Construction Materials Up in Q4 2011, But Moderating in 2012

CHICAGO–(BUSINESS WIRE)–Fitch Ratings has published its fourth quarter 2011 Building Materials Volume and Pricing Trends Report.

As expected, revenue growth for the fourth quarter of 2011 was driven primarily by higher prices, particularly for coatings, aggregates and roofing products.

Fitch expects pricing growth for most building materials to moderate this year. Pricing actions during 2012 are unlikely to be as robust as those implemented last year, as inflation in raw material costs appears to be moderating. Additional pricing increases may be difficult to achieve, particularly if demand remains lackluster and raw material costs do not meaningfully rise further.

The full report, ‘Building Materials Volume and Pricing Trends: Fourth-Quarter 2011′ is available at ‘www.fitchratings.com.’

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.

Utilitarian Municipal Structures Can Be Functional, Sturdy, Earth-Friendly AND Pretty

Sonoma County transit shelter manufactured by Tolar Manufacturing and designed with the help of Autodesk Product Design Suite (Photo: Business Wire)

Sonoma County transit shelter manufactured by Tolar Manufacturing and designed with the help of Autodesk Product Design Suite (Photo: Business Wire)

Contractors who are building out and improving the country’s metropolitan landscapes don’t have to settle for off-the-shelf transit shelters, street furniture and advertising kiosks. That’s because companies that design and manufacture those fixtures are increasingly turning out custom products that fit the local environment and climate.

One example is Tolar Manufacturing which uses Autodesk Gold Partner KETIV Technologies to design and make more than 500 shelter types within the company’s four main product lines, each designed and engineered to be long-lasting, attractive and environmentally friendly. This includes complying with a wide range of building code requirements across North America and community design requirements from economical transit shelters to high volume bus rapid transit facilities. Tolar client expectations for purpose- driven design range from hurricane-resistant bus shelters for Florida communities to solar-powered transit displays for agencies in California.

On a typical project, Tolar begins by creating 3D models of the proposed shelter using Inventor software. To further communicate design intent to customers, Tolar can create a near-photorealistic image of the model in Showcase software, and then superimpose it over an actual streetscape from the customer’s town, enabling customers to see exactly what Tolar’s product will look like when installed in the community.

Next, the Inventor manufacturing models are used to fabricate the multiple components that make up the shelter. These models provide clear, concise and comprehensive communications, resulting in fewer errors on the shop floor.

Additionally, Tolar uses Vault software to centrally store and manage its digital data, making it easier for the company to access and reuse drawings of specific parts for multiple projects rather than having to start each time from scratch — significantly reducing project turnaround time. Tolar also uses Inventor Publisher software to create installation instructions for customers.

Autodesk named Tolar its Inventor of the Month for January 2012 for how it used Autodesk software to create custom products matching the needs of municipalities throughout North America.

Construction Activity Boosts the Monthly Equipment Leasing Numbers

2011 Solar Decathlon New Zealand Team

In December the construction and trucking industries were the leading boosters of the under-performing sectors in the Monthly Leasing and Finance Index, as reported by The Equipment Leasing and Finance Association. The index reports economic activity for the $628 billion equipment finance sector.

New business volume for December was $10.8 billion, up 20 percent from volume of $9.0 billion in the same period in 2010. Volume was up 74 percent from the previous month. Cumulative new business volume for 2011 rose 25 percent over 2010.

Credit quality metrics remained relatively steady. Receivables over 30 days rose slightly to 2.1 percent in December from 2.0 percent in November. Charge-offs were unchanged at 0.7 percent for the third consecutive month.

Credit standards eased as the number of lease applications approved increased dramatically to 79.3 percent from 76.2 percent the previous month. 70.8 percent of participating organizations reported submitting more transactions for approval during December, up from 65.5 percent the previous month.

Finally, total headcount for equipment finance companies in December was unchanged month to month and down 1.0 percent year over year. Supplemental data show that the construction and trucking industries again led the underperforming sectors.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for January is 59.0, an increase from the December index of 57.2, indicating improved optimism about business activity amid continuing concerns about the global economic situation.

Products To Chill You At The Job Site

It’s that time of the year again – time to run down the latest in ways to keep cool on the job site. Of course if you have a job trailer with air conditioning then just stay in there!

But for the rest of you there are a number of helpful options out there in the marketplace that say they will help you keep your cool. None of them will work for those of you who are hot headed. You need some anger management classes first.

There is a lot of talk about evaporative cooling neckbands, headbands, wristbands and even vests. These items all have some crystals in them and after being soaked in water they begin to keep you cool as the water they hold evaporates over time. You can reuse them thousands of times.

hard hat sweatband insertThen there are the standard sweatbands that mop up the sweat and help keep you cool by preventing the sweat from getting into your eyes. Some models of these will attach to your hard hat’s webbing. These also come with the crystals and provide up to 10 hours of cooling from one soaking.

If you want to get into a higher tech solution for keeping your head cool you can go with one of the hard hat cooling systems. These usuallyhard hat cooling system use a fan mounted to the rear of the hat that blows air up and over the top of your head. They are sold by companies that claim the upper part of hard hats can get to 160 degrees F. They often run on rechargeable batteries and come with a wall adapter for recharging. They will attach to most short, and long brimmed hard hats.

Another way to stay cooler is to block more of the sun from hitting your hard hat visor and brim extenderbody. That’s the idea behind the extenders and visors sold for hard hats. Essentially they make your hard hat into a shade tree. Well, not quite, but the cooling effect is reported to be good. The visors will help to reduce the UV rays that get into your eyes. I guess there might also be some added protection from falling objects.

What are your secrets for staying cool? Write a comment and let us know. It’s going to be a long, hot summer.

BIM Paves The Way For Generative Fabrication In Construction Projects

A very key advantage to Building Information Modeling (BIM) is that it helps to deliver the promise of prefabrication. Complex construction projects ( I’m talking about things way more complex than a typical single-family residence) designed and built from 2D drawings suffer from information anemia. It becomes extremely difficult to know for sure if everything is going to fit into a given space, especially since multiple trades often design their installations within the vacuums of their own minds.

By using a BIM approach everybody shares their plans, and so collisions and space requirements are worked out before construction begins. That gives rise to a whole new level of potential efficiency where complete units, with all of their attendant plumbing, electrical and HVAC, can just be dropped into place and connected. And that can be done with a high degree of certainty that everything will fit, and connect to what it is supposed to connect with.

As the advantages of prefab components are realized more and more during the construction process, architects and engineers will start to see more design opportunities in prefab as well. This is where generative fabrication (GF) begins to extend the advantages of BIM. Not only does it allow the quick creation of multiple, identical components, but it also allows the creation of structural members that permit design to come to the forefront. (Photo Courtesy designtoproduction)
Saws, mills and drills are creating building components that previously were too expensive to make in quantity.

People are making things using GF by connecting parametric CAD systems to computer controlled fabrication tools. In the case of timber the tools are mills, drills and cutters. This is the advent of what is called “mass customization” for the building industry.

Not only are complete building assemblies being created this way, but the door is also open for highly customized building components. Take lighting for instance. MyLight can be different for every person because it is not created from a mold. Instead it is fabricated through three dimensional “printing.” As the creators say:

We can now “print” an object directly from digital information. People have no idea yet what an incredible change in technology that is, and what that means for design. All design will become meta-design: objects can now be a range-of-objects, like in a family or a species.

The computer controlled machines that make these items come in a variety of forms. Stereolithography machines make things from plastic by building them in layers. The plastic is polymerized layer by layer using laser light. Selective Laser Melting is used for fabricating items from metal. Again, the metal is applied in powder form, in layers, and is made molten by laser beam energy.

For those of you who want to get a glimpse of the future, from August 3-7, in New Orleans Siggraph 2009 will showcase some of these generative fabrication concepts along with some of the things that have been built using them.

The Computer Technology Challenge For Construction

There has historically been a certain amount of resistance to computer technology within the construction sector. While astute construction managers who have the best interests of their construction businesses at heart tend to be bullish about adopting computer technology, the rank-and-file are not so enthusiastic.

Perhaps the biggest reason is because many people who work in construction, (those who came up through the ranks to manage the day-to-day operations and those who actually drive the nails), are most inspired by concrete, real world things. Computers on the other hand appear to them as mysterious and irrelevant. They would much rather pick up a brand new battery/gas-driven nail gun than a laptop. What the nail gun does, and how it benefits them, is easily and quickly understood. But what a computer does, and what benefits it offers to the process of building things, are much more obscure.

Another roadblock to the adoption of computer technology in the construction sector has to do with the nature of construction. The processes of building things most often occur outdoors, in all kinds of weather, and in a mobile fashion. Equipment, materials and workers are on the move, all day long. The environments are dusty, noisy, and they have a wide range of temperatures and humidity. Those are not exactly the best environments for sensitive electronics. So computer technology in construction has largely been relegated to offices, doing the kinds of tasks that any other type of business has them doing. Because of that, construction hasn’t been able to enjoy the kinds of productivity increases that computer technology offers to all those activities that take place in the field.

The third road block to the adoption of computer technology in construction is one that exists in any business. It is the tendency for people to resist change, especially if it means they will loose control of some aspect of their jobs, or if it exposes them to things they’re unfamiliar with.

The worker who consistently starts work ten minutes late, and takes longer lunch breaks will not like having to punch in and out on his cell phone. That technology is available today and construction companies are implementing it.

The manager that makes an extra $200 a month selling “extras” from materials orders will not be happy about computer technology that uses scanners to record and track material movement against invoices. This computer technology is also available today.

The lead carpenter who travels job to job on a daily basis may be apprehensive about making a mistake while she is keying in job codes to the central accounting system from her pickup truck 50 miles away from the office. People often feel intimated by technology.

Recent data from the Census Bureau showed construction as one industry that hasn’t kept up with others when it comes to productivity increases over the past 25 years. All of that is about to change. The economic climate is no longer one that will tolerate waste and inefficiency. Computer technology, that includes hardware, software, and the peripherals that interact with computer technology like cell phones, scanners, PDAs, and other wireless input devices, is finding increasing acceptance in the construction field. The challenge now is for managers and IT professionals to select the computer technology that works for their businesses, and not fall prey to buying technology for technology’s sake.

When is Demo Too Extreme?

Every now and then I catch an episode of one of those “reality” home improvement shows. Whether it’s someone trying to sell their place by adding some curb appeal, or someone trying to fix up their place to make it more livable, as reality concepts go they are very interesting.

There is, however, a common thread that runs through all of the programs that feature some sort of demolition. They illustrate, in no subtle manner, that most people, television producers included, still haven’t gotten it when it comes to making wise use of resources. It’s amazing that in this day and age with all the evidence around us of the growing shortages of resources available to a planet with more than six billion people that the order of the day is still – buy new stuff and then demolish and throw away the old.

The show called Extreme Makeover does a lot of nice things for people by fixing up their places and in many cases they actually build new ones for them. There’s no doubt that these are deserving people by any standard, and those who donate their time, talent and treasure to pull off these projects seem to be proud of what they do.

But here’s the rub. When the demo portion of an episode that I recently watched came up there were cowboys on horseback shooting out the windows and then hooking ropes to a wall to pull it down. Finally, the biggest articulating backhoe I’ve ever seen went into action to demolish the structure in about a minute.

There it was, the old home, a pile of rubble. Within all that rubble were many twisted, broken windows, that could have been used for something else. Doors were crushed that might have been easily turned into desks, or shelving, or hey, even used as doors. Hardware of all kinds no doubt got dropped into a landfill and next year someone will be paying top dollar for the same thing from a company that supplies period embellishments. Sinks, tubs, countertops, trim, gutters, exterior and patio doors, and I’m sure many other items simply contributed to the over-filling problem at one of the nation’s dumps.

The people got a beautiful, brand new home that was palatial by most standards. If the home would have been shrunk by 20 percent the cost of recovering and finding new value in all the useable components could have been realized. Plus, the family would have had less space to heat and cool and that would have saved them some money in the long run.

It takes time, effort and money to thoughtfully take a place apart and find useful new uses for the components, so it just isn’t done. It’s going to take a change in consciousness to solve our looming resources problems, but unfortunately I’m not so sure humans are up to the task.

Prevailing Wage Battles Re-Loaded

The current economic crisis, which is nothing more than a cyclical devaluation necessary to keep the currency from bottoming out, is causing states and municipalities to make decisions about prevailing wage legislation.

In Cedar Rapids, IA, a bill that sets a prevailing local wage, benefits and overtime, is waiting for one more vote in order to become law. In Colorado, a bill that would have established a prevailing wage for employees of contractors was defeated in committee. Some voices in Washington state are calling for the repeal of its prevailing wage law.

Prevailing wage largely affects public works projects and is often credited with driving up the costs of those projects. Although it isn’t really clear that’s the case, even when that idea is advanced by an opponent of prevailing wage. Here is how Mark Latimer, president of the Rocky Mountain Chapter of Associated Builders and Contractors explained it:

In some cases, the prevailing wage is lower than the going rate at the fair-market system. These are decent-paying jobs. We believe the prevailing wage artificially inflates [wages] and drives up the cost of construction. It will hurt the economic stimulus and restrict the free market.

So, if prevailing wages in some cases are “lower than the going fair-market system,” and they are “decent-paying jobs,” how are they going to “drive up the cost of construction?” More to the point it just may be that when prevailing wages are in effect contractors can’t make as much on reselling that labor without pricing themselves out of the market.

Since a person’s labor (expressed as time) is largely the only thing most people have available to sell for their livelihood, perhaps contractors should try to find more value somewhere else in the resources under their control. After all, what is often overlooked in the discussion of prevailing wages is that people are going to spend those wages in the community. So if they have a little extra that’s a good thing, isn’t it?

The other point often advanced by prevailing wage opponents is that the free market does a great job of setting wages. But you have to ask, great for whom? It’s probably true that the free market sets a great wage for a person who is buying the labor, but if you ask a lot of the people supplying the labor they might disagree.

Those on the government side, who propose prevailing wages, sometimes see them as a tool to control those who are eligible to bid on projects. As one legislator in IA put it:

Without it, the state would see fly-by-night, out-of-state contractors coming into Iowa underbidding our standard of living.

So, could it be that prevailing wage offers government a chance to minimize due diligence while it qualifies contracts and enforces building codes and contract delivery? Especially in these times of diminishing budgets having a “safe” pool of bidders could save time and money.

It seems that when you get to the bottom of the prevailing wage issue you find it is simply a manipulation of an already over-manipulated economic system, with proponents and opponents squared off over who will benefit and who will lose. This is no different than most other issues that have economic gravity. Perhaps it would be better to establish a scorecard system where one economic interest is served one time, and another is served the next. That way, at least things might stay a bit more balanced.

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