North Carolina Construction News

2010 Construction Economic Forecast

noreply@blogger.com (Bob Kruhm) — Fri, 13 Nov 2009 12:27:00 +0000

The nonresidential construction industry can expect a mixed bag in terms of construction activity in 2010, according the Associated Builders and Contractors' (ABC) November construction economic outlook. Federally funded projects, such as water/sewer and road resurfacing projects, are likely to see a stable 2010, although others less aligned with federal spending will have a tougher year.

“While the industry battled the effects of the recession in 2009, expect 2010 to be a transitional but sluggish year on the road to recovery,” said ABC Chief Economist Anirban Basu.

On the jobs front, in 2010 the nonresidential construction industry is expected to see job loss decelerate and slowly turn around. ABC expects employment to be down only in the mid- to high single digits on a year-over-year percent change basis compared to a recent 12-month period that saw nonresidential construction employment down 13.2 percent, and heavy and civil engineering down 12.6 percent.

In addition, the stimulus-related activity that began manifesting itself in ABC’s Construction Backlog Indicator in May 2009 will continue to steadily translate into actual construction spending into the next year and further.

“The financial crisis that began in 2007 and deteriorated significantly in September 2008 also led to the introduction of a variety of policies designed to jump-start the economy, including the American Recovery and Reinvestment Act of 2009 (ARRA),” said Basu.

“One of the bigger beneficiaries of ARRA will be the public sector,” Basu noted. “Public buildings – particularly courthouses and federal facilities in need of modernization – will receive a sizable increase next year due to stimulus funds reaching the market.”

ABC expects institutional construction, including hospital construction, to be soft due to depleted state and local budgets and significant pressure to contain health care costs. However, state governments will continue to receive substantial support from the federal government over the next year, which will help stabilize capital budgets.

The outlook for materials prices looks to be roughly flat next year after falling nearly 8 percent between August 2008 and August 2009, although a sharp downturn in the dollar could generate increases even in the presence of a still weak U.S. construction economy, according to ABC’s outlook.

“Construction firms should prepare for 4 percent to 6 percent growth in construction costs per annum during the next several years, which is considerably slower than the two-year average for 2008 and 2009,” Basu said.

ABC predicted commercial, lodging and office construction will see a rough 2010 as office vacancy rates rise and hotel occupancy rates continue to fall. In addition, construction related to manufacturing is expected to be off 19 percent as the sector is unable to keep up with the brisk pace of activity it has seen in previous years.

To learn more about what to expect in the coming year, what it may mean for ABC member businesses and how to stay ahead of the game, ABC members can attend the Nov. 18 webinar, “2010 Construction Economic Forecast.” To sign up, click here.

To view the entire “2010 Construction Economic Forecast.” including a year-to-date performance graph, click here.

Milken Institute ranks Durham MSA 6th nationally

noreply@blogger.com (Bob Kruhm) — Thu, 12 Nov 2009 12:43:00 +0000

The Durham metropolitan statistical area has made it to the upper rankings of another rankings list, reports the Herald Sun.

The area, which encompasses Durham, Orange, Chatham and Person counties, moved into sixth place on the Milken Institute's "Best Performing Large Cities" list from 21st place last year.

The institute, an economic think tank based in Santa Monica, Calif., attributed the area's economy hardiness to technology start-ups and IBM, the largest employer in Durham's Research Triangle Park.

"The volatility associated with information and communications technologies has hit the region as Nortel Network's bankruptcy is causing layoffs and rippling through the local economy," the institute noted in its report. "Nevertheless, the metro area has weathered the recession remarkably well given its industry mix."

The institute also said that positive net migration, much of it from young professionals, into the area has helped buoy the housing market.

The top 10 economic performers in the country were the following, in order: Austin-Round Rock, Texas; Killeen-Temple-Fort Hood, Texas; Salt Lake City; McAllen-Edinburg-Mission, Texas; Houston-Sugar Land-Baytown, Texas; Durham; Olympia, Wash.; Huntsville, Ala.; Lafayette, La.; Raleigh-Cary.

The Raleigh-Cary MSA had come in second in 2008. The institute noted that the area ranks fifth in total job growth in the country over the past five years, and included UNC-Chapel Hill in the mention even though it's in Orange County, as well as SAS and Cisco.

The Durham MSA, in sixth place, was the highest-ranking metropolitan area in North Carolina. Other NC metro areas 2009 rankings include:

Fayetteville 31st

Wilmington 34th

Charlotte-Gastonia-Concord 47th

Winston-Salem 92nd

Greensboro-High Point 154th

Hickory-Lenoir-Morgantown 185th

Click Here to read the complete Herald Sun article.

ABCC and NCDOT sponsor Construction Careers Days

noreply@blogger.com (Bob Kruhm) — Wed, 11 Nov 2009 12:34:00 +0000

The North Carolina Department of Transportation (NCDOT) and Associated Builders and Contractors of the Carolinas (ABCC), partnered with Pitt County Schools, Pitt Community College, East Carolina University and Pitt Economic Development, coordinated a three day event, offering over 1200 high school students the opportunity to discuss, learn and try their hand at various construction career related activities.

The Pitt County Construction Career Days marks the 25th event of this kind since being introduced to North Carolina in 2001. Over 29,000 students from every county in the state have experienced these events.

Building a stronger workforce in the Carolinas is a founding principal of the ABC and providing opportunities for youth to learn about careers in construction is a critical component. ABC members, Watson Electric, Starr Electric, Precision Wall and Joyner Masonry all provided displays and hands-on activities.

NCDOT worked with the Associated Builders and Contractors of the Carolinas, Pitt County Schools, Pitt Community College, East Carolina University and the Pitt County Development Commission to coordinate the event. It is the 25th of its kind held across the state since 2001, Butler said.

Butler says the event has welcomed more than 29,000 high school students during that time.

Tim Eldridge, vice president of workforce development for ABCC said it is important for students to get exposed to construction careers because there will be plenty of jobs available when the economy improves.

“An event like this helps improve the perception of construction,” Eldridge said. “That is a good thing.”

Students had the opportunity to do everything from operating heavy equipment to bending conduit, laying brick, surveying and many other activities. Several of these events are already in the planning stages for 2010.

Click Here to read about the Pitt County event in The Daily Reflector.

Construction Career Days is an excellent opportunity for high school juniors and seniors to learn about rewarding careers in the commercial and highway construction industry. For more information check out NCDOT's Construction Career Days website.

Gov. Perdue unveils rare finance plan to complete I-485

noreply@blogger.com (Bob Kruhm) — Tue, 10 Nov 2009 12:52:00 +0000

The Charlotte Observer reports Gov. Beverly Perdue introduced a plan yesterday to complete the outer loop around North Carolina's largest city by 2015 in part through alternative financing that could save tens of millions of dollars.

Perdue said the state would put the last five miles of I-485 along the northeast side of Charlotte as well as two other area projects on the fast track. The loop project will begin next year, Perdue's office said in a news release.

The state could save money off the three projects valued at $540 million because contractors would be allowed to design and build the road and put up some of the financing, Perdue's office said.

"This innovative solution saves time, saves money for N.C.'s taxpayers, creates jobs and proves that North Carolina will develop new solutions to our 21st century transportation challenges," Perdue said.

Road contractors would be reimbursed over time for their share of the financing as a way to help state funds go further, Perdue spokeswoman Chrissy Pearson said.

Loop construction began in 1988 and was supposed to be finished six years ago. Before Monday, it had been on track to be completed in 2020, Pearson said.

The governor, speaking along I-485 and surrounded by Charlotte and state transportation officials, said the other two fast-track projects are an interchange connecting the loop to Interstate 85 and a road widening project for I-85 into Cabarrus County.

Perdue said in February that construction on the last section of I-485 would start by year's end. The state floated a plan to shift money away from another area project to do so, but Charlotte officials didn't like that idea.

Click Here to view the Charlotte Observer article.

Nonresidential construction jobs fall in October

noreply@blogger.com (Bob Kruhm) — Mon, 09 Nov 2009 12:11:00 +0000

Nonresidential building construction lost 3,200 jobs in October, according to the employment report by the U.S. Labor Department. On a year-over-year basis, U. S. nonresidential building construction employment is down 107,900 jobs, or 13.3 percent, and now stands at 706,400.

Associated Builders & Contractors Chief Economist Anirban Basu observes employment with nonresidential specialty trade contractors continues to get hit the hardest with 30,200 jobs lost in October and 441,000 jobs, or 17.4 percent, lost since October 2008. In the heavy and civil engineering construction sector, employment decreased by 13,700 for the month and 129,400 jobs, or 12.6 percent, on a year-over-year basis.

Meanwhile, despite the recent uptick in residential construction spending, the homebuilding sector shed 5,600 jobs for the month and 123,300 jobs, or 15.5 percent, since last October.

Over the past 12 months, total construction employment has shrunk by 15.6 percent losing 1,100,000 jobs, with 62,000 jobs lost last month alone.

The nation’s unemployment rate now stands at 10.2 percent – the highest level in 26 years. Last month, employers shed 190,000 jobs and 5,504,000 jobs, or 4.0 percent, have been lost since October 2008.

What This Means

“The headlines that will emerge from the October employment report will undoubtedly be fixated upon the fact that unemployment is now above 10 percent,” said Basu. “National unemployment is now at its highest level since April 1983. As a result, the markets are aware that consumer confidence will likely sag in the wake of this jobs report and that is not conducive to an improved corporate earning environment.

“However, there were some reasonably positive elements to the employment report. The three month average of national job loss is now down to 188,000 – the lowest it has been since August 2008,” said Basu.

“Further, the pace of job loss by nonresidential building contractors has slowed sharply with just 3,200 jobs lost last month. Professional and business services, an important engine of income growth in recent decades, added jobs for the second straight month, and for the first time since December 2007. In addition, temporary jobs, seen as a leading indicator for permanent employment, grew significantly,” said Basu.

“Unfortunately, at least two key segments of the nonresidential construction industry continue to experience significant job decline,” said Basu. “Despite stimulus spending, heavy and civil engineering construction and specialty trade contractors are still losing jobs. Based on today’s report, it remains unlikely that job losses will end on a monthly basis until well into next year.”

Click Here for the current ABC Construction Economic Update

OSHA issues guidelines for construction workers in highway work zones

noreply@blogger.com (Bob Kruhm) — Fri, 06 Nov 2009 12:50:00 +0000

The Occupational Health and Safety Administration (OSHA) released a formal letter of interpretation that now requires workers in all highway and road construction zones to wear high-visibility garments in two specific circumstances: when working as flaggers and when exposed to public vehicular traffic in the vicinity of excavations.

“Road and construction traffic poses an obvious and well-recognized hazard to highway/road construction work zone employees,” said Richard Fairfax, OSHA’s acting director for the directorate of construction. “[H]igh-visibility apparel is required under the [Occupational Safety and Health Act’s] General Duty Clause to protect employees exposed to the danger of being struck by public and construction traffic while working in highway/road construction work zones.”

The revision of the interpretation stems from an Occupational Safety and Health Review Commission ruling, which found that a 2004 interpretation letter stopped short of requiring that high-visibility garments be worn in all highway and road construction work zones. With this revision, OSHA now more clearly requires construction workers in all highway/road construction work zones to be protected from road and construction traffic by wearing high-visibility garments.

To read the release, click here.

Danis buys NC-based R. N. Rouse

noreply@blogger.com (Bob Kruhm) — Thu, 05 Nov 2009 12:29:00 +0000

A major Ohio construction contractor is expanding its reach with the acquisition of a North Carolina firm, reports Columbus Business First.

Ohio-based Danis Building Construction Co., agreed to acquire Goldsboro, N.C.-based R.N. Rouse and Company Inc. Financial terms of the deal weren't disclosed.

Danis has more than 400 employees company-wide and annual revenue of more than $300 million. R.N. Rouse is a privately owned construction company with 90 employees and average annual revenue of $75 million. In addition to its headquarters, the company has offices in Wilmington, N.C. and Cary, N.C. It serves health-care, industrial, institutional and corporate clients in North Carolina, South Carolina and Virginia.

CEO John Danis said the firm had been looking for expansion opportunities since opening a Jacksonville, Fla., office in 2000. The R.N. Rouse deal builds the company's geographic reach and gives it room for growth, he said.

A broader footprint also should allow the company to take on different work. While Danis' main focus is health-care contracting, R.N. Rouse’s focus is corporate office and technology construction.

Click Here for further information.

Magazine ranks NC business climate No. 1

noreply@blogger.com (Bob Kruhm) — Wed, 04 Nov 2009 12:44:00 +0000

North Carolina claimed the "Top Business Client" designation from Site Selection Magazine for the fifth year in a row. This is the eighth time in nine years that the state has the top hone in the publication's annual ranking.

"Business leaders know we are listening to them and working aggressively to meet their needs,” said Gov. Bev Perdue. “Companies know that in North Carolina they will find top-quality talent, world-class infrastructure, a pro-business environment, and premier education institutions. North Carolina is simply a great place to do business.”

“The synergy between North Carolina’s research parks, corporations, communities, and economic developers at the state and local levels is a major factor in this year’s top ranking,” said Site Selection Editor-in-Chief Mark Arend.

Site Selection magazine is an economic development publication. For more details, click Here.

OSHA lists 10 most frequent workplace safety violations

noreply@blogger.com (Bob Kruhm) — Tue, 03 Nov 2009 16:59:00 +0000

The U.S. Department of Occupational Safety and Health Administration (OSHA) has revealed the preliminary top 10 most frequent workplace safety violations for 2009 as part of a presentation at the NSC’s annual Congress & Expo. The number of top 10 violations has increased almost 30% over the same time period in 2008.

“We appreciate our colleagues at OSHA presenting their new violation data to such a receptive audience,” said National Safety Council President and CEO Janet Froetscher. “The sheer number of violations gives us new resolve in raising awareness about the importance of having sounds safety procedures.”

The workplace violations are:

1. Scaffolding - 9,093 violations
Scaffold accidents most often result from the planking or support giving way, or from the employee slipping or being struck by a falling object.

2. Fall Protection - 6,771 violations
Any time a worker is at a height of four feet or more, the worker is at risk and needs to be protected. Fall protection must be provided at four feet in general industry, five feet in maritime, and six feet in construction.

3. Hazard Communication - 6,378 violations
Chemical manufacturers and importers are required to evaluate the hazards of the chemicals they produce or import and prepare labels and safety data sheets to convey the hazard information to their downstream customers.

4. Respiratory Protection - 3,803 violations
Respirators protect workers against insufficient oxygen environments, harmful dusts, fogs, smokes, mists, gases, vapors, and sprays. These hazards may cause cancer, lung impairment, other diseases, or death.

5. Lockout-Tag out - 3,321 violations
“Lockout-Tag out” refers to specific practices and procedures to safeguard employees from the unexpected start up of machinery and equipment, or the release of hazardous energy during service or maintenance activities.

6. Electrical (Wiring) - 3,079 violations
Working with electricity can be dangerous. Engineers, electricians, and other professionals work with electricity directly, including working on overhead lines, cable harnesses, and circuit assemblies. Others, such as office workers and sales people, work with electricity indirectly and may also be exposed to electrical hazards.

7. Ladders - 3,072 violations
Occupational fatalities caused by falls remain a serious public health problem. The U.S. Department of Labor (DOL) lists falls as one of the leading causes of traumatic occupational death, accounting for 8% of all occupational fatalities from trauma.

8. Powered Industrial Trucks - 2,993 violations
Each year, tens of thousands of injuries related to powered industrial trucks (PIT), or forklifts, occur in U.S. workplaces. Many employees are injured when lift trucks are inadvertently driven off loading docks, lifts fall between docks and an unsecured trailer, they are struck by a lift truck, or when they fall while on elevated pallets and tines.

9. Electrical (general) - 2,556 violations
See #6.

10. Machine Guarding - 2,364 violations
Any machine part, function, or process that may cause injury must be safeguarded. When the operation of a machine or accidental contact injures the operator or others in the vicinity, the hazards must be eliminated or controlled.

Source: Today's Facility Manager. Click Here.

NC voter information found online

noreply@blogger.com (Bob Kruhm) — Sun, 01 Nov 2009 12:15:00 +0000

Last year, NC voters set record high turnout throughout our state. But a year later, voting booths could be sadly silent on November 3 if pivotal local elections are overlooked by the same voters who flocked to the polls last fall.

It doesn't have to be that way.

Research by the N.C. Center for Voter Education shows that the No. 1 reason why voters don't go to the polls is because they don't know enough about the candidates.

Fortunately voters can find the facts they need to cast a confident ballot by visiting NCVoterGuide.org, an online voter guide created in a partnership between the N.C. Center for Voter Education and UNC-TV. The guide features candidate profiles, along with resources on voting in this year's election.

Local elections may not have the flashy ads and endorsements we had last year, but they do deal with such vital issues as the water we drink, the neighborhoods we live in and the schools our children attend. Cast your vote on Tuesday.

Clayco is seeking subcontractors for two design/build mess halls

noreply@blogger.com (Bob Kruhm) — Fri, 30 Oct 2009 11:14:00 +0000

The North Carolina Military Business Center (NCMBC) will host a free subcontractor Meet and Greet with Clayco, Inc. on November 10, 2009 from 8:00 a.m. to 12:00 p.m. at the Coastline Conference & Event Center (501 Nutt Street, Wilmington, NC 28401). All NC contractors are welcome to attend. Online registration is required.

Clayco is seeking subcontractors for Military Construction Projects P-1212 and P-882, Hadnot Point, Camp Lejeune.(Contract N40085-09-C-3210).

This $19.4 million project includes design and construction of one single-story and one two-story mess hall in the Hadnot Point area of Camp Lejeune. No contracts are expected to be awarded during the event. Clayco will use the interviews at the event to contact potential subcontractors.

Clayco is seeking SB, SDB, SBA HUBZone, VOSB, WOSB and SDVOSB subcontractors with:

· Bonding capability in some trades

· Ability to maintain current insurance

· Ability to meet installation access requirements

· Capability of maintaining staffing to meet schedule deadlines

· Financial capability to accomplish the work required

· Experience working on military installations

· Mechanical, electrical, plumbing, and fire protection trades have already been awarded. However contractors in these specialties are encouraged to attend for consideration on future projects at Camp Lejeune.

For more information on Clayco, Inc. click Here.

The NCMBC is a component of the NC Community College System, headquartered at Fayetteville Technical Community College, Fayetteville. To register for this event, and for more information on NCMBC, visit www.ncmbc.us.

Dozers descend on Capitol Hill; Lawmakers oppose extension of transportation bill

noreply@blogger.com (Bob Kruhm) — Thu, 29 Oct 2009 11:33:00 +0000

Idled by recession, a caravan of bulldozers paraded through Washington urging Congress to reauthorize multi-year highway bill

A caravan of bulldozers and other construction equipment paraded through the streets of Washington to send a message to lawmakers that they must act now to stop the job bleeding in the construction equipment industry. Start Us Up USA! campaign organizers, joined by House Transportation & Infrastructure Committee Chairman Jim Oberstar (D-MN) and other allies, staged a rally on the National Mall against a backdrop of idle construction equipment and a sea of orange flags to emphasize the 550,000 jobs lost in this industry and encourage the federal government not to delay enactment of multi-year highway legislation.

Congressional Quarterly reports Republican opposition to a six-month extension of the current transportation bill has killed the plan in the Senate. Instead, lawmakers will vote on a stopgap spending measure for the highway authorization bill by the end of the week. The current bill expires Saturday, and the stopgap measure would extend funding through Dec. 18.

"Across the country, time is running out for the men and women of this industry as job losses continue to mount and prevent a broader economic recovery," said Toby Mack, president and CEO of the Associated Equipment Distributors (AED). "New transportation funding is a critical component to spurring a recovery of the construction equipment industry nationwide and improving our nation's infrastructure," added Dennis Slater, president of the Association of Equipment Manufacturers (AEM), who along with AED, is co-sponsoring the Start Us UP USA! campaign.

While recession abates for some sectors of the U.S. economy, the construction equipment industry remains stalled in a deep depression, according to Mack and Slater. In fact, eight percent of all jobs lost during the recession - or two out of every 25 - can be traced to this ailing industry, according to an economic report released just last month by IHS Global Insight.

IHS Global Insight analyzed the impact of the construction equipment depression on individual states. Construction industry employment losses in North Carolina were estimated to be 19,804 jobs. Output losses in the state were estimated at $3.84 billion.

AEM and AED largely blame the downturn in their sector, in part, on the uncertainty surrounding the future of the highway program and a scarcity of new federal investment in needed transportation improvements that would benefit the public and strengthen our nation's competitiveness.

The current law - SAFETEA-LU - that funds the majority of our nation's transportation investments is just days from expiring on October 31, and Congress and the administration have yet to move on a new multi-year reauthorization bill. Leaders in the Start Us Up USA! campaign are calling for enactment of a new transportation bill before the spring construction season begins in early 2010.

Additional details can be found at www.StartUsUpUSA.com.

AIA Architecture Billings Index posts slight improvement

noreply@blogger.com (Bob Kruhm) — Wed, 28 Oct 2009 12:01:00 +0000

The American Institute of Architects' Architecture Billings Index returned to its July level with its September ABI rating of 43.1, up from 41.7 in August and matching its 43.1 number from two months ago.

The July number was a six-point increase over June reports PSMJ Resources, so it's starting to look like August's number represented merely the latest in an ongoing up-and-down pattern that has plagued the ABI for the past several months. The index was 42.9 in May, dipped to 37.7 in June, increased to 43.1 in July, dipped to 41.7 in August, and went back up to 43.1 in September. Any score above 50 indicates an increase in billings.

This type of pattern makes it difficult for A/E/C firms to make strategic decisions with any certainty that their fortunes are turning for the better.

Then again, the new projects score in August was 59.1, its highest level since September 2007 and up from 55.2 in August, 50.3 in July, and 53.8 in June.

"The fact that inquiries for new projects are so high is an encouraging sign that we may be seeing new construction activity entering the design phase," said AIA Chief Economist Kermit Baker. "But that optimism has to be tempered by the fact that the marketplace is so competitive that firms are broadening their search for new projects, thereby inflating the number of inquiries that they are reporting. However, some larger stimulus-funded building activity should be coming online over the next several months, partially offsetting the steep decline in private commercial construction."

Regional averages were as follows: Northeast (47.2, up from 45.2 in August, 37.8 in July, and 42.8 in June, but still below the 48.3 in May), Midwest (43.0, matching its 43.0 in August but up from 36.9 in July), South (42.7, down from 44.1 in August and 43.4 in July, but up from 40.5 in June), and West (36.0, down from 37.5 in August, 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April).

The September ABI breaks down by sector as follows: multi-family residential (45.1, up from 43.4 in August, 40.7 in July and 42.7 in June), institutional (43.9, up sharply from 37.5 in August, 37.1 in July, and 37.0 in June), commercial/industrial (39.0, down sharply from 45.6 in August, 42.9 in July, and 39.5 in June), and mixed practice (36.3, down sharply from 41.4 in August, 42.9 in July, 43.5 in June, 44.5 in May, 44.2 in April, and 44.0 in March).

Click Here to view the PMSJ Resources recent posting.

Low U.S. stimulus bids could put jobs at risk

noreply@blogger.com (Bob Kruhm) — Tue, 27 Oct 2009 10:33:00 +0000

Contractors may be bidding themselves out of business for highway and infrastructure projects included in the U.S. economic stimulus plan, as they low-ball their proposals in hopes of winning much-needed work.

Reuters reports bids have come in for as much as 30 percent less than what state agencies had projected and been welcomed as examples of the $787 billion American Recovery and Reinvestment Act's success, as the federal government spends leftover funds on additional projects.

President Barack Obama said the low project costs, "means we can do more. We can create more jobs and launch more projects with every taxpayer dollar."

That, in turn, could help realize Obama's promise that the stimulus will create or save more than 3 million jobs, the bulk of them in a construction industry that has suffered tens of thousands of layoffs during a severe housing slump.

But the low bidding may have the opposite effect. Contractors could bid at such steep discounts that they are unable to cover the costs of completing projects.

Proposals have lagged estimates because contractors are hungry for work, according to the Government Accountability Office.

"Several state officials told us they expect this trend to continue until the economy substantially improves and contractors begin taking on enough other work," the nonpartisan auditing agency said in a September report.

For Barry LePatner, a lawyer representing commercial real estate owners and developers, "that should not be a prospect for glee. It should be a prospect for alarm."

Members of the construction industry traditionally submit bids at cost or lower, hoping "to gain the right during the course of the project to put in claims and delays and so on that hopefully gets them profit," he said.

There is no room for cutting, he said. Because the government has recycled surplus stimulus dollars into new undertakings, there is also no room for projects going over budget.

"States now are going to be faced with the prospect of those projects that are 'underfunded,' meaning contractors found out that they don't have the money -- except from their own pockets - to complete the jobs," he said. "States are either going to find claims being made or workers walking off the job, which is the antithesis of what the stimulus is all about."

LePatner, author of the book "Broken Buildings, Busted Budgets: How to Fix America's Trillion-Dollar Construction Industry," said companies should be able to sign "fair price fixed contracts," in which they "bid for a fair price plus a fair profit so they will get to the end of the project."

A recently released federal report showed $16 billion worth of stimulus contracts have been awarded in a range of areas, not just transportation and infrastructure, since the plan passed in February. Only 14 percent of that amount has been received by contractors.

Money is often paid in full when a project is done, and a slow payment rate could mean delayed completions, LePatner said.

If contractors cannot finish their work, the states will not have to cover the shortfalls, and the projects will still be completed, said an official of the Associated General Contractors of America.

"Contractors are required on any project that has federal money and pretty much on any public projects ... to have bonds," said Brian Deery, the group's senior director of highway and transportation. "If the contractor isn't able to perform that contract, then the bonding company is on the hook for completing that work."

Government estimates often trail behind market changes because the agencies frequently consult contracts from a year before, when prices were different. Materials prices are currently much lower than they were a year ago, Deery said, which could have created some discrepancies between projections and bids.

Still, Deery said, many bids have been cut because struggling contractors are eager to have their bids chosen.

"The real concern is that there are a lot of contractors that have not operated in this kind of awful market" he said. "There are some sort of less experienced contractors that might underbid. And that, ultimately, might cause them financial problems, and they might not survive."

Click Here to read the complete article.

September construction starts decline seasonally

noreply@blogger.com (Bob Kruhm) — Mon, 26 Oct 2009 15:27:00 +0000

Reed Construction Data (RCD) announced recently that the year-to-date value of construction starts through September 2009, excluding residential contracts, totaled $184.7 billion, 12.8% less than in the same period in 2008.

Individual month of September starts were 20.1% lower than in August so the September decline was about 7% after seasonal adjustment. Nonetheless, the starts trend has recently improved after the plunge in June. Starts averaged 5% higher in July-September than in the same period last year. Including the depressed June starts, the seasonally adjusted starts trend is approximately stable so far this year.

This is the net of rising starts for heavy projects and declining starts for non-residential building projects, especially developer-financed projects. The current trend is consistent with the RCD forecast which expects construction spending to dip slightly more into the winter and then recover slowly. The RCD starts forecast expects little change well into next year with a turn to expansion later in 2010.

The value of construction starts each month is summarized from RCD’s database of all active construction projects in the United States, excluding single-family homes. Missing project values are estimated using RSMeans’ building cost models.

The only significant gains in September from August were for nursing homes (+112%), hospitals (+42%) and retail (+26%). The nursing home surge appears to be seasonal and the hospital and retail gains are rebounds from an unusually weak August. These September jumps do not change the expected near-term trend in these markets.

The three key targeted markets under the Stimulus Plan all declined sharply in September. Bridge starts were down 63% from August. Highway starts fell 30% and water/sewer starts dropped 23%. But these dips are the usual seasonal decline at the end of the summer and do not suggest that stimulus funding for heavy projects has peaked, although a peak is expected later this year.

Both manufacturing and miscellaneous civil starts remained very high again in September due to energy-related projects including power generation and distribution, oil and gas field facilities and refinery retrofitting to produce cleaner fuels. Manufacturing starts tripled from August to the largest total in more than two years.

Click Here to view the RCD data.

McGraw-Hill construction outlook: Major decline for construction economy in 2009, mixed picture for 2010

noreply@blogger.com (Bob Kruhm) — Fri, 23 Oct 2009 14:07:00 +0000

In its 2010 Construction Outlook report, released at the Outlook 2010 Executive Conference in Washington, D.C., McGraw-Hill Construction estimates that new construction starts will show a decline of 25 percent in 2009, followed by an increase of 11 percent in 2010.

The 2009 decline would follow declines of 7 percent in 2007 and 13 percent in 2008. Unlike previous years in which weak residential markets powered the declines, the primary cause of this year’s sharp decline is commercial construction — dropping by 43 percent.

According to the report, “the diminished activity is taking place … amidst the longest and steepest recession since the Great Depression.” MHC predicts that high commercial vacancy rates and a large volume of commercial loans coming due could be the greatest threat to a robust recovery in the commercial construction sector.

Looking to 2010, the report predicts that firms will remain slow to hire, credit will remain tight, employment and the fiscal condition of the states will remain weak, and commercial construction starts will decline another 4 percent.

For next year, MHC forecasts substantial growth in single-family housing (+32 percent), multi-family housing (+16 percent), and public works (+14 percent) construction. Growth areas will include the construction and retrofitting of federal buildings, and the construction of highways, bridges, sewer and water projects. MHC economists say this sets the stage for a “more sustained expansion in 2011.”

Learn more at www.construction.com.

Construction costs beginning to climb

noreply@blogger.com (Bob Kruhm) — Wed, 21 Oct 2009 12:44:00 +0000

Construction costs, which had been relatively low for much of the past year, are beginning to climb at an increasing rate, signaling the end to the “limited-time” sale for construction, according to a new analysis of the latest producer price index released by the U.S. Bureau of Labor Statistics.

The analysis by Ken Simonson, chief economist for the Associated General Contractors of America, found significant upward movements between August and September 2009 in the prices of copper (10 percent increase), aluminum (2 percent increase), and steel (3 percent increase). All three products are essential components for the vast majority of construction projects. The construction economist added that since the prices were collected a month ago, copper, aluminum and diesel fuel have moved to multi-month highs.

“The days of construction estimates coming in 20 percent under estimate may soon be coming to an end,” Simonson said. “These figures serve as an important reminder that governments and developers looking for a good deal on construction should act quickly before having to pay significantly more for their projects.”

Simonson added that prices for other significant construction materials also rose in September as compared to the previous month. For example, the cost of plastic construction products rose 1.2 percent, the cost of prestressed concrete products by 1.5 percent and iron and steel pipe and tube by 1.2 percent. Some construction materials prices did continue to decline, such as gypsum (down 1.2 percent) and plywood (down 0.3 percent).

Mr. Simonson said the producer price data serves as a reminder that “private owners and public agencies should accelerate any plans they have for construction to take advantage of materials costs that remain generally below year-ago levels but which are rapidly reversing their slide.”

Stimulus dollars put NC road contractors to work

noreply@blogger.com (Bob Kruhm) — Tue, 20 Oct 2009 01:59:00 +0000

Kelvin Whitehurst of Raleigh received a repaving contract on I-540 and is enlarging his trucking business.

Kelvin Whitehurst bought a third dump truck and hired a third driver this summer, after he landed his biggest job yet in 10 years as a highway subcontractor.

He took in $155,000 for three months of work lining up trucks to haul asphalt for a nighttime paving operation on the Interstate 440 Beltline. Whitehurst had a small piece of a $3.6 million project financed entirely with federal economic stimulus dollars.

In these tough economic times, it was just what he needed, the News & Observer reports.

"Dump-trucking was kind of hard this year," said Whitehurst, 41, of Raleigh. "So I was really thinking about downsizing until this contract came along."

Congressional leaders and President Barack Obama talked a lot about job creation in February when they approved the American Recovery and Reinvestment Act, a three-year program of $787 billion in spending and tax cuts that will send at least $8.6 billion to North Carolina. The money is flowing into programs from home weatherization and flu shots to schools and public works.

North Carolina highway contractors are recalling workers idled last fall after a nationwide economic contraction forced a dramatic cut in highway spending. The state Department of Transportation has 110 stimulus-funded road and bridge projects worth $348 million under way, with more contracts to be awarded in the coming year.

"We've hired back maybe two or three dozen people who had been laid off, with maybe a handful of new hires," said Ricky Vick, executive vice president of Wilson-based S.T. Wooten Corp. "It's been the most difficult economic environment that I've seen in my 32 years here."

Wooten has been the low bidder for 14 DOT stimulus contracts so far -- the most won by any contractor -- worth more than $45 million. They include several Triangle paving jobs and the $14.3 million Booker Dairy Road extension in Smithfield.

"It has been a huge plus for our ability to retain very good people and keep them working," Vick said.

It isn't easy to figure out how many construction jobs have been created -- and how many layoffs averted -- with stimulus money. North Carolina has lost 36,000 construction jobs in the past year, a 15percent drop, according to September employment reports.

The state received $838.8 million for highway, bridge and transit projects. DOT leaders are angling for hundreds of millions more in stimulus grants for a new Inter state 85 bridge near Salisbury and a statewide rail upgrade.

State and federal officials were busy last week turning out their first estimates of stimulus-supported jobs in all categories. A federal report covering about 7 percent of all stimulus spending said that contracts awarded directly by federal agencies had created 302 jobs in North Carolina.

A broader review, looking primarily at state agency spending, counted 24,442 stimulus jobs in North Carolina so far. Schools and Medicaid programs accounted for more than 19,000 of the total, and the tally included 248 jobs created or preserved by DOT projects.

Beltline repaving

Work is winding down on the $3.6million project to repave the Beltline from Wake Forest Road to Wade Avenue. It is one of three stimulus contracts won so far by Rea Contracting of Charlotte.

"We probably have about 40 people working that would be at home right now if it wasn't for that stimulus project," said Ed Spencer, a Rea vice president who oversees the Raleigh operations. "Without the stimulus money, there would be very little work."

DOT reports show that Rea and its subcontractors, including Whitehurst, paid 113workers who put in at least a few hours on the Beltline job in August, their busiest month.

But most of them worked only part time on the Beltline. In the road construction industry, equipment operators and other workers frequently divide their hours among two or three job sites in the same month.

In July and August combined, the Beltline project workers were paid an average of $15.05 an hour for a total of 7,480 hours. A standard 40-hour week adds up to an average of 347 hours in two months, so this project provided work for the equivalent of roughly 21 full-time employees.

Whitehurst did his part to spread the wealth. Even after he took on a third driver and picked up a repossessed truck for $65,000, he had more asphalt than he could handle.

He rounded up about a dozen independent truckers for the Beltline job and wrote payroll checks for $33,368 in July and August.

"I just hired on some extra guys who have trucks," Whitehurst said, "and we all pitched in to get the job done."

The recession has forced contractors and subcontractors to compete fiercely for DOT jobs, with project bids frequently coming in at less than 80 percent of the cost estimated by DOT engineers. That's a bargain for taxpayers, and it means North Carolina will get more miles of road improvements for its share of theObama stimulus.

'Dirt-cheap' bidding

But it squeezes profits for the companies that get the work. Wayne Turner of Raleigh, whose Turner Asphalt was another subcontractor on Rea's Beltline job, is less upbeat than Whitehurst.

"It's not enough money to go around," Turner said. "We're fixing to do a big layoff next month. There are so many people without work right now that people are bidding stuff dirt cheap. Maybe next year it will be better."

When Gene Conti took over as state DOT secretary in January, he warned state leaders not to look upon Obama's stimulus program as a bonanza for road building. North Carolina's share will roughly balance out an expected $900 million shortfall in state and federal transportation revenues over the next three years.

That forecast is still holding. Fuel tax proceeds have stopped falling and now are running slightly above last year's level -- but still below what the state collected two years ago. Collections of the state highway use tax on car sales are down more than 20 percent.

The stimulus is providing a tenuous lifeline for road builders, said Mark Foster, the DOT's chief financial officer.

"They were laying people off left and right before the stimulus came," Foster said. "It has at least temporarily stopped that.

"But really the question is what's coming afterward. If the economy doesn't pick up, what will replace that level of investment?"

Click Here to view the News & Observer article.

NC construction fatalities down 41%

noreply@blogger.com (Bob Kruhm) — Fri, 16 Oct 2009 11:45:00 +0000

The Triangle Business Journal reports construction workplace fatalities fell in North Carolina in the 12 months between October 2008 and September 2009, a decline co-inciding with a sleep falloff in construction startups due to the economic downturn.

A total of 10 workers lost their lives during the period, which is the federal fiscal year. Seventeen died statewide during the same months in 2008 and 24 in 2007. That's a 41 pecent drop in one year and a 58 percent drop over two years.

Most construction-related fatalities happen on commercial building jobs – in 80 percent of 51 cases over the past three years – and are caused by crushing events, falls or falling objects.

The numbers were included in a recently updated report complied by the Occupational Safety and Health Division of the North Carolina Department of Labor.

Department of Labor spokesman Neal O’Briant says researchers attribute the drop, in part, to the slowdown in the industry but also to an increased emphasis on workplace safety.”There is an effort across the industry to emphasize the issue,” he says.

Click Here to read the Triangle Business Journal article.

Stimulus saves or creates 24K NC jobs so far

noreply@blogger.com (Bob Kruhm) — Thu, 15 Oct 2009 11:00:00 +0000

The North Carolina Office of Economic Recovery and Investment says federal stimulus money sent directly to state agencies has saved or created at least more than 24,000 jobs so far.

The News & Record reports the state agency began rolling out numbers late Wednesday on how the federal money received has been spent to date. State agencies had a deadline last weekend to report to Washington on the use of recovery dollars.

Sizeable amounts of money have been used so far to fill revenue gaps in the state budget, contract for 110 highway projects and provide supplemental funds to local school districts.

The state recovery office said more than 19,000 of the jobs were saved or created, thanks to more than $1 billion set aside in the budget for the public schools and Medicaid.

\Click here to read the News & Record article.

State offers minority firms help with work projects funded by federal stimulus

noreply@blogger.com (Bob Kruhm) — Wed, 14 Oct 2009 11:28:00 +0000

A new statewide program will help minority-owned contractors access their share of federal stimulus money, the Charlotte Observer reports.

The N.C. Institute of Minority Economic Development and other agencies unveiled the outreach effort made possible with a federal grant. The program is meant to connect small businesses with stimulus-funded construction projects.

The hope, officials said, is to create jobs and jump-start the state's economic recovery.

This week, the U.S. Department of Commerce's minority business development agency granted $900,000 to seven minority business centers across the country, including one in Durham that will lead the N.C. effort.

The money will allow the office to hire at least one worker to focus exclusively on connecting stimulus money with minority-owned businesses. In addition, it will host meetings and educational programs across the state.

David Hinson, national director of the development agency, said the project would help businesses get their "fair share" of North Carolina's more than $6 billion in stimulus funds.

He also urged minority-owned businesses to reach out to the agencies that can help, and to be willing to adapt. Businesses should think about merging, for instance, or acquiring other companies to be stronger, Hinson said.

He said businesses in North Carolina have unique opportunities because of the state's intellectual capital and its leaders' emphasis on emerging fields such as energy and biotechnology.

Local businesses in the crowd Friday praised the government's efforts.

"Small business is really the foundation of any community," said Renee Jones, subcontractor program manager at Skanska USA Building Inc., which has an office in Charlotte. "Until we can get that stabilized and growth can continue, we'll have problems."

Jones said her company is a "huge supporter" of the N.C. minority business institute and often hires minority subcontractors for its projects. She said the company, which develops offices, homes and public-private partnership projects, also hosts educational sessions to help subcontractors earn contracts and complete them successfully.

State leaders will host five business-to-business forums, meant to match minority-owned businesses with stimulus fund recipients, as part of the new government effort. The first will be held Oct. 22 in Charlotte.

For more information, visit www.ncmbecrecovery.com.

Stimulus work is up, but so is jobless rate

noreply@blogger.com (Bob Kruhm) — Mon, 12 Oct 2009 18:44:00 +0000

Despite an increasing number of federal stimulus projects under way, construction’s unemployment rate rose in September as the industry lost 64,000 more jobs, observes Engineering News-Report (ENR). Industry officials say the American Recovery and Reinvestment Act has been a help but has not halted construction’s continued huge layoffs.

The industry’s September jobless rate climbed to 17.1%, from 16.5% in August, the Bureau of Labor Statistics reported on Oct. 2. Construction’s rate remains the highest among industries. The 17.1% mark also was well above the industry’s September 2008 level of 9.9%. Since the recession began in December 2007, construction has shed 1.5 million jobs, though average monthly job losses fell to 66,000 in the May-September period, from 117,000 in the November-April period.

Meanwhile, the number of ARRA-funded highway and transit projects under contract continues to increase, the House Transportation and Infrastructure Committee reports. Committee Chairman James Oberstar (D-Minn.) said at an Oct. 1 stimulus hearing that those projects created or preserved about 122,000 “direct, on-project jobs” as of Aug. 31. Transportation Secretary Ray LaHood told the committee, “I think in the construction industry...we have made a huge impact.” He added, “There are a lot people working that, without the recovery program, would not be working.”

Construction economists acknowledge the lift from ARRA but see no positive signals in the latest BLS numbers. Anirban Basu, Associated Builders and Contractors’ chief economist, said the stimulus funding “does not appear to be enough to offset the persistent tight credit market and the lack of demand for new retail, lodging, office and other space.”

Stephen E. Sandherr, the Associated General Contractors’ CEO, says ARRA has saved 100,000 construction jobs. “I would hate to see what the industry would look like without it,” he says. Still, he says AGC firms are now in “survival mode.” AGC on Sept. 30 proposed a plan to spark the industry’s hard-hit privately funded sector, which it says accounts for 60% of the total market. The proposal, which would require congressional action, includes implementing tax breaks to spark real estate investment and also removing trade barriers to boost demand for manufacturing and transportation facilities.

Click Here to read the ENR summary.

There is no margin for error in today’s market

noreply@blogger.com (Bob Kruhm) — Mon, 12 Oct 2009 11:33:00 +0000

by Don Short, President, Tempest Company.

To say the market is tight for bidders today is a tremendous understatement. It is downright poor. One of my friends said the market is so bad that he could not buy a job even if he wanted to! So how do you make it through the market today? As much as I would like to have a six or nine month vacation to sit out the bloodbath in the market, that is not the answer.

■Projects need to be selectively pursued. Go for the ones that are more difficult to accomplish. Tougher jobs tend to weed out the competition or cause bidders to cover the risk by increasing the margin used in the bid.

■Go for the market segment that you know best. Familiarity with the work can lead to efficiencies. These may just win you the work with some profit on it. This is how specialty subcontractors can out perform others that do not do the same or similar work on a day to day basis.

■Stay away from, or do not put a lot of effort into bidding projects where the owners are only looking for low dollars. Bid to owners that are not interested in having just a low price. Yes, they do exist. A lot of owners and developers are looking for value on their projects. Research and determine what they are looking for in their project and give them the value they are looking for. It will profit you.

■Use subcontractors that have the right scope and dollars. You will not lose money on the costs that are not in the bid if they have it covered. You will not lose jobs by having duplicates scopes priced.

■Watch your competition. If you are not keeping bid statistics on your competitors you should have been. Keep a low profile in markets where your competitors are taking on the cheap work. At some point they will have more cheap work than they can handle. Their bonding capacity will be tied up. Then you can hit the market with bids that have a potential for some profit.

■Out smart your competition. Think of a different approach to performing the work. All too often we get in a rut and do the job the same old way it always has been. The time to plan the job is when preparing the bid, not after the award.

The hard times are a good reason to innovate in the way you do business. Take these lessons into the better times and earn a bit more. You will have a better opportunity to survive the next downturn.

Don L. Short, II, Tempest Company founder and president, is a Fellow of the American Society of Professional Estimators (ASPE), the leading professional society in its industry. Mr. Short is a Certified Professional Estimator and Past National President of ASPE. His blog postings "Oh, By the Way..." can be found Here.

DHS repeals no-match rule; Brookings-Duke panel recommends improvements to E-Verify

noreply@blogger.com (Bob Kruhm) — Fri, 09 Oct 2009 10:34:00 +0000

The Department of Homeland Security (DHS) has repealed the "no-match" rule that would have threatened employers with prosecution unless they fired workers whose Social Security numbers did not match entries in the E-Verify government database, ending a two-year battle in a San Francisco federal court.

Although DHS formally withdrew the "no-match" rule Wednesday, the administration is still supporting E-Verify, a program enabling employers to check workers' names against electronic records that are supposed to screen out illegal immigrants.

E-Verify is voluntary for most employers but mandatory for the 170,000 companies holding federal contracts and for their subcontractors. This week, a House-Senate conference committee voted to extend E-Verify for three years.

"E-Verify has many of the same problems as no-match," said Chris Calabrese, legislative attorney for the American Civil Liberties Union, which took part in the San Francisco lawsuit. Although employers are not threatened with prosecution under the program, he said, thousands of workers are in danger of losing their jobs based on "databases that are not terribly accurate."

President George W. Bush's administration proposed the no-match rule in 2007, saying it would add teeth to a 1986 law that prohibited businesses from knowingly employing illegal immigrants.

The "no-match" rule would have given employees three months to clear up any differences between the Social Security numbers they gave to employers and the numbers in the Social Security Administration database. After that, an employer who failed to fire the worker would be subject to civil fines and criminal prosecution.

Opponents applauded the Obama administration's decision to drop the rule.

"The no-match program was a flawed and ineffective enforcement tool that would have hurt U.S. citizens and other authorized workers," said Richard Trumka, president of the AFL-CIO.

Brooklings-Duke panel identifies E-Verify flaws

Improving and certifying the effectiveness of the E-Verify electronic employment verification system should be part of immigration reform efforts, according to a new report from a diverse panel of experts convened by the Brookings Institution and Duke University.

"The employment verification system presents particular challenges with error rates, including “false negatives” and “false positives,” states the report made Oct 6 by the Brookings-Duke Immigration Policy Roundtable.

The Internet-based E-Verify system is operated jointly by the Homeland Security Department and the Social Security Administration. It allows employers to check an individual’s Social Security number to determine whether the number is valid. However, the system is not designed to detect stolen or borrowed Social Security numbers, although DHS has added some photographs to the database to help stop identity frauds.

On September 8, E-Verify became mandatory for use by most federal contractors. It is also required for some employers under state law in 12 states.

The need for E-Verify to determine legal eligibility to work in the United States has been rising, and will continue to grow as the Obama administration proposes reforms to cope with an estimated 11 million illegal immigrants currently in the U.S., the panel said.

However, the system is flawed. It sometimes falsely deems a legitimate employee ineligible to work, and identity thieves using stolen Social Security numbers and other documents can fool the system into clearing them.

To reduce those errors, the report recommends starting a secure national identification system with biometric data, such as secure Social Security cards or driver’s licenses that contain biometric data, along with a personal identification number system such as is used in automatic teller machines.

Each of the biometric options has “pluses and minuses,” the report said, but it recommends that “Congress must adopt one approach, fund it, and make it the linchpin of a reliable workplace verification program.”

The panel also advised that expanding E-Verify as part of an immigrant legalization program should go be combined with creating an oversight mechanism for the system.

It suggested that an independent federal agency, such as the Government Accountability Office, “would need to evaluate the E-Verify system and certify when it had reached a reasonable, previously agreed-upon level of use and effectiveness.”

The report did not specify that level of effectiveness. DHS acknowledges a 3.9 percent error rate in initial determinations of work eligibility under E-Verify; some employers using the system have reported initial error rates as high as 13 percent.

The E-Verify certifications would continue on a regular basis, along with a workplace enforcement regime and inspections, the panel recommended.

Click Here to view the Brookings-Duke Report executive summary.

Charlotte architecture firm looks overseas and inside offices

noreply@blogger.com (Bob Kruhm) — Thu, 08 Oct 2009 11:45:00 +0000

Barbara Briccotto, principal with Gresham Smith

A Charlotte architecture office is hoping to beat the downturn by tapping two distinct markets: overseas projects and firms wanting to downsize their offices.

The Charlotte Observer reports within the real estate industry, architects have been among the hardest hit during the recession. They are considered a leading indicator of construction activity - a sign of what's to come because they are among the first contacted when a developer is looking to build. Construction typically starts 9 to 12 months after architects are hired.

Gresham Smith and Partners first expanded overseas in 2006 when it won a competition to design the Jasper Tower in Shanghai's financial district.

A Nashville-based national planning, engineering, architecture, and interior design firm that employs eight people in Charlotte, the firm has secured additional work on health care and office projects in China. Gresham Smith's Charlotte office is making a more aggressive push in the country this year.

The firm is also working to expand contacts in the Republic of Georgia, an "emerging center of opportunity" where the firm is currently working on a mixed-use project - a 30-floor high-rise with residential, office and retail space in Tbilisi, said principal Barbara Briccotto.

Gresham Smith principal Scott Wilson is leading efforts in Georgia and is assisting with other international ventures.

Another hot spot eyed by the firm: Redesigning work sites for companies that want to cut costs, reduce square footage or update their space to fit the growing number of employees who work remotely.

For example, Briccotto said, the firm is seeing more companies shrink individual workstations while expanding communal space, such as meeting areas, to support a more collaborative approach favored by younger workers.

"Everyone is focused on the bottom line and we know a lot of the bottom line is personnel costs and real estate costs," she said. "As we see firms downsize, it's a great opportunity for them to rethink their workplace."

Gresham Smith's workload dropped last November, revenues have fallen around 30 percent, and the firm has laid off "a couple" of employees locally. Design for retail and multifamily projects was among the work most affected. Owners in the corporate and health care markets have also become slower to start projects, according to the company.

Briccotto said the firm has been able to keep costs down, and its staff lean, by sharing resources across its 17 U.S. offices.

Foreign projects, which currently account for 10 percent of the company's business, are expected to grow to make up as much as 30 percent of business in the near future, Briccotto said. Interior renovations, or redesigning workstations, which makes up about 10 percent of current work, is expected to see similar growth.

Click Here to view the Charlotte Observer article.