November 7th, 2019 
Volume 21, No. 45

Contents

 

Construction Jobs and

Wages Advance in October

Per the U.S. Department of Labor’s monthly employment situation report, the construction industry added 10,000 in October, pushing the total number of jobs in the industry over the past 12 months to 148,000. The construction industry’s annual 2% growth outpaced the overall 1.4% rate of jobs retained as investments in infrastructure remains steady. The monthly gain in jobs was boosted in part by an increase in single-family home building. The October report also found that unemployment in the construction industry was 4%, hourly earnings advanced 2.4% from last year to $30.95, which is higher than the overall private-sector average of $28.18. Despite the steady growth in construction employment, overall construction spending has declined 2% between September 2018 through September 2019. Industry experts point to ongoing trade disputes and higher tariffs as a factor in this decline.

 

Construction Starts to Slip Back in 2020

According to Dodge Data & Analytics

Dodge Outlook Report Predicts Economic Slowdown to have Broad Based Impact on Total Construction Growth

Dodge Data & Analytics today released its 2020 Dodge Construction Outlook, a mainstay in construction industry forecasting and business planning. The report predicts that total U.S. construction starts will slip to $776 billion in 2020, a decline of 4% from the 2019 estimated level of activity.

“The recovery in construction starts that began during 2010 in the aftermath of the Great Recession is coming to an end,” stated Richard Branch, Chief Economist for Dodge Data & Analytics. “Easing economic growth driven by mounting trade tensions and lack of skilled labor will lead to a broad based, but orderly pullback in construction starts in 2020. After increasing 3% in 2018 construction starts dipped an estimated 1% in 2019 and will fall 4% in 2020.”

“Next year, however, will not be a repeat of what the construction industry endured during the Great Recession. Economic growth is slowing but is not anticipated to contract next year. Construction starts, therefore, will decline but the level of activity will remain close to recent highs. By major construction sector, the dollar value of starts for residential buildings will be down 6%, while starts for both nonresidential buildings and nonbuilding construction will drop 3%.”

The pattern of construction starts for more specific segments is as follows:

  • The dollar value of single family housing starts will be down 3% in 2020 and the number of units will also lose 5% to 765,000 (Dodge basis). Affordability issues and the tight supply of entry level homes have kept demand for homes muted and buyers on the sidelines.
  • Multifamily construction was an early leader in the recovery, stringing together eight years of growth since 2009. However, multifamily vacancy rates have moved sideways over the past year, suggesting that slower economic growth will weigh on the market in 2020. Multifamily starts are slated to drop 13% in dollars and 15% in units to 410,000 (Dodge basis).
  • The dollar value of commercial building starts will retreat 6% in 2020. The steepest declines will occur in commercial warehouses and hotels, while the decline in office construction will be cushioned by high value data center construction. Retail activity will also fall in 2020, a continuation of a trend brought about by systemic changes in the industry.
  • In 2020, institutional construction starts will essentially remain even with the 2019 level as the influence of public dollars adds stability to the outlook. Education building and health facility starts should continue to see modest growth next year, offset by declines in recreation and transportation buildings.
  • The dollar value of manufacturing plant construction will slip 2% in 2020 following an estimated decline of 29% in 2019. Rising trade tensions has tilted this sector to the downside with recent data, both domestic and globally, suggesting the manufacturing sector is in contraction.
  • Public works construction starts will move 4% higher in 2020 with growth continuing across all project types. By and large, recent federal appropriations have kept funding for public works construction either steady or slightly higher — translating into continued growth in environmental and transportation infrastructure starts.
  • Electric utilities/gas plants will drop 27% in 2020 following growth of 83% in 2019 as several large LNG export facilities and new wind projects broke ground.

The 2020 Dodge Construction Outlook was presented at the 81st annual Outlook Executive Conference held by Dodge Data & Analytics at the Renaissance Chicago Downtown Hotel in Chicago, IL. Copies of the report with additional details by building sector can be ordered here or by calling (800) 591-4462.

 

2019 Election Results

  • Mississippi:  Republican Lt. Gov. Tate Reeves won Mississippi's governorship, defeating Democratic state Attorney General Jim Hood, 52.3% to 46.5%.
  • Kentucky:  The Kentucky Governor’s race has yet to be officially called. Democratic state Attorney General Andy Beshear has a lead of 5,150 votes over Republican Gov. Matt Bevin (49.2% to 48.8%) with 100% of the precincts reporting. Beshear declared victory in a speech to his supporters just after 10 P.M. last evening, but Bevin refused to concede; under state law, he can request a recanvassing of the results. 
  • Virginia Legislature:  Democrats took control of both chambers of the Virginia legislature, winning control of the state's government for the first time in a generation.

 

Are You Working To Engage Young People in the Trades?  Tell ASA About It!

We want to hear from you!  Tell us how you are working to engage young people and new employees in the trades.  Are you working with programs like Helmets to Hardhats?  Does your company have a partnership with a local community college, university or apprenticeship program??  How do you connect with your local community?

The American Subcontractors Association is currently working to gather all of your amazing ideas to be able to share with other ASA chapters around the country.  Let us know how you reach out to young, new talent, as well as your best practices in each initiative.

Have something exciting to share?  Email us your ideas at communications@asa-hq.com.  We can't wait to hear from you!

 

U.S. Department of Labor Issues Final Rule for Unemployment Insurance Drug Testing 

Last month, the U.S. Department of Labor published a final rule that provides greater clarity and flexibility to states as they identify the occupations for which they will conduct drug testing in the unemployment insurance (UI) program.  "The flexibility offered in the new rule respects state differences with regard to employment drug testing across our country," said Assistant Secretary for Employment and Training John Pallasch. "This rule lays out a standard that states can individually meet under the facts of their specific economies and practices."

The Rule recognizes states' diverse situations by permitting (but not requiring) them to test unemployment compensation (UC) applicants for whom suitable work is only available in an occupation where drug testing is regularly conducted. In addition to specific occupations identified in the regulation, states can identify additional occupations where employers conduct drug testing as a standard eligibility requirement for obtaining or maintaining employment in the identified occupation in their state. While the final rule also maintains that any occupation listed in the rescinded 2016 final rule is among those that are drug tested "regularly," it provides new flexibility to states to also identify such occupations. 

The Middle-Class Tax Relief and Job Creation Act of 2012 amended the Social Security Act to allow states to conduct drug testing for UC applicants for whom suitable work is only available in an occupation that regularly conducts drug testing. If a state chooses, it may deny UC to an applicant who tests positive for drug use under certain circumstances. Under the Middle-Class Tax Relief and Job Creation Act of 2012, the Secretary of Labor is required to issue regulations determining those occupations that regularly conduct drug testing. This new rule fulfills the Department's requirement to identify occupations that regularly conduct drug testing.

This rule-making follows a 2017 resolution of disapproval, passed by Congress and signed by the President, which revoked a previous rule aimed at imposing a one-size-fits-all standard on states identifying occupations for regular drug testing.

 

Government Shutdown?

President Trump left the door open for a government shutdown when the current continuing resolution (CR) expires in 17 days. First, he said “'no, no, no” when asked by a reported if he would shut down the government because he is being impeached. Then he said, “It depends on -- it depends on what the negotiation -- I wouldn't commit to anything. It depends on what the negotiation is.” 

 
 

Help Defend Our Future by Supporting the Subcontractors Legal Defense Fund

ASA underwrites the legal costs of filing "friend-of-the-court" briefs to inform the Court regarding the broader impact of relevant cases throughout the country. We have won dozens of these cases since 1997, vindicating subcontractor rights today and into the future!

Each year, courts across the country hand down hundreds of decisions on federal and state laws, as well as court-made or "case"law, that apply to subcontractors' businesses. Many of the decisions impacting subcontractors interpret the contract provisions of subcontract agreements—provisions like pay-if-paid, hold harmless, duty-to-defend, and no-damages-for-delay. Some of these decisions are precedent-setting and carry significance for subcontractors across state lines.

ASA's Subcontractors Legal Defense Fund supports ASA's critical legal activities in precedent-setting cases to protect the interests of all subcontractors. ASA taps the SLDF to fund amicus curiae, or  friend-of-the-court," briefs in appellate-level cases that would have a significant impact on subcontractor rights.


Support the SLDF Today!
 

 

Updated ASA Manuals Now Available

in the Info Hub!

Your ASA Info Hub is one of the MOST IMPORTANT benefits of your ASA Membership!  Within the Resources Section is a robust library of manuals, contract documents, newsletter archives, and much, much more.  

Recently new updated files have been added!  Such files include:

  • Lien and Bond Claims in the 50 States: 2020
  • Anti-Indemnity Statutes in the 50 States: 2020
  • Contingent Payment Clauses in the 50 States 2020

Log in to the Info Hub Today and get the most out of your ASA Membership!

 

House Advances Impeachment Proceedings

By a vote of 232-196, the House formalized the impeachment inquiry process with a package of rules that will govern open hearings on President Trump’s alleged wrongdoing.  The vote split almost completely along partisan lines, with only two Democrats Reps. Van Drew (NJ) and Peterson (MN), splitting with their colleagues to vote against the resolution.  Next week, the House Intelligence Committee will hold its first open hearings as part of the impeachment inquiry.  The Committee will hear from William Taylor and George Kent on November 13th and on November 15th, the Committee will hear from former U.S. ambassador to the Ukraine Marie Yovanovitch.

 

 

Upcoming Events

 

November 12, 2019


Understanding OSHA’s Multi-Employer Worksite Doctrine and the Unforeseeable Employee Misconduct Defense
by Philip J. Siegel, Hendrick, Phillips, Salzman & Siegel


December 10th, 2019

DOL Issues New Salary Threshold Requirements,
Effective January 2020

by Bill Ford, SESCO Management Consultants

January 7th, 2020


Payment Clauses: What to Watch For and How to Negotiate Them
by James Yand and Brian Esler

 

 

 

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