California Transportation Director Cindy McKim says that if the current budget impasse continues through the end of August, “transportation-fund cash balances may be depleted, resulting in potential suspension of ongoing construction projects.” McKim says that if the logjam extends into September, the department would have to stop or delay the start of $3 billion worth of transportation projects, plus delay contractor payments on $9.5 billion worth of current construction. “The absence of fiscal year 2010-11 budget authority has an immediate result of restricting Caltrans’ ability to initiate construction projects, award contracts and make payments to vendors,” says McKim. The fiscal
U.S. Bureau Of Labor Statistics. Construction Unemployment Rate For February. Construction’s unemployment rate is starting to ease back from record-high levels. In July, the industry’s unemployment rate slipped to 17.3%, down from 20.1% the previous month and down from 18.2% in July 2009, according to the Bureau of Labor Statistics. However, construction employment remains at a 14-year low, says BLS. Part of the improvement was the nearly 10,000 construction workers who returned to work after being on strike earlier in the year, says BLS. Given the drop in employment, the recent decrease in the jobless rate reflects workers who have
Despite a sharp increase in house sales in June, the monthly pace of sales was still the second lowest on record, according to the U.S. Dept. of Commerce. June sales rose to an annual rate of 330,000, up from a record low of 267,000 in May. The rebound in the housing market hit a wall when tax credits for buyers ended in April.
New construction starts in June dropped 3% from the previous month to a seasonally adjusted annual rate of $385.7 billion, according to McGraw-Hill Construction’s latest release for construction starts. Overall, the market is down 4% from the first half of last year, despite a 23% increase in the residential market. While that market is rebounding from historic low levels, the nonresidential building market has plummeted 15%, including declines of 29% for commercial buildings and 54% for manufacturing work. The nonbuilding market has dropped 10% from a year ago.
Two authors presenting research about megafirms couldn’t have asked for a better example. Megafirm AECOM had just announced the acquisition of construction manager Tishman Construction. The authors identified key trends in the creation of megafirms. One of those trends—"stuck in the middle and short on cash"—describes some big, successful firms. Their research paper, “Supersized Competition: What You Need To Know About the Creation of A/E/C Megafirms,” was discussed on July 15 at the Society for Marketing Professional Services conference in Boston and funded by the SMPS Foundation. It can be found at http://www.smps.org/foundresearch. Authors Alexandra Brown, a marketing consultant, and
Concrete equipment manufacturer Schwing America, St. Paul, Minn., has come out of Chapter 11 bankruptcy protection with a federally approved reorganization plan, new lenders and the full support of its creditors. Photo: Courtesy Schwing America With a new line of credit in place, concrete equipment firm Schwing America sees a return to solid footing in 2011. The company cited assets of $130.6 million and debts of $90.9 million when it filed for protection last September in U.S. Bankruptcy Court in St. Paul. This July, the court approved Schwing’s reorganization plan under which 10 European banks that have relationships with Schwing
A major revision of federal financial regulations has cleared its final congressional hurdle, with the Senate's approval on July 15 of the wide-ranging measure. The bill, named for its main authors, Sen. Christopher Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.), now goes to the White House. Related Links: Financial Bill May Tighten Construction Credit President Obama is expected to sign the legislation during the week of July 19, Senate Majority Leader Harry Reid (D-Nev.) said. Senate passage came on a 60-39 vote as Republicans Scott Brown (Mass.) and Susan Collins and Olympia Snowe, both from Maine, joined 57 Democrats to
Global design giant AECOM Technology Corp., Los Angeles, and leading New York City-based building construction manager Tishman Construction Corp. are linking up to share needed capabilities in a changing construction market. AECOM announced July 14 that it has paid $245 million to acquire Tishman. The deal, which had been rumored for the last several weeks, adds a construction powerhouse to the growing AECOM family of firms operating around the world, while offering Tishman a springboard to expand its operations beyond struggling commercial building markets in the U.S. “The addition of Tishman to the AECOM enterprise reflects our commitment to execute
More rough waters lie ahead for the worldwide construction industry, according to IHS Global Insight Construction Service, Lexington Mass., which predicts further decreases in construction spending. According to first-quarter data from 69 markets, IHS predicted construction spending would remain flat in 2010. However, Laura Hanlon, the research firm’s product manager, admits that, in light of recent economic turmoil, the first-quarter outlook was a little overly optimistic. “As of quarter one, we were still optimistic for a flat 2010,” said Hanlon. “However, we just released a new forecast [on June 30], and with the information we have received through quarter two,
In May, the dollar value of total construction starts rose 3%, according to McGraw-Hill Construction’s latest report on construction activity. Soruce: McGraw-Hill Construction Analytics. ConstructionContract Value Cumulative Year-to-Date Through May 2010 Three percent may not be a remarkable number, but it is notable that most of the gain came in the previously moribund non-residential building market. The sector rose 19% from the previous month but is now down 16% from the five-month cumulative total of last year. Those percentages are an improvement over the 18% year-to-year decline recorded during the previous month. “The good news with May statistics is that
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