CMD First Source

Good News For Construction Companies

According to one analyst, higher natural gas and oil prices could boost the outlook for as many as six engineering and construction companies. The main assumptions are that oil prices will not drop below $60.00 a barrel into next year. It also includes an outlook that can sustain beyond the year 2010. This analyst also said that industrial demand in the USA remained somewhat weak and should not materially weaken any further. It is also been suggested that Federal stimulus spending could prompt additional construction spending by various Federal agencies. If true, this could offset the decline in state transportation spending. These new price targets make the assumption that regulators will continue to push renewable energy as one of the main power sources available to both businesses and residences.

NYC Construction Group: 20,000 Jobs Lost in 8 Months

A New York City construction group says the recession has cost the industry nearly 20,000 jobs since last summer. The New York Building Congress says the city’s construction jobs fell to 117,000 in March. That’s down 19,900 since last August.
The industry lost jobs every month, from August to March, as financing for real estate projects dried up and some were shuttered. Workers’ wages continued to rise despite the job losses, up from an average $65,000 in 2007 to about $68,000 in 2008. Developers and trade unions have been working for months on a labor agreement that would cut wages and other costs by up to 15 percent to try and restart stalled projects.

Highway Projects Ahead of Schedule

President Obama announced yesterday that highway projects spurred by the administration’s $787 billion economic stimulus plan are coming in “ahead of schedule and under budget,” but the program’s early success may owe more to the depth of the economic crisis than to any new found efficiency in Washington. State governments, facing black-hole deficits, went into overdrive to grab a share of the $28 billion for highways and bridges that was provided in the stimulus bill. Even before the huge spending measure cleared Congress, state highway officials were zeroing in on projects that could win quick infusions of federal cash. Across the country, meanwhile, construction companies had seen business plunge so far so fast that they rushed to submit unusually low bids for the federally funded projects — hoping to have at least some work in the summer construction season, and hoping to stay afloat.

New Home Construction Shows Unexpected Gain

The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units. The increase in the number of new housing projects that builders broke ground on in February overcame economists’ forecasts for yet another drop in activity. February’s pickup was led by a big increase in apartment construction. Some economists said the new housing figures offered a glimmer of hope. Overall housing construction activity fell to a pace of 477,000 units in January, according to revised figures. That was a little higher than first reported but still marked a record low.Applications for building permits, considered a reliable sign of future activity, also rose in February by 3 percent to an annual rate of 547,000. Economists were expecting permits to fall to a pace of 500,000 units.

Even with February’s rare burst of activity, housing construction is down a whopping 47.3 percent from a year ago.The collapse of the once high-flying housing market has been devastating to the United States’ economic health. Its spreading fallout has contributed to big pullbacks by consumers and businesses alike, plunging the economy into a recession now in its second year. The Obama administration has announced a $75 billion program to stem skyrocketing home foreclosures, which have dumped even more properties on an already crippled market. Tighter lending standards for home mortgages, rising defaults and fear about the housing market’s future have sidelined buyers, an absence felt acutely by homebuilders.

Green Building is Soaring in Tough Economic Times

Despite the worldwide economic crunch, a number of companies with green building products and services are doing well. Serious Materials, a green drywall company had a record year last year and is in the midst of a record quarter at the moment, according to the company CEO. Matt Golden of Sustainable Spaces, which does energy assessments for homes, says his company is wrapping up a record month. Dan Geiger, who heads up the U.S. Green Building Council in Northern California, says interest in the group continues to build. Classes are exceeding expectations.And David Elien, CEO of GE Lumination, says that the LED market is down, but because notebook makers are buying fewer LEDs.

So what gives. “Some of the bigger customers are taking their dollars out of new projects and putting them into their existing footprint and optimizing it for energy efficiency,” said Elien. “When they come out of the downturn, they want to lower their operating expenditures.”Surace had another explanation. Housing starts are 83 percent down. But new home builders have never been interested in products like Serious’ EcoWall. “Big tract home builders don’t care. They don’t pay your electrical bills,” Surace said. (Surace, by the way, sits on numerous green building advisory committees and boards. Serious also sells windows.) The product is mostly being bought by commercial builders and custom home builders. A lot of these segments are only down moderately. Large builders like Webcor now get the lion’s share of revenue from green projects. The stimulus bill will also pump billions into retrofits and energy efficiency programs.

Construction Companies Look For Bailout Money

Construction starts are declining badly, and unemployment within the construction industry has been gaining a lot of momentum. Layoffs in 2009 are projected to result in a 30-percent decline in workers. There is very little relief in sight from the private sector, causing some contractors and industry experts to focus on the hope of federal stimulus dollars that could create massive infrastructure projects and stave off even greater losses. Dividing up taxpayer money among ailing industries has been a hot issue for many months. Most people are in agreement that bailouts need to occur. Who gets their hands on the money, though, is the big question. Construction industry experts are attempting to silence potential critics by outlining a public-works plan that would serve as a blueprint. It would reinforce the country’s ailing infrastructure, which the American Society of Civil Engineers recently issued a “D” grade. It would offer relief to current workers who would otherwise be unemployed. It would potentially create wealth now as well as in the long-term.

Building Products Industry Targeted by Golden Gate Capital

Kevin O’Meara most recently served as president and COO of Builders FirstSource, Inc., a manufacturer and distributor of structural building materials. O’Meara co-founded Builders FirstSource in 1998 as its CFO. Prior to this, O’Meara was the vice president, Strategic Planning and Business Development at building materials manufacturer Fibreboard. His background also includes positions at management consulting firm Bain & Company, as well as two private investment firms.

Rajeev Amara, a managing director of Golden Gate Capital, said, ‘We are excited about our partnership with Kevin. In the wake of the unprecedented decline in housing, we believe his blend of operating and strategic experience will make us uniquely qualified to capitalise on significant opportunities in the sector. The flexible, long-term nature of our fund will give us the unique ability to invest up and down the capital structure, including debt and equity securities. We are confident that our partnership with Kevin will enable Golden Gate Capital to become a leading investor in the building products industry.’

O’Meara added, ‘Golden Gate has the capital and strategic vision necessary to take full advantage of the tremendous investment opportunities emerging from the current housing downturn. I am excited about this partnership and look forward to bringing my building products industry experience to Golden Gate’s team.’

Golden Gate has approximately $9bn of capital under management.

Source: AltAssets.

Building Bluegreen?

If there’s a message for the moment in the building industry, it’s at the base of Enterprise Way. “Green building design: A sign of things to come” a white billboard boasts over a graphic of a field of grassy green that should have been development gold.

Cleaner, greener, leaner construction has been selling condominium complexes across B.C. on this sort of message for the better part of a decade as the province converts to smaller, more energy-efficient homes. Then just last month, the bubble burst, leaving hope of completing larger, multi-family developments in the lurch.

Now all most Okanagan developers can do is finish what they have started and let the grass on their empty lots grow as they wait for better days ahead. On one hand, the timing couldn’t be worse. With the provincial government demanding high-end energy and environmental standards for their buildings, and private industry turning to the green movement for marketing prowess, it seemed the stage was set for a green building revolution—until the stock market crashed.

But a group of local consultants say they still believe greener pastures lie ahead for those willing to try truly eco-friendly design. They’re hoping the industry’s misfortune can be the average customer’s gain, as the slower pace of construction gives those who design our homes and offices a chance to rethink how green, energy-efficient claims are addressed.

Replacement For Lead

There may finally be a solution to all of the lead in many useful products. Researchers at the University of Maryland’s A. James Clark School of Engineering have reportedly discovered a new lead-free material, bismuth samarium ferrite ( BSFO ). This material is for use in many products ranging from biomedical imaging devices to airbag sensors to inkjet printers. If implemented commercially, it could replace a common lead-based material found in these and other electronic devices, keeping lead out of landfills and the ecosystem. Now that is good news for our environment.

Fiber Composites teams with Huttig Building Products

Decking manufacturer Fiber Composites is expanding the distribution of its products in the West and Southwest through a partnership with Huttig Building Products.

The arrangement will boost the presence of Fiber Composites’ Fiberon decking and railing materials in Texas, New Mexico, California, Washington and Oregon, the company says.

“Our partnership with Huttig will increase the reach of Fiberon products in critical markets,” says Doug Mancosh, president of Fiber Composites. “We are excited to become aligned with one of the nation’s premier building-products distributors. We truly believe this partnership will ensure the growth of Fiberon’s extensive line of composite and PVC decking and railing products.”

Financial terms of the partnership weren’t disclosed.

Fiber Composites is based in New London, a Stanly County town near Albemarle. The company, founded in 1997, touts itself as the second-largest manufacturer of composite decking and railing in North America.

St. Louis-based Huttig Building Products Inc. (NYSE: HBP) distributes buildings materials used in new residential construction and in home improvement, remodeling and repair work.