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AIA to Congress: Act Now to Jump Start Building Sector of Economy
Architect testifies about need for polices designed to help small businesses during economic crisis

Tampa-based architect, Mickey Jacob, FAIA, unveiled the American Institute of Architects’ (AIA) Rebuild & Renew plan for both short- and long-term economic recovery to the House Committee on Small Business at a hearing today.

“Small business does not want a bailout. We want access to loans to bridge the economic downturn to help fund operational costs. We want relief from the premium costs of health insurance. We want incentives for people to build, buy, and renovate their homes and businesses. We want the availability of grants that assist in the acquisition and implementation of new technologies to keep small business competitive in the world wide marketplace. These are investments in the future of the country,” Jacob testified.

The prolonged economic slump is having a far-reaching, adverse impact on the design and construction sector that accounts for roughly ten percent of U.S. Gross Domestic Product. In addition to widespread layoffs and firm closings, architecture firms are having an extremely difficult time securing financing for proposed projects. The AIA Architecture Billings Index – a leading economic indicator of future construction activity – shows no signs of an imminent turnaround.

AIA policy recommendations:

• Make financing available for design and construction projects
• Provide tax relief for small businesses
• Make tax policies work for recovery
• Rebuild our infrastructure for the 21st century
• Build the new green economy

Specific details of the AIA Rebuild & Renew plan can be found here.

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. By using sustainable design practices, materials, and techniques, AIA architects are uniquely poised to provide the leadership and guidance needed to provide solutions to address climate change. AIA architects walk the walk on sustainable design. Visit www.aia.org/walkthewalk.

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Waterless Co. Donates Urinals for USGBC Green School Campaign

Waterless Co Inc. announces they have donated 30 No-Flush™ waterless urinal systems to the U.S. Green Building Council’s (USGBC) National Green Schools Campaign.

This is the third year for the program, which involves 11 educational and environmental groups throughout the country. The program is designed to develop safer, healthier, and more sustainable learning environments for children and teachers.

Ultimately, the goals of the program are higher test scores and lower absenteeism rates as a result of improved indoor air quality and other factors that make the learning experience more advantageous.

“There is also a big focus on making school facilities more energy and water efficient,” says Klaus Reichardt, founder and managing partner of Waterless No-Flush Urinals. “To help them conserve water, we are donating 30 waterless systems to be installed in three different schools.”

Reichardt says that along with saving water, the waterless systems are also a cost savings, helping to reduce water/sewer and maintenance charges for the schools.

“The [USGBC] initiative is also intended to show that Green schools cost less money to operate,” adds Reichardt. “The [waterless] urinals will help them accomplish this.”

USGBC’s Most Important Work
Making America’s schools healthier and Greener is considered one of the most important tasks of the USGBC, according to the organization's president and CEO, Rick Fedrizzi.

“There is no more important work we have before us,” he says. “Our National Green Schools Campaign has sought to make this a priority item for school districts, government bodies, and those who set the national agenda for our schools.”

Adds Reichardt, “Anything we can do to help schools become healthier, Greener, more sustainable, and reduce costs are top priorities for us as well. We have worked with school districts all over North America as well as internationally in this regard and intend to do much more in coming years.”

About Waterless
Waterless Co. Inc. has established a reputation as an innovative manufacturer, serving the building, plumbing, and janitorial industry for over 18 years. Based in Vista, Ca, Waterless Co. offers quality, innovation and expertise in water conservation and high efficiency products for building owners with a full line of Waterless No-Flush urinals, cleaning liquids, and cost saving accessories. Visit: www.waterless.com

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Horton Adds Smoke Rated Seal To Self-Closing ICU Door System

Horton Automatics' Profiler® self-closing ICU door system with no power needed is now available with a smoke-rated seal. Exceeding NFPA 105 air leakage requirements, this system can be specified in a single slide track or trackless configuration for openings ranging from 7 to 9 feet.

In use, the sliding panel opens manually like a regular ICU door and then closes quietly as a person enters or exits. If needed, the door can be left open and comes with full breakout capability. New options with this smoke-rated system include an electro-magnet hold-open device that ties to the fire alarm system in a healthcare facility and will automatically close the door when an alarm is activated. Another exclusive feature of this product is the magnet-to-latch option in place of the positive latch. When the door closes, the magnet-to-latch keeps the door securely closed and meets the full requirements of NFPA 101 (check with your local code inspector before specifying).

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Live Deck Collapse, New DeckTools™ Software and Seminars at DeckExpo

Editors’ Note: Contact Shelby Lentz to schedule a media appointment at the show and for hi-res photography.

Since 2003, there have been thousands of reported injuries* and several deaths as a result of deck failures. To help raise awareness about the prevalence of deck collapse and promote code-compliant deck construction, Simpson Strong-Tie will stage a live deck collapse at DeckExpo in Indianapolis on October 28-29 at 1 p.m. in booth 302. In addition, educational seminars and new products will be featured at the show; visit Simpson Strong-Tie booths 1205 and 1305.

New DeckTools™ Software 3.0
DeckTools™ sales, design and estimating software program for decks makes it easy for deck builders and suppliers to create one-of-a-kind deck designs right from their laptops. The program allows users to customize nearly every detail, from the deck shape and railings to material choices, while quickly generating plans, proposals and material lists. Unlike many deck software programs, DeckTools software features photo-realistic 3D views that are rendered in real time. DeckTools was launched in 2003 and since that time has developed a large community of users. “The market is getting tougher because of the economy, but we are very busy, thanks to DeckTools. I’ve almost doubled my sales closing rate,” said Clemens Jellema, president of Fine Decks Inc. in Maryland.

The latest version of the program, DeckTools Software 3.0, will be available at DeckExpo and includes new features, such as Simpson Strong-Tie connectors and fasteners at key connections in deck construction and DWG and DXF (CAD-compatible) file export. The software retails for $1895.00; DeckExpo attendees will receive 20% off the retail price if purchased at the show. For more information about the software, visit the DeckTools site.

A DeckTools Seminar is scheduled during the DeckExpo Conference on October 27 from 1:30 to 3:30 p.m. In addition, DeckTools™ software demonstrations will be held daily at the Simpson Strong-Tie booth 1305.

Deck Framing Connections Seminar
Simpson Strong-Tie and the North American Deck and Railing Association (NADRA) will host a Deck Framing Connections Seminar at the DeckExpo Conference. The seminar reviews the IBC and IRC code requirements and methods to satisfy them. The course also identifies the common causes of deck failure, discusses corrosion issues, and provides guidelines for selecting the proper connectors and fasteners. The Deck Framing Connections Seminar will be held October 27 from 8 a.m. to 12:15 p.m.

New Deck Products
Simpson Strong-Tie will showcase its complete line of deck connectors and fasteners, including Swan Secure™ corrosion resistant and stainless steel fasteners, as well as Quik Drive® auto-feed screw driving systems. The new versatile DTT2Z deck tension tie fulfills two critical connections in deck construction. It’s a safe, cost-effective way to attach rail posts to the deck framing and complies with IRC requirements for laterally tying the deck to the house.

The DTT2Z and many other products are featured in the new Simpson Strong-Tie Deck Framing Connection Guide. The guide includes best practices for building safe, code-compliant decks. It can be downloaded at the Deck Center on strongtie.com.

DeckExpo at a Glance:
Tues, Oct. 27 Deck Framing Connections Seminar 8 a.m.
Tues, Oct. 27 DeckTools Seminar 1:30 p.m.
Wed, Oct. 28 Live Deck Collapse 1:00 p.m. Booth 302
Wed, Oct. 28 DeckTools Demonstrations Booth 1305 - New Products Booth 1205
Thurs, Oct. 29 Live Deck Collapse 1:00 p.m. Booth 302
Thurs, Oct. 29 DeckTools Demonstrations Booth 1305 - New Products Booth 1205
Fri, Oct. 30 DeckTools Demonstrations Booth 1305 - New Products Booth 1205

About Simpson Strong-Tie Company Inc.
For more than 50 years, Simpson Strong-Tie has focused on creating structural products that help people build safer and stronger homes and buildings. Considered a leader in structural systems research and testing, Simpson Strong-Tie® products are recognized for helping structures resist high winds, hurricanes and seismic forces. The company is one of the largest manufacturers of connectors, fasteners, fastening systems, anchors and lateral-force resisting systems in the world. Featured product lines include Wood and Steel Strong-Wall® prefabricated shearwalls, Anchor Tiedown Systems for multi-story buildings and Strong Frame™ moment frames. Specialty products include Quik Drive® auto-feed screw driving systems, corrosion-resistant fasteners and Simpson Strong-Tie Anchor Systems® - anchors and fasteners for concrete and masonry. Simpson Strong-Tie is committed to providing exceptional products and service to its customers, including engineering and field support, product testing and training. For more information, visit the company’s Web site at www.strongtie.com.

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The Associated General Contractors of America unveiled a new plan today designed to revive the hardest hit sector of the economy, the nation’s construction industry.  The plan, “Build Now for the Future: A Blueprint for Economic Growth,” is designed to reverse predictions that construction activity will continue to shrink through 2010, crippling broader economic growth.

“The problems facing the construction industry aren’t just devastating construction workers, they are crippling our broader economy,” said Stephen Sandherr, the association’s chief executive officer.  “Simply put, you can’t fix our economy until you fix the construction industry.”

The mix of new incentives, tax cuts, policy revisions and infrastructure investments outlined in the plan are needed to stem the dramatic decline in construction activity and employment taking place nationwide, Sandherr said.  He added that a new analysis of federal employment data conducted by the association found construction employment declined in 324 of 337 metropolitan areas between August 2008 and 2009.

Sandherr said the hardest hit area of the country was Reno-Sparks, Nevada, which lost 35 percent of its construction workforce.  Following close behind were Duluth, Minnesota & Wisconsin, which saw a 33 percent decline; Tucson, Arizona, which saw a 31 percent decline; Wenatchee, Washington, which saw a 30 percent decline; and Redding, California, which saw a 28 percent decline in its construction workforce.

He added that communities that avoid declines in construction employment had little to celebrate.  Taken together, the 13 areas saw a total increase in construction employment of 2,800 people.  During the same time, the industry lost 1 million jobs, Sandherr added. 

Only one community saw a double-digit increase, Columbus, Indiana, at 14 percent, Sandherr noted.  Anderson, Indiana, was next with a 6 percent increase, followed by Tulsa, Oklahoma; Longview, Washington; and Baton Rouge, Louisiana, all with a 3 percent increase.  

Sandherr said the recovery plan’s primary focus was on stimulating new private-sector construction activity, which accounts for 70 percent of the market.  He said the plan calls for repealing the alternative minimum tax and increasing and extending a series of tax credits and cuts – including the net operating loss carry back and the 2001 and 2003 tax cuts – to boost investments in real estate development.
   
He added that new incentives on global investment in real estate were needed to make it easier for international investors to put Americans back to work.  And he said Congress should restore the President’s “Fast Track” trade promotion authority and remove trade barriers to boost demand for new domestic manufacturing and shipping facilities.

The plan also calls for doubling federal investments in transportation infrastructure, renovating dated and inefficient federal facilities and investing in clean water, flood control and navigation projects.  It also calls for restoring the gas tax’s lost purchasing power, encouraging more public-private partnerships, expanding the Build America bonds program and exempting construction activity from the private activity bond cap.

The association also identified as part of its plan regulatory revisions that would accelerate many construction projects.  These include streamlining environmental reviews, accelerating licensing of new nuclear power plants and establishing a federal multiyear capital budget for public works. 

Sandherr added that the federal government needs to encourage more green construction while avoiding counterproductive measures like government mandated labor agreements and new Buy American requirements.

Noting that some of the plan’s provisions would have an impact on the federal budget, Sandherr said the association had gone to great lengths to pair new costs with new sources of revenue.  For example, the various tax cuts and credits in the plan would be partly offset by increases in income, sales and corporate tax receipts that would come with increased business activity from the plan.

He added that many of the infrastructure investments would be funded by increases in existing user fees, new trust funds, private investments and new bonding authority.  He noted studies have found that every billion dollars worth of nonresidential construction activity supports over 28,500 jobs, boosts gross domestic product by $3.4 billion and raises personal earnings by $1.1 billion. 

“Putting this plan in place may not be easy, but doing so will unleash a wave of new construction activity, employ thousands, stimulate new investments and lay a foundation for long-term economic prosperity,” Sandherr said during the unveiling of the plan at a stalled construction project in Sparks, Nevada.  “That’s something Reno-Sparks and the rest of the country could use a lot more of.”

Click here for additional recovery plan materials. Click here for construction employment data. 

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Architecture Billings Index Points to Continued Struggles for Construction Industry
All regions and sectors suffer due to ongoing credit market issues for construction projects

Another stall in the recovery for the construction industry as the Architecture Billings Index (ABI) dropped to its lowest level since June. 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 August ABI rating was 41.7, down slightly from 43.1 in July. This score indicates a decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 55.2.

“While there have been occasional signs of optimism over the last few months, the overwhelming majority of architects are reporting that banks are extremely reluctant to provide financing for projects, and that new equity requirements and conservative appraisals are making it even more difficult for developers to get loans,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Until the anxiety within the financial community eases, these conditions are likely to continue.”

Key August ABI highlights:

• Regional averages: Northeast (45.2), South (44.1), Midwest (43.0), West (37.5),
• Sector index breakdown: commercial / industrial (45.6), multi-family residential (43.4), mixed practice (41.4), institutional (37.5)
• Project inquiries index: 55.2

About the AIA Architecture Billings Index
The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. The diffusion indexes contained in the full report are derived from a monthly survey 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. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month. The regional and sector data is formulated using a three-month moving average.

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. By using sustainable design practices, materials, and techniques, AIA architects are uniquely poised to provide the leadership and guidance needed to provide solutions to address climate change. AIA architects walk the walk on sustainable design. Visit www.aia.org/walkthewalk.

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CFA Presents Robert D. Sawyer Distinguished Service Award to Barry Herbert

The Concrete Foundations Association (CFA) – an international association dedicated to improving the quality and acceptance of cast-in-place concrete foundations and creating better businesses that construct those foundations – recently presented its highest honor, the Robert D. Sawyer Distinguished Service Award to Barry Herbert at the CFA Annual Summer Convention held July 30-August 1. Barry was introduced by Jim Bartley of Bartley Corporation, and described as a significant example of great leadership; innovation; spirit and faith in our industry and both a person and businessman that he has tried to model his career after.

Herbert has been member of the CFA since 1992. While serving on the board from 1993 to 2002 he attended every meeting and served on multiple committees. He became a member of the ACI-332 Residential Concrete committee in 1995 when the decision was made to create the ACI Residential Standard. This standard is now incorporated into the International Residential Code. He continues to represent the CFA and the concrete foundation industry to the present on that committee. He also developed the present Nominations and Awards Committee for the CFA and served as its chair until 2007.

In 1998 he was elected to a two-year term as CFA president. During his tenure as president, he helped organize the current committee makeup and reorganized the board term schedule changing from a confusing schedule of one, two and three year terms to all three year terms.

The Robert D. Sawyer Award, named on behalf of Bob Sawyer, the first Executive Director of the CFA, is presented occasionally to a member of the concrete foundation industry whose contributions to the industry merit recognition. The award recognizes individuals who give tirelessly of their time and resources to serve the industry.

Herbert has always been at the forefront of technology. In the early 1990’s, he became the first poured wall contractor in the nation to utilize a robotic total station in footing and wall layout. Herbert shared this idea with fellow CFA members and it has now become a standard piece of layout equipment for many CFA members.

“Barry is one of those outstanding examples of the fortitude and commitment to family and industry that is evidenced throughout this association,” said Ed Sauter, Executive Director of the CFA. “Since taking over the reigns of this Association, Barry has provided energy and leadership when it was needed most and his innovative spirit and confidence has long been an example to his peers.”

Herbert and his wife, Linda, founded Herbert Construction Company in 1978 and he remains president of the company run by the two of them, their two sons Mike and Doug and their daughter Amanda Morris and son-in-law Josh Morris. Their company is located in Marietta, Georgia.

“The Robert D. Sawyer Award is the highest honor given to any CFA member and Barry Herbert is very deserving of this award,” said Sauter.

About the CFA
The CFA was established in 1974 for the purpose of improving the quality and acceptance of cast-in-place concrete foundations. CFA provides promotional materials, educational seminars, opportunities for networking, and technical meetings for members in 26 states and Canada. Efforts include the creation of a self-governed CFA Standard now in its third edition and the industry-changing research for cold weather effects on poured foundations. The CFA also represents the interests of its members and the industry on several code and regulatory bodies, such as the American Concrete Institute’s committee responsible for the creation of the "Residential Concrete Standard" adopted as a major reference option for foundation walls by the 2006 IRC. The CFA has several of its members on the ACI committee responsible for this document and will endeavor to ensure that the interests of the foundation contractors are considered. For more information about CFA, please visit www.cfawalls.org.

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Construction Employment Declines In 48 States In August Compared To Last Year As Industry Continues To Suffer
Nevada and Connecticut Experience Largest Declines and 41 States Experience Double-Digit Job Losses; Only North Dakota & Louisiana Add Construction Jobs During the Past Year

Construction employment saw significant declines in all but two states this August compared to last year according to an analysis of new state-by-state employment figures released today by the federal government. The analysis, conducted by the Associated General Contractors of America, however did show that the number of states gaining construction jobs increased slightly in August compared to July 2009.

“Construction employment continues to shrink at an alarming rate,” said Ken Simonson, chief economist for the association. “I don’t expect much improvement in construction employment until stimulus money flows more broadly, the federal-aid highway program is renewed, and home building gains momentum.”

The five biggest percentage losses in construction employment over the year occurred in Arizona (27 percent, or 50,000 jobs), Nevada (25 percent, or 29,500 jobs), and three states with 22 percent losses: Connecticut (14,300 jobs), Kentucky (18,300 jobs) and Tennessee (28,300 jobs). He noted that 41 states saw double-digit percentage decreases in construction employment for the year. Meanwhile, construction employment expanded in just two states compared to August 2008. North Dakota added 800 construction jobs for a 4 percent increase while Louisiana added 4,400 jobs for a 3 percent increase in construction employment.

Simonson noted, however, that when compared to the previous month, the construction employment picture was slightly less bleak this August with 30 states shedding construction jobs, 16 adding construction jobs, and four states and Washington, DC remaining stable, compared to 34 states losing and only 14 states adding construction jobs in July.

The largest percentage gains were a 3 percent rise in Idaho (1,000 jobs); 2 percent each in Delaware (500) and Nebraska (800), and slightly more than 1 percent each in Florida (5,500) and Alaska (200). The largest percentage losses for the month were an 8 percent decline in Mississippi (4,800 jobs), a 5 percent decline in Rhode Island (900), and 3 percent declines each in Ohio (5,700), Tennessee (2,800), and South Carolina (2,600). (The U.S. Bureau of Labor Statistics combines construction with mining and logging in Delaware, Nebraska, Tennessee and four other locations to prevent disclosing information about industries with few employees.)

“Many more federal, state and local agencies need to convert stimulus funds into construction contracts to stem the tide of construction job losses,” said Stephen E. Sandherr, the association’s chief executive officer. “More important, Congress and the administration need to focus on pro-growth policies that will reawaken declining private-sector construction activity.”

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Data Center Construction Costs Are Down, According To A Study By Environmental Systems Design

The current economic crisis has an up-side for owners of mission-critical facilities: on average, it costs less today to construct a new data center than it did in late 2007, according to a study by Environmental Systems Design (ESD).

In today’s economy, owners are likely to find significant savings on labor, data center equipment and building materials, and transportation of building materials and equipment. Most notably, ESD found that the prices of feeder and cable have dropped by more than half; major data center equipment by 12%; labor and materials overall by 19.6%, and shipping and handling by 15% from the fourth quarter of 2007 to July 15, 2009.

“Our analysis shows that for any company anticipating the need to build or expand a data there is currently a window of opportunity to realize considerable savings,” said Raj Gupta, President and CEO, Environmental Systems Design.

ESD compared live project estimates, using as a baseline contractor bids for a 60,000-square-foot greenfield data center comprising 20,000 square feet of raised access floor area at 150 watts per square foot and 10,000 square feet of office space, with the following criteria for uptime and redundancy: Uptime Tier III for most components; 2N infrastructure for concurrently maintainable operation; dual utility; N+1 generator installation; 2N centrifugal chiller system; and a standard CRAC unit installation.

During the study period, ESD observed significant reductions in the costs of copper cabling (55%); feeder, both overall (55%) and for copper (48%); copper-based utility transformers (19%); and steel joists (18%).

In contrast, ESD found that the price of UPS systems, HVAC equipment (i.e., CRAC units and chillers), pre-case tilt-up concrete building systems are stable; and the market for medium-voltage switchgear remains competitive, although prices have slightly dropped (4%).

Similarly, the study showed that that prices of other equipment have remained stable, while delivery schedules have significantly changed for better or worse. For example, the price of batteries fell slightly (3%), but delivery schedules remain long. The price of generators has fallen only moderately (8 to 12%), but delivery schedules are significantly shorter (40%).

The estimates are based on historical data, which are continuously updated based on actual bids on data center infrastructure equipment. ESD records historical trends for large equipment purchases (generators, UPS, switchgear, chillers, etc.), labor costs, and delivery schedules. In addition, the company considers geographical markets for construction materials and labor using figures form RS Means and other industry benchmarks. Since September 2008, in particular, ESD has closely monitored the pricing and delivery of major data center infrastructure components in recognition of the need for possible reductions due to the economy.

Founded in 1967, Environmental Systems Design (www.esdesign.com) has provided design solutions on hundreds of buildings in the United States and on major projects throughout the world. The firm offers consulting engineering services in mechanical, electrical, plumbing, fire protection, LEED®, sustainable design, commissioning, and technology. ESD supports a diverse range of markets, including commercial, health and science, education, mission critical, residential, assembly, cultural, theaters, energy plants and transportation. Its clients include architects, developers, property managers and Fortune 1000 companies with whom it works to restore the buildings of the past and create new buildings of tomorrow.

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Horton Pioneers the First Commercially Available Self-Closing Smoke-Rated ICU

Horton Automatics continues to make life easier for architects, nurses, and healthcare facility professionals. As with the invention of the first automatic sliding door in 1960, Horton presents the first ever Self-Closing Smoke-Rated ICU.

This new system has all the standard features of the regular self-closing ICU door system including a fully concealed self-closing mechanism that requires no power. A hydraulic damper to ensure the door closes smoothly along with a mechanical hold device to keep the door open also comes standard with the unit.

The self-closing smoke-rated ICU is available in a single slide configuration with full break-out capability. Track or trackless systems can be specified for openings ranging from 7 to 9 feet.

New options with this system include an electro-magnet hold-open device that ties to the fire alarm system in a healthcare facility and will automatically close the door when an alarm is activated. Another exclusive feature of this product is the magnet-to-latch option in place of the positive latch. When the door closes, the magnet-to-latch keeps the door securely closed and meets the full requirements of NFPA 101.

Finally, the system comes in narrow, medium, and wide stiles and includes the options of 4", 6- 1/2", and 10" bottom rails; jambs with pocket or tube jambs.

Horton Automatics is leading manufacturer of automatic entrance systems, including sliding, swing and revolving doors as well as platform screen doors, industrial doors and service windows. Horton is headquartered in Corpus Christi, Texas and operates facilities in Mexico and the UK. Horton Automatics is a division of Overhead Door, A Sanwa Shutter Company.

Visit our website at www.hortondoors.com

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Nonresidential Construction Slides In July As Stimulus Dollars ‘Trickle’ Out To Contractors, Top Industry Economist Notes
Private Nonresidential Spending Falls for Fifth Straight Month While Homebuilding Surges

Downturns in multi-family construction and both private and public nonresidential construction swamped a strong upswing in single-family homebuilding in July according to an analysis of federal construction spending data provided today by a leading construction economist. That analysis of U.S. Census Bureau data released today shows that total construction spending fell 0.2 percent, seasonally adjusted, from a downwardly revised June total.

“We know from contractors’ reports that stimulus money is beginning to flow, but what should be a torrent by now is only a trickle in most categories,” said Ken Simonson, chief economist for the Associated General Contractors of America.

He noted, for example, that public nonresidential spending slipped 0.8 percent from June to July as cutbacks in state and local government budgets offset federal stimulus dollars. The only significant exception was in water supply projects, where spending increased 3.7 percent, following a 6.8 percent jump in June.

Private nonresidential spending fell for the fifth month in a row, slumping 1.2 percent in July, after tumbling 2.2 percent the month before, Simonson added. Losses were most acute for developer-financed categories with lodging down 8.4 percent for the month and 35 percent compared to July 2008; office down 1.7 percent and 26 percent; and commercial (retail, wholesale and farm), down 1.7 percent and 35 percent, respectively. The only private categories that exceeded the July 2008 level were manufacturing construction, which rose 0.9 percent for the month and 47 percent over 12 months; and power construction, down 0.8 percent in July but up 10 percent from a year earlier.

“Given that private construction will continue shrinking for several more months, public agencies charged with spending stimulus funds on construction must do so as promptly as possible,” Simonson said.

One bright spot in the Census report was new single-family construction spending, which surged 7.0 percent in July, following a 3.1 percent gain in June. Nevertheless, this category remained 45 below the year-ago level. Meanwhile, new multi-family construction plunged 3.3 percent for the month and 37 percent year-over-year.

“Contractors depending on bank-financed developments for work should expect further pain this year,” Simonson concluded. “As a recent Federal Reserve survey showed, banks are keeping a tight lid on real-estate lending.”

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Construction Employment Shrinks In 319 Of The Nation’s 336 Largest Metro Areas In July, Continuing Months-Long Slide
Reno-Sparks, NV & Wenatchee, WA Have Worst Job Losses, Columbus, IN and Weirton-Steubenville, WV-OH Again Have Largest Increases in Construction Employment

Construction workers in communities across the country continued to suffer extreme job losses this July according to a new analysis of metropolitan area employment data from the Bureau of Labor Statistics released today by the Associated General Contractors of America. That analysis found construction employment declined in 319 of the nation’s largest communities while only 11 areas saw increases and six saw no change in construction employment between July 2008 and July 2009.

“These figures make it clear that construction workers in nearly every community nationwide are out of work and short on prospects," said Ken Simonson, the association's chief economist. "It’s going to take a lot of new construction activity to turn things around for idle construction workers in cities and towns nationwide."

Simonson noted that each of the six hardest hit metropolitan areas in July lost at least 30 percent of their construction jobs. The worst hit, Reno-Sparks, NV, had a 33 percent decrease in construction employment. The Wenatchee, WA area (32 percent), Duluth, MN-WI (32 percent), Tucson, AZ (32 percent), Leominster-Fitchburg, MA area (30 percent) and Redding, CA (30 percent) were all close behind.

In comparison, only two communities saw double-digit job gains, Simonson said. Columbus, IN again led the nation in construction job growth with a 14 percent increase. Weirton-Steubenville, WV-OH saw a 13 percent boost to its employment figures. The other four communities in the top six were Anderson, IN and Baton Rouge, LA with a 6 percent increase, Longview, WA with a 3 percent increase and Evansville, IN-KY with a 2 percent increase.

"It is difficult to understand why more communities aren’t moving to put their stimulus funds to work while they are experiencing these kinds of job losses," said Stephen E. Sandherr, the association’s chief executive officer. “Coping with the red tape required by the stimulus ought to be worth it to help put neighbors and friends back to work."

Sandherr said that new employment figures underscore the need for cities and towns to move more quickly to allocate their portion of the estimated $135 billion in stimulus-funded construction programs. He noted that while contractors report state agencies are moving quickly to distribute stimulus-transportation dollars, many municipalities are moving slowly to distribute their stimulus construction funds.

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Architecture Billings Index Bounces Back After Substantial Dip
Improvement in business conditions tempered by a leveling off in project inquiries

Exhibiting a welcome rebound following a 5-point dip the month prior, the Architecture Billings Index (ABI) was up almost 6 points in July. 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 July ABI rating was 43.1, up noticeably from 37.7 the previous month. This score, however, still indicates a decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score fell to 50.3 from 53.8, but it was the fifth straight month with a score in above 50.

“It is always encouraging to see an uptick in our index, but there has been too much contraction in recent months to get overly optimistic about business conditions returning to levels they were at two months ago,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “In addition to a very competitive marketplace, architects continue to report that lenders have still not yet fully opened credit lines and that the stimulus funding has so far provided limited project activity for the design community overall.”

Key July ABI highlights:

• Regional averages: South (43.4), West (39.7), Northeast (37.8), Midwest (36.9)
• Sector index breakdown: mixed practice (42.9), commercial / industrial (42.9), multi-family residential (40.7), institutional (37.1)
• Project inquiries index: 50.3

About the AIA Architecture Billings Index
The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. The diffusion indexes contained in the full report are derived from a monthly survey 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. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month. The regional and sector data is formulated using a three-month moving average.

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. By using sustainable design practices, materials, and techniques, AIA architects are uniquely poised to provide the leadership and guidance needed to provide solutions to address climate change. AIA architects walk the walk on sustainable design. Visit www.aia.org/walkthewalk.

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