downward spiral since 2007,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “But consistent with the last several years, there remains a preference for open space layout allowing for more flexibility and less interest in formal spaces and rooms.”

Overall home layout and size trends

Residential Elements                                 
(% of respondents that reported decreases)    2011   2010
Square Footage                                                52%     57%
Lot Size                                                          22%     32%
Volume                                                           18%     21%

Residential Elements
(% of respondents that reported increases)    2011   2010
In-Home Accessibility                                       58%     60%
Open Space Layout                                          49%     56%
Access Into/Out of Home                                  48%     49%
Informal Space                                                40%     48%
Single-Floor Plan                                              35%     40%
Lot Size                                                          22%     32%

Outdoor living and landscaping trends

Residential Elements
(% of respondents that reported increases)    2011   2010

Low Irrigation landscaping                                63%     63%
Outdoor Living Space                                       60%     56%
Rainwater Catchment                                       49%     55%
Blended Indoor/Outdoor Living                          46%     48%
Exterior/Security Lighting                                 30%     33%

Housing market business conditions

AIA Home Design Survey Index for Q1 2011 (any score above 50 is positive)

  • Billings: 51
  • Inquiries for new projects: 60

Baker continued, “The home improvement market, including both additions and structural alterations as well as remodeling projects, is extremely healthy right now and with the exception of the affordable home market, all of the other sectors are more positive than the same time a year ago.”

Specific residential segments (index score computed as % of respondents reporting improving minus % reporting weakening conditions)

  • Kitchen and bath remodeling: 52
  • Additions / alterations: 51
  • First-time buyer / affordable home market: -22
  • Move-up home market: -16
  • Custom / luxury home market: -19
  • Townhouse / condo market: -34
  • Second / vacation home market: -51

About the AIA Home Design Trends Survey
The AIA Home Design Trend Survey is conducted quarterly with a panel of 500 architecture firms that concentrate their practice in the residential sector. Residential architects are design leaders in shaping how homes function, look, and integrate into communities and this survey helps to identify emerging trends in the housing marketplace. Business conditions are also monitored on a quarterly basis. Future surveys will focus on specialty rooms and systems (September 2011) and community design trends (December 2011).

About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.

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Greg Turner named President of MIT Alumni Association

TurnerDuran Archtitects, LP president Greg Turner, AIA has been named president of the Alumni Association of the Massachusetts Institute of Technology, effective June 30, 2011. In this role he will lead the global community of over 125,000 living graduates of the Institute.

The position of president is the senior volunteer role in the Association, which was founded in 1875 to advance the mission of MIT and its alumni. Turner is the first Houstonian in over thirty years to serve in this capacity. Additionally, he will serve ex officio on the board of the MIT Corporation, the Institute’s governing body.

Mr. Turner received his Bachelor of Science and Master of Architecture degrees from MIT.

TurnerDuran Architects, LP has for over 27 years provided architectural services in planning, designing and managing projects, primarily religious and cultural, for non-profit and institutional clientele throughout Southeast Texas.

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PPG announces price increase for industrial coatings products in North America
Coil and extrusion coatings prices to increase Sept. 1 or as permissible by contract

PPG Industries’ (NYSE:PPG) industrial coatings business announced today that it is raising prices by an average of 5 to 8 percent on all its coil and extrusion coating products in North America, effective Sept. 1 or as permissible by contract.

“Raw material costs have risen dramatically during the first two quarters of 2011, and they are continuing to trend upward,” said Richard Zoulek, PPG general manager, industrial coatings, U.S. and Canada. “While PPG has implemented aggressive cost-control measures throughout its operations, these efforts have not sufficiently offset surging raw material costs, thus necessitating this price increase.”

Sales representatives will communicate price increase details to their customers for all products affected.

About PPG
PPG Industries’ vision is to continue to be the world’s leading coatings and specialty products company. Founded in 1883, the company serves customers in industrial, transportation, consumer products, and construction markets and aftermarkets. With headquarters in Pittsburgh, PPG operates in more than 60 countries around the globe. Sales in 2010 were $13.4 billion. PPG shares are traded on the New York Stock Exchange (symbol: PPG). For more information, visit www.ppg.com.

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Architecture Billings Index Remains in Reverse
Inquiries for new projects drop to slowest pace of growth since February 2010

OOn the heels of a sizeable decrease in April, the Architecture Billings Index (ABI) slowed even further in May. 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 May ABI score was 47.2, a slight decrease from a reading of 47.6 the previous month. This score reflects a continued decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 52.6, down from a mark of 55.0 in April, its lowest level in almost a year and a half.

“Whatever positive momentum that there had been seen in late 2010 and earlier this year has disappeared,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The broader economy looks to be entering another soft spot, and certainly state budget constraints are adversely affecting the profession’s ability to work on institutional projects. But there is no denying that the prolonged credit freeze from lenders for financing commercial projects is the number one challenge to a recovery for the design and construction industry.”

Key May ABI highlights:
  • Regional averages: West (49.3), Northeast (47.6), South (47.5), Midwest (45.9)
  • Sector index breakdown: multi-family residential (53.6), mixed practice (49.1) commercial / industrial (46.5), institutional (44.9)
  • Project inquiries index: 52.6

About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI. These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the White Paper Architecture Billings as a Leading Indicator of Construction: Analysis of the Relationship Between a Billings Index and Construction Spending on the AIA web site.

About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.

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American Institute of Architects (AIA) Files Comments Opposing Small Business Administration’s Proposed Size Standards
Effect on Small Architecture Firms Would Be “Devastating,” Warns AIA

The American Institute of Architects (AIA) today filed comments with the Small Business Administration (SBA) opposing the SBA’s proposal to increase the number of businesses that qualify as a small business, stating that the new standard will be “devastating” to the architecture profession.

“The AIA strongly opposes the proposed rule and asks that the SBA not change the current $4.5 million standard until there are further discussions regarding the appropriate size standard,” said AIA EVP/Chief Executive Officer Robert Ivy, FAIA, in the filing. “The effect on small architecture businesses would be devastating, because the competition from medium and large firms would decimate any competitive advantage that small firms have in the federal marketplace.”

The SBA currently uses the $4.5 million (in annual receipts) size standard to help determine which small businesses qualify under its set aside program, under which some $190 billion of the $700 billion in contracts the federal government issues each year goes to firms who qualify as small businesses. The SBA is now proposing to raise the size standard to $19 million in annual receipts.

“For our members, the AIA estimates that over 91 percent of architecture firms fall under the current $4.5 million standard,” Ivy said. “If the standard is raised to $19 million, over 97 percent of firms will qualify as a small business.”

The SBA proposal lumps architecture, engineering, interior design, landscape architecture and mapping into the same $19 million bucket. The effect of the SBA proposal is to have large architectural firms who have a variety of disciplines qualify for small business benefits. However, the AIA states that such aggregated firms do not represent the current state of small architecture firms, 80 percent of which have 10 or fewer employees.

“We would like to work with the SBA to explore other possibilities so that the small business standard covers truly small businesses,” Ivy said.

About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.

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American Institute of Architects (AIA) Calls on Obama Administration to Back Easier Credit and Faster Permitting Process
Accelerating Permit Process Means 6 percent Jump in Construction Spending, AIA Study Finds

The American Institute of Architects (AIA) today pointed to two specific initiatives the Obama Administration could support to improve access to credit and remove un-necessary regulations that are hindering jobs growth in the design and construction industry.

In a speech Monday in North Carolina ahead of a meeting with his Jobs and Competitiveness Council, President Obama called for better access to credit for small businesses as well as getting rid of un-necessary regulations hindering business development and job creation. Obama also renewed his Administration’s “Better Buildings Initiative,” which would encourage more energy efficiencies in commercial buildings.

“The AIA has been a longtime proponent of energy efficiency and the Administration’s Better Buildings Initiative amplifies that American businesses could save $40 billion a year in utility bills,” said AIA President Clark Manus, FAIA. “But with one in 6 construction workers un-employed, there are other initiatives that the Administration can easily embrace beyond this importance initiative.”

Two specific initiatives worthy of Obama Administration support are:
  • The Capital Access for Main Street (CAMS) Act, introduced by Rep. Ed Perlmutter (D-CO), which would temporarily allow small community banks with under $10 billion in assets to spread out or amortize a portion of their commercial real estate loans over a seven-year period. These banks, which provide many of the loans to our small businesses, would then have more liquid capital available to make responsible loans.
  • Support a streamlined building permit process. An AIA study in 2006 found that communities with a more efficient building permit process can gain millions of dollars in tax revenues and significantly bolster their economic development. Implementation of a more responsive permit process over a five year period could result in a 16.5 percent increase in property taxes and a 5.7 percent increase in construction spending.

About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.

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22 States And D.C. Add Construction Jobs Between May 2010 & 2011, As Job Growth Remains Sluggish And Uneven Amid Tepid Demand For New Construction
Michigan and Texas Led Yearly Pickup; Nevada and Florida Experienced the Worst Job Losses; Florida and South Dakota Had Sharpest Monthly Gains; Alaska and California Had the Worst Losses

Construction employment growth remained sluggish and uneven in May as nearly half - 22 states plus the District of Columbia - added jobs over the past year while the remaining states all lost construction jobs, according to an analysis by the Associated General Contractors of America of state employment data released by the Labor Department. Association officials said the figures reflect the fact that industry-wide employment has stagnated as the result of tepid demand for most private construction and declines in public construction.

“It’s not surprising to see close to an even split between states adding and losing jobs given that year over year construction employment for May was unchanged,” said Ken Simonson, the association’s chief economist. “There just isn’t enough demand for new construction to drive nationwide boosts in construction employment.”

Of the 23 locations with year-over-year increases, the largest percentage gains occurred in Michigan (5.2 percent, 6,300 jobs); followed by Hawaii (4.2 percent, 1,200 jobs); Texas (4.1 percent, 23,200 jobs); Tennessee (4.0 percent, 4,200 jobs); and the District of Columbia (3.8 percent, 400 jobs). Texas, Michigan, Illinois (5,900 jobs, 3.0 percent), Tennessee and Indiana (2,700 jobs, 2.3 percent) added the largest number of jobs.

Of the 27 states with decreases over the year, the largest percentage drop in construction employment took place in Nevada (-10.8 percent, -6,500 jobs); followed by Rhode Island (-10.0 percent, -1,600 jobs); Georgia (-8.5 percent, -12,700 jobs); Vermont (-7.9 percent, -1,100 jobs); and Colorado (-7.7 percent, -8,900 jobs). Florida (-14,300 jobs, -4.1 percent) lost the largest number of jobs; followed by Georgia; Colorado; North Carolina (-8,000 jobs, -4.5 percent); and Maryland (-6,700 jobs, -4.6 percent).

Simonson noted that 23 states added jobs during the month, while 27 states lost jobs. Construction employment was unchanged for the month in the District of Columbia. South Dakota had the largest percentage rise (7.4 percent, 1,400 jobs); followed by Hawaii (6.0 percent, 1,700 jobs); Kansas (3.9 percent, 2,100 jobs); Michigan (3.2 percent, 3,900 jobs); and Minnesota (2.8 percent, 2,200 jobs). Florida (4,100 jobs, 1.2 percent) added the largest number of jobs; followed by Michigan, Minnesota, Kansas, and Colorado (2,000 jobs, 1.9 percent).

The largest monthly percentage losses occurred in Alaska (-4.9 percent, -800 jobs); followed by Rhode Island (-4.0 percent, -600 jobs); Wyoming (-3.8 percent, -900 jobs); South Carolina (-3.3 percent, -2,600 jobs) and Idaho (-3.0 percent, -900 jobs). The largest number of construction job losses over the month was in California (-5,000 jobs, -0.9 percent); Maryland (-3,100 jobs, -2.2 percent); South Carolina, Ohio (-2,500 jobs, -1.5 percent) and Pennsylvania (-2,400 jobs, -1.1 percent).

Association officials cautioned that construction employment was likely to remain spotty as long as broader economic growth remains relatively modest. They noted that increased regulatory burdens, stalled infrastructure investment programs and out of control entitlement spending were hampering stronger economic growth. They encouraged federal officials to enact the regulatory reforms and infrastructure measures outlined in the Association’s recently released “Case for Infrastructure & Reform.”

“Increasing red tape, cutting infrastructure investments and avoiding the causes of our federal deficit aren’t helping the economy or boosting construction employment,” said Stephen Sandherr, the association’s chief executive officer.

View construction employment figures by state and rank.

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Construction Material Cost Increases Plague Contractors In May As Finished Building Prices Remain Flat, Threatening Firms' Viability
Latest Producer Price Index Figures Show Contractors are Paying More for Gypsum, Asphalt, Aluminum, Plastics and Steel, Costs They Can’t Pass On Amid Stagnant Demand for Construction

Contractors suffered from a new round of price increases for key materials in May but were largely unable to pass their costs along to customers, according to an analysis of producer price index figures released today by the Associated General Contractors of America. Association officials said the ongoing cost squeeze—a result of sluggish demand for construction—threatens to drive more construction employees and firms out of work unless public officials lower barriers to public and private investment.

“New cost pressures bubbled up in May, even as prices moderated for a few items,” said Ken Simonson, the association’s chief economist. “Meanwhile, contractors have largely held the line on their bids in order to win work while demand for construction remains tepid at best.”

Simonson noted that the producer price index for all construction materials increased by 0.9 percent in May and 7.5 percent over the past 12 months. The year-over-year figure has accelerated steadily for the past four months. Meanwhile, the price of finished buildings was flat in May and rose only 1.8 percent or less over the past year, depending on building type.

Simonson said there were substantial price increases in May for wallboard and other gypsum products, which rose 4.3 percent from April; asphalt paving mixtures and blocks, 3.2 percent; aluminum mill shapes, 2.6 percent; construction plastics such as pipe and insulation, 1.8 percent; and steel mill products, 1.1 percent. He added that two other key materials had price declines for the month but were still far costlier than a year ago: diesel fuel, down 3.2 percent for the month but up 39.5 percent since May 2010, and copper and brass mill shapes, down 4.0 percent since April but up 17.0 percent year-over-year.

“Federal spending on infrastructure is fading fast, while most private demand has yet to pick up,” Simonson observed. “As a result, contractors are being pinched by higher costs they can’t roll into their bids, and many firms are at risk of closing their doors, which would add to the industry’s already-high 16 percent unemployment rate.”

Association officials said it is vital that Congress and the White House enact long-overdue infrastructure bills and repeal a law that will require all levels of government to begin withholding three percent of payments to contractors by 2013. “Forcing contractors to earn less even as you slash the amount of work available for them to perform is not a good way to boost employment or revive the economy,” said Stephen E. Sandherr, the association’s chief executive officer.

View the latest producer price index tables for construction.

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Building for Weather: Balancing Cost vs. Risk
By Reinhard Schneider

No matter what part of the world you live in, weather is an inescapable force. While modern building techniques have evolved to help protect structures from weather-related damage, it is impossible to make a building impenetrable and, quite often, the pursuit of the strongest building may lead to extra initial costs that may strain the construction budget for some building owners.

In today’s building world, how does one decide what extra precautions to take? Certainly cold or windy regions where hail may be prevalent or especially rainy areas such as Seattle require a specialized set of considerations.

A study by the Multi-hazard Mitigation Council (MMC) for the Federal Emergency Management Agency (FEMA) found that every $1 spent on loss prevention saves society (individuals, states and communities) an average of $4 in future reduced losses (Insurance Institute for Business and Home Safety).

But exactly where do architects and building owners draw the risk management line when constructing a new building? Smart architects make lasting buildings by balancing the anticipated needs of the building with budgetary realities and appropriate product solutions to strive for long-term performance.

Protecting Interiors from Exterior Conditions
Although wind, rainstorms and hail are all different phenomena, each is capable of causing extreme wind load, excess moisture and impact damage. The damage these events cause to the interior of buildings is more often caused by exterior failures that allow the elements to reach inside.

To protect buildings against weather, the best offense is a good defense. Using a moisture-resistant fiberglass-mat gypsum panel, such as DensGlass® Sheathing from Georgia-Pacific Gypsum, can help prevent water intrusion. Controlling moisture entry from the outside can help prevent mold growth inside.

In areas where coastal or rain-driven flooding is a danger, there’s further need to protect exterior walls against water damage. In August 2008, FEMA released new guidelines1 indicating that non-paper-faced gypsum is acceptable for use in Special Flood Hazard Areas (SFHAs). Several non-paper-faced Dens® Brand gypsum panels from Georgia-Pacific Gypsum may be used under the new FEMA guidelines for wall and ceiling applications in the thousands of SFHAs in the United States. These gypsum panels are faced with fiberglass mats and feature moisture-resistant cores to resist the effects of surface water exposure during and after the construction cycle, thus providing resistance to subsequent mold growth.

One potential strategy is the use of drainable dryable wall assemblies, which use durable building materials in a unique wall configuration that allows the wall to drain and dry out after a flood or similar event. 2 The wall is built so the chair molding and the base molding can be removed. After removal, the gaps behind the chair molding and the base molding provide space where the wall can be sprayed out with a hose and left to dry.

The technique involves moving the wiring above the flood level and spraying a 2-inch-deep layer of closed-cell polyurethane foam between the studs. Leaving the remaining space empty, the fiberglass mat drywall, which offers better interior protection from moisture than traditional paper faced drywall, is applied. This creates small gaps at the top and bottom of the wall that are covered by crown molding and baseboard. If a flood occurs, the molding can be pried off and the wall cavity can be flushed out from the top; then the water is vacuumed up at the bottom, and fans are set to dry the wall quickly.

Averting Roof Remediation
According to the Ohio Insurance Institute, businesses in Ohio reported 3,100 claims totaling $11.1 million after a single windstorm in 20093. Higher wind-uplift ratings on roofs may qualify for lower insurance premiums and can help protect buildings from anticipated weather conditions. Choosing a cover board that can add to the durability of a roofing system leads to a lower total cost of ownership through easier maintenance and lowered insurance premiums.

For roofing, durability means more than just strength – it also means increased protection for the people and assets inside buildings, whether it is from wind, rain, snow or sleet. A suitable cover board, such as DensDeck® Roof Board, can help control incidental moisture and protect against impact including damage caused by hail.4 Choosing the right cover board will protect the investment in your buildings, simply because the roof will be able to perform better and last longer.

Knowledge is power in the pursuit of construction buildings suited to withstand weather. Along with many other responsibilities, architects must also be up to date on local weather risks and proper code requirements for building envelopes. Deciding whether to merely meet or exceed code, however, can be a challenge best discussed – at length – with the building’s future owner.
  1. Flood Damage-Resistant Materials Requirements, FEMA, 2008
  2. Please consult a qualified remediation contractor prior to use of this strategy or any other flood remediation strategy to consider potential contamination from flood waters and other factors. Georgia-Pacific Gypsum does not provide flood remediation services.
  3. Nationwide Insurance, Preventing Wind Damage
  4. All components used in roofing systems, including DensDeck Roof Boards, may be damaged from exposure to excess moisture and should be protected from exposure to moisture before, during and after installation. For additional information concerning moisture management and DensDeck Roof Boards, consult the DensDeck technical brochure available at www.gpgypsum.com.

About Reinhard Schneider
Reinhard Schneider is the Technical & Product Development Manager Commercial Roofing with Georgia-Pacific Gypsum LLC , a leading manufacturer of gypsum wallboard products in North America. A graduate of Kent State University's School of Architecture in Kent, Ohio, he practiced architecture internationally and in Ohio for 15 years before focusing his efforts on commercial roofing. For more than 20 years he has been involved in the development, manufacturing, testing and marketing of commercial roofing systems. He joined the Goodyear/Versico roofing division in Akron, Ohio as Marketing Manager and had responsibilities for product development and contractor training. Hundreds of contractors attended his comprehensive, hands-on training courses each year. Reinhard then took a position as National Sales and Marketing Manager for Clements National Corp. / Cadillac Products in Chicago, IL, working with a number of major membrane manufacturers to design and manufacture modified bitumen and thermoplastic welding equipment. For the last eleven years Reinhard has been heading up the Technical Development of DensDeck at the Georgia Pacific Corp. He has written several articles on roofing technology that have been published in RCI Interface, Architectural Roofing and Waterproofing and Roofing Contractor Magazine. He is a member of RCI, AIA, RICOWI and SPRI, where he is currently a member of the Executive Board. In recent years, he has conducted numerous symposiums throughout the United States and Canada addressing thousands of architects, consultants and building officials.

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ARXX Corporation Announces Another First For The ICF Industry

ARXX Corporation announced that it has completed the process to have all of its products available in Google SketchUp 3D becoming the first Insulating Concrete Form (ICF) company to have this tool. Google SketchUp is a user-friendly 3D modeling program incorporating an intelligent drawing system and product models. Google SketchUp is showing rapid growth and adoption within the design professional community as well as by contractors, builders and homeowners. Using Google SketchUp can incorporate ARXX ICF products into buildings instantly, making the design process easier and faster than ever.

"We take leadership and innovation seriously," said Gael Mourant, President & CEO of ARXX. "Being a leader requires taking the steps to continually evolve products and services. We want to ensure that designing and building with our products is as easy and accessible as possible. We recognize the role that technology is playing in facilitating how people design buildings. Google SketchUp is another complementary tool being added to our existing technical resource base. At ARXX we're dedicated to providing the best customer and technical support in the industry," she added.

Access to the ARXX Google SketchUp product models can made through the Technical Resources section of www.arxx.com. The addition of SketchUp complements the existing Building Information Modeling (BIM) files and CAD product and design library.

About ARXX
ARXX is a leading supplier of Insulating Concrete Forms (ICFs) for green, energy-efficient residential and commercial construction. ARXX products have been used in over 105,000 projects, representing 140 million square feet of walls and foundations, throughout the United States and Canada. ARXX products enable significant energy savings, greater comfort, security and quiet, and a faster build than conventional construction. ARXX products have been used in numerous LEED-certified projects have received major industry and sustainability awards. See www.arxx.com for more information.

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Turner Building Cost Index Forecasts Construction Cost to Increase Slightly in Second Quarter
Increased construction material costs are counter-balanced by level of market activity and easing of commodity pricing pressure

Turner Construction Company announced that the Second Quarter 2011 Turner Building Cost Index has slightly increased over the First Quarter of 2011. The Turner Building Cost Index measures costs in the non-residential building construction market in the United States. The Turner Building Cost Index of 811 reflects a 0.62% increase from the First Quarter 2011 and 1.63% increase from the Second Quarter 2010.

Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index said, “The market dynamic of restrained demand and increasing material cost have been the major influencers on construction costs over the past three quarters and continues through the second quarter of 2011. Although commodity prices have appeared to ease since the end of the first quarter, the second quarter Index reflects the ongoing impact on increasing construction material costs. The level of construction activity is a factor limiting the influence of labor cost increases on the overall cost of construction.”

Approximately 90% of Turner’s business is performed under contract arrangements, where Turner provides extensive pre-construction planning services before the contract price is fixed and before construction starts. By providing pre-construction services and utilizing enhanced procurement strategies, Turner effectively manages the market risks associated with cost-related issues.

Turner has prepared the construction cost forecast for more than 80 years. Used widely by the construction industry and Federal and State governments, the building costs and price trends tracked by The Turner Building Cost Index may or may not reflect regional conditions in any given quarter. The Cost Index is determined by several factors considered on a nationwide basis, including labor rates and productivity, material prices and the competitive condition of the marketplace. This index does not necessarily conform to other published indices because others do not generally take all of these factors into account.

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American Institute of Architects (AIA) Files Comments Opposing Small Business Administration’s Proposed Size Standards

Effect on Small Architecture Firms Would Be “Devastating,” Warns AIA

The American Institute of Architects (AIA) today filed comments with the Small Business Administration (SBA) opposing the SBA’s proposal to increase the number of businesses that qualify as a small business, stating that the new standard will be “devastating” to the architecture profession.

“The AIA strongly opposes the proposed rule and asks that the SBA not change the current $4.5 million standard until there are further discussions regarding the appropriate size standard,” said AIA EVP/Chief Executive Officer Robert Ivy in the filing. “The effect on small architecture businesses would be devastating, because the competition from medium and large firms would decimate any competitive advantage that small firms have in the federal marketplace.”

The SBA currently uses the $4.5 million (in annual receipts) size standard to help determine which small businesses qualify under its set aside program, under which some $190 billion of the $700 billion in contracts the federal government issues each year goes to firms who qualify as small businesses. The SBA is now proposing to raise the size standard to $19 million in annual receipts.

“For our members, the AIA estimates that over 91 percent of architecture firms fall under the current $4.5 million standard,” Ivy said. “If the standard is raised to $19 million, over 97 percent of firms will qualify as a small business.”

The SBA proposal lumps architecture, engineering, interior design, landscape architecture and mapping into the same $19 million bucket. The effect of the SBA proposal is to have large architectural firms who have a variety of disciplines qualify for small business benefits. However, the AIA states that such aggregated firms do not represent the current state of small architecture firms, 80 percent of which have 10 or fewer employees.

“We would like to work with the SBA to explore other possibilities so that the small business standard covers truly small businesses,” Ivy said.

About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.

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HUD Announces Over $48 Million For Community Development And Affordable Housing In Florida For Remainder Of 2011

U.S. Housing and Urban Development Secretary Shaun Donovan today announced Miami and Miami-Dade County will receive more than $48 million to support community development and produce more affordable housing in Florida. HUD’s annual funding will also help find homes for individuals and families living on the streets and provide permanent housing for individuals living HIV/AIDS.

The FY2011 Continuing Resolution significantly reduced overall funding for the CDBG and HOME programs compared to last year. The nation’s CDBG funding was reduced by more than $600 million, or approximately 16.5 percent, while the HOME program funding was reduced by more than $200 million, or approximately 11.7 percent.

“This year’s block grant funding requires tough choices that we would not have made in better circumstances,” HUD Region IV Regional Administrator Ed Jennings, Jr. “As we work under the challenges of our nation’s deficit, we must also understand that these programs are absolutely essential in promoting community development, producing affordable housing, helping our homeless and even supporting long-term disaster recovery.”

The funding announced today includes:

  • $23,788,367 in Community Development Block Grant (CDBG) funds;
  • $1,155,902 in HOME Investment Partnerships (HOME) funding;
  • $10,641,810 in Emergency Shelter Grant (ESG); and
  • $12,498,939 for Housing Opportunities for Persons with AIDS (HOPWA).
  • $48,085,018 TOTAL

Since 1974, HUD’s Community Development Block Grant (CDBG) Program has provided approximately $132 billion to state and local governments to target their own community development priorities. Economic development, infrastructure, and the improvement of public facilities have traditionally been the largest uses of CDBG. It is also an important catalyst for job growth and business development. Annual CDBG funds are distributed to communities according to a statutory formula based on a community’s population, poverty, and age of its housing stock, and extent of overcrowded housing.

HOME (HOME Investment Partnerships Program is the largest federal block grant to state and local governments designed exclusively to produce affordable housing for low-income families. Since 1992, more than 600 communities have completed over one million affordable housing units, including 428,000 for new homebuyers. In addition, 242,000 tenants have received direct rental assistance.

Emergency Shelter Grants (ESG) provides homeless persons with basic shelter and essential supportive services. It can assist with the operational costs of the shelter facility, and for the administration of the grant. ESG also provides short-term homeless prevention assistance to persons at imminent risk of losing their own housing due to eviction, foreclosure, or utility shutoffs.

HUD’s Housing Opportunities for Persons with AIDS (HOPWA) grants are distributed to states and cities based on the number of AIDS cases reported to the Centers for Disease Control and Prevention. The grants provide resources for operating community residences and providing rental assistance and support services to individuals with HIV/AIDS and their families. In addition, the HOPWA program also helps many communities develop strategic AIDS housing plans and fill in gaps in local systems of care. A stable home environment is a critical component for low-income persons managing complex drug therapies and potential side effects from their treatments. Improvements in coordination of housing resources and related HIV medical care and services are underway as HUD and other agencies collaborate with communities to implement actions under the National HIV/AIDS Strategy.

HUD is instituting several important program priorities in the upcoming year. First, the Department’s consolidated planning process will be enhanced. Largely unchanged since the mid-1990s, the ‘Con Plan’ will be simplified by integrating HUD’s technology systems and eliminating the need to prepare a separate annual performance report. Second, HUD’s Office of Community Planning and Development is moving rapidly to implement its unified OneCPD technical assistance process which is particularly important as many local governments continue to struggle with budgetary pressures resulting from the economic downturn. Finally, HUD is again urging grantees to consider the needs of returning veterans and their families in the design and administration of these formula programs.

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Construction Employment Virtually Unchanged In May As Industry Adds 2,000 Jobs, Unemployment Rate Hits 16.3 Percent
Declines in Public Sector Investments Are Keeping Construction Employment Levels Stagnant after Years of Severe Job Losses, Conditions Unlikely to Change Soon

Construction employment was virtually unchanged in May as the industry added just 2,000 jobs for the month and the sector’s unemployment rate declined to 16.3 percent, according to an analysis of new federal employment data released today by the Associated General Contractors of America. Association officials said that declines in public sector construction demand are offsetting slight increases in private sector demand, resulting in stagnant construction employment levels that are unlikely to change soon.

“At the current rate of growth, the construction industry will continue to experience double-digit unemployment rates for a long time,” said Ken Simonson, the association’s chief economist. “Simply put, there just isn’t enough demand for construction to fuel the kind of hiring needed to get industry employment back to where it was in 2007.”

The construction economist noted that the nonresidential construction sectors lost 6,200 jobs in May, while the residential sector added 8,200 jobs. Within the nonresidential sector, employment in heavy and civil engineering construction increased by 3,100 for the month as work on highway and other public works projects accelerated with the warmer weather. Meanwhile, employment declined in the nonresidential specialty trade contractors sector while the nonresidential building category added only 600 jobs.

Association officials said that construction employment is unlikely to change much one way or the other for the rest of the year. They noted that construction spending figures released earlier in the week indicated that federal, state and local governments are cutting investments in infrastructure and other construction projects. Those declines are largely being offset by slight increases in private sector demand for construction, especially in power construction.

“As long as Washington starves infrastructure instead of fixing entitlement spending, construction employment is likely to remain weak,” said Stephen E. Sandherr, the association’s chief executive officer. “We are never going to balance the budget by deferring maintenance and keeping employment levels low.”

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