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CONSTRUCTION KNOWLEDGE BLOG

February 7, 2013

Beware Revision Clouds
Filed under: Ned Weirdness — Tags: — nedpelger

My buddy Kneal sent me this photo that made me laugh out loud.

Before you decide I just fell off the turnip truck, I know that no one really saw this revision cloud and hole sawed that opening. I’m sure some wise guy looked up and saw the cloud-like shape and had a great idea for PhotoShop.

The photo reminds me of a story from my friend Bob Navitiski. He was working as an inspecting engineer down at the Philadelphia Ship Yards in the 1970s. He warned the contractor that their was a buried water line in the vicinity of their digging. They spent a day or so carefully digging pits and trying to find this rogue line.

After he went back to the drawings, he realized that what looked like a line on the old prints was actually a fold in the paper. They had been searching for a fold.

Construction isn’t for the perfectionist or the faint of heart. We do our best and keep moving forward, otherwise this crazy business would drive us to drink.

CONSTRUCTION KNOWLEDGE BLOG

February 5, 2013

Construction Unemployment at 16.1% in January
Filed under: Industry outlook — Tags: — nedpelger

While I still believe the US construction market is coming back strong this year, the 16.1% unemployment rate for January reported in ENR is sobering. January 2012 had a rate of 17.7%, so we are seeing some improvement. In fact, this year’s rate is the best in the past five years.

Nevertheless, nobody is giving high fives about 16% unemployment. The national average is down to 7.9%. So construction continues to lag in this recovery.

Ken Simonson, Associated General Contractors of America chief economist, said, “We are likely to see continued strong growth in single- and multifamily homebuilding, moderate increases in private nonresidential construction and shrinking investment levels for the next several months.” He added, “Those trends, in turn, will lead to a steady increase in the number of construction jobs.”

I’m thinking this is one of those “Darkest before the dawn” moments. Here’s hoping.

CONSTRUCTION KNOWLEDGE BLOG

February 1, 2013

Friday Fun: Effective Counseling
Filed under: People Skills — Tags: — nedpelger

When I was writing Joyful Living: Build Yourself a Great Life! I worked with John and Sharon Charles as my editors. They also ran Abundant Living, a counseling ministry. They thought TBW and I would make great marriage counselors and I agreed.

Our first couple had a guy who worked as an electrician in construction, so I thought I’d have extra special insight. During our first meeting, they shared their problems (people sure do crazy-assed things), and we agreed on an action plan.

Two weeks later, they came back, complaining about a new set of problems and I asked them how they did on our action plan. I got blank stares. The next two week visit yielded the same response. Turns out I have little empathy if people don’t keep their commitments. Turns out, TBW and I were about the world’s worst counselors.

I love the video below. It shows my counseling philosophy. Invest the six minutes to watch this video and change your life!

httpv://www.youtube.com/watch?v=BYLMTvxOaeE

CONSTRUCTION KNOWLEDGE BLOG

January 31, 2013

Health Info Presented Beautifully
Filed under: People Skills — Tags: — nedpelger

I’m a big fan of life balance. Work and relationships go better if we take care of ourselves physically, mentally, emotionally and spiritually. On the physical side, staying in good physical condition makes a huge difference in life quality. So does avoiding sickness and disease.

Of course, it’s challenging to know what really works to try to stay healthy. Lex sent me this wonderful chart on health supplements with ratings from scientific studies and updated by approved visitor feedback. The chart shows which supplements have strong, conflicting or slight evidence for effectiveness. Click on it to make it readable.

I was pleased to see that the fish oil, green tea, dark chocolate and mulit-vitamin (including vitamin D) that I work into my diet seem to offer real health benefits. The Glucosamine that I take for joint lubrication doesn’t test well, but I knew that before and it really does seem to work for me.

As I get into my second year of healthier eating, I’m happy with the results. I feel better in almost every way. I also better enjoy eating, both the healthy food I eat at home and the not so healthy restaurant food I eat when we go out. Everything seems more like a treat. And I like treats.

CONSTRUCTION KNOWLEDGE BLOG

January 30, 2013

$1.1B Steel Plant for Arkansas
Filed under: Industry outlook — Tags: — nedpelger

ENR reported today that Big River Steel, LLC plans to build a $1.1B US plant that will convert scrap steel to new steel. Located on the Mississippi River, the plant will employ 525 workers. This is the type of exciting project I wrote about in my previous post.

As I stated there, the construction costs are high, but the number of workers isn’t, due to extensive automation. The developers pitch that their average salary for worker will be $75,000 per year. So I’m thinking there aren’t too many laborers on site.

ArkansasBusiness.com reports the following on the state funding offerings:

For the Big River project, the state plans to provide $125 million for start-up costs: a $50 million loan to the company, $50 million for site prep, $20 million for piling and $5 million for bond insurance.

Other state incentives include:

  • sales tax refunds on building materials, taxable machinery and equipment used in the project;
  • a 4 percent income tax credit based on new payroll jobs for five years;
  • $10 million from the Governor’s Quick Action Closing Fund;
  • $5 million from the Department of Workforce Services Trust Fund to be used for training;
  • an income tax credit for recycling equipment equal to 30 percent of eligible recycling costs that will include legislation that could extend the credit from three to 14 years;
  • and a sales tax exemption on utilities that will include legislation to fully exempt sales tax associated with the sale of natural gas and electricity.

Mississippi County is providing $12 million from a half-cent, industrial development sales tax to be used on infrastructure needs including gas and sewer lines and purchasing the land. The city of Osceola is pitching in $2 million.

It’s fascinating to see how these mega-projects come together. The public private partnerships really do seem to make sense in both directions.

CONSTRUCTION KNOWLEDGE BLOG

January 28, 2013

US Construction Boom: Starting Now
Filed under: Industry outlook — Tags: — nedpelger

For many in the US construction market, the last five years have been a depression. Most folks agree the market has improved the last year or two, but still has been super competitive. I see trends that indicate a reasonably long construction boom headed our way, particularly in industrial/commercial construction.

Let’s look at some history and define some terms to begin. The Economist special report on Outsourcing and Offshoring provides most of the background information for my opinions. Since the 1980s, American companies embraced Offshoring, defined as getting work done in a distant location, away from the headquarters and the customers. In Offshoring, the company still controlled the means of production, but they built plants in foreign lands and hired foreign workers.

Outsourcing, on the other hand, also was done on foreign lands with foreign workers, but the work was subcontracted. So a company that outsourced their manufacturing hired a foreign company to provide the products at a given price. Apple provides the most famous example, contracting with Foxconn to produce iPhones and iPads in China and throughout Asia.

Reshoring is the newest term, which involves production returning to the company’s home country and customers. Google, General Electric, Caterpillar and Ford all all bring some of their production back to America. Here are several reasons for reshoring:

  1. Foreign labor costs continue to substantially increase while US labor costs don’t
  2. Shipping cost and time lost seem to cost more than previously thought
  3. American future energy costs look promising with shale gas
  4. A real advantage has been found for keeping product design and manufacturing located near each other, as smart contractors understand, designers benefit interacting with production supervisors
  5. The increased automation of manufacturing (use of robots) further erodes the advantage of low cost foreign labor
  6. Quick product design changes can be made much easier with local manufacturing, which the future economy seems likely to demand at an increasing rate
  7. When products are outsourced, the intellectual property often slips away and foreign competitors copycat innovations
  8. When service sectors are outsourced (like information technology, human resources or customer service), the company tends to lose essential competitive advantages

So for all these reasons, many American firms are both reducing their outsourcing (having tasks again done by employees) and reshoring (bringing the work back home).

This reshoring phenomena may not greatly increase employment, as the new factories will be more automated and efficient. But these new factories have to be designed and built. That’s where the US construction boom happens.

Interestingly, Europe doesn’t seem likely to have this same type boom. They didn’t do nearly as much offshoring, partly because of the difficulty of terminating labor and partly due to family owned firms staying loyal to their locale. Their inflexible labor market and poor business conditions still doom Europe to times of poor construction opportunities.

America, on the other hand,  seems to be benefiting greatly from reshoring. The graphic below shows some examples with varied reasons.

Understand it’s not just manufacturing, though, the entire service sector also will be bringing jobs back home. The huge offshoring and outsourcing of service sector jobs to India seems over. The results, as anyone trouble shooting a computer can attest, haven’t been great and the costs have been high. Companies increasingly see the strategic advantage of employing their own local employees for IT, financial, customer services and other service sector work.

In fact, HFS Research in Boston published a survey that named America as the most desirable location for expanding IT and business service centers, beating India despite it’s lower costs. A McKinsey study found American IT workers cost less than in Brazil or Eastern Europe and only 24% more than in India.

A fascinating area in services innovation is described by Chetan Dube, a former math prof at NYU, ” The last decade was about replacing labour with cheaper labour. The coming decade will be about replacing cheaper labour with autonomics.” Mr Dube, owner of IPSoft,  has produced:

Eliza, a “virtual service-desk employee” that learns on the job and can reply to e-mail, answer phone calls and hold conversations, is being tested by several multinationals. At one American media giant she is answering 62,000 calls a month from the firm’s information-technology staff. She is able to solve two out of three of the problems without human help.

Again, this type of innovation requires construction be done near the company headquarters, not in some foreign land.

My conclusion to these trends? US commercial/industrial construction will have some strong growth for the next few years. Combine that with a rebounding housing market and the natural pent up construction demand that follows a recession and we have a bright construction forecast.

If you agree, now’s the time to expand. Get good people and develop new market niches. Or jump out there and start something. You only live once, but once should be enough if you make decent decisions.

CONSTRUCTION KNOWLEDGE BLOG

January 25, 2013

Wise Guy Friday
Filed under: Ned Weirdness — Tags: — nedpelger

One of the great joys of working in construction is the jobsite humor. Most of us that chose this industry are a little off and our sense of humor tends that way as well. Lots of quick witted guys and a high threshold for what’s considered offensive combines for lots of laughs on the jobsite.

So on the occasional Friday, I will post some Wise Guy thoughts that I’ve encountered that amuse me. John Wilkes, who lived in England in the 1700s, was one of the great smartassess of all time.

For instance, when told by a constituent that he would rather vote for the devil, Wilkes responded: “Naturally.” He then added: “And if your friend decides against standing, can I count on your vote?”

John Montagu, 4th Earl of Sandwich, supposedly said to Wilkes, “Sir, I do not know whether you will die on the gallows or of the pox.”

To which Wilkes replied, “That depends, my lord, on whether I embrace your lordship’s principles or your mistress.”

I came across the chart below that also made me laugh, so thought I’d include it.

Hope you have a great weekend.

CONSTRUCTION KNOWLEDGE BLOG

January 24, 2013

Construction Estimator: A Job with a Future
Filed under: Industry outlook — Tags: — nedpelger

In our current economy, few jobs are expected to experience faster-than-average growth. But, as Software Advice–a software research company based out of Austin, Texas–recently reported, that’s just what the Bureau of Labor statistics is expecting to happen for the role of construction estimator. Between 2010 and 2020, employment for cost estimators is projected to grow from 185,000 to 253,000 jobs–a 36 percent gain.

While construction estimating is hidden from the limelight, it’s one of the most important roles on any construction site, especially given the unstable economy and rapidly changing material prices which are coupled with shorter bidding windows. A quality cost estimator is critical to the success of any construction firm as the accuracy and timeliness of a bid is a determining key factor in which company wins the bid.

For people that are committed to the role, jobs should be plentiful. And starting in the role of cost estimator can be a great way to climb through the ranks. First, however, you need the skills to get the job:

  • Strong math skills, particularly in disciplines like trigonometry.
  • Attention to detail, while being able to see the big picture.
  • Intense competitiveness and desire to continually hone your skills.
  • Comfort with technologies like 3-D modeling and estimating software.

You can also get more advice from Tom Zind, contributor to the Software Advice website, by reading his article on progressing in the construction estimating career at: Skills You Need to Become a Construction Estimator.

Several friends have made nice careers as construction estimators. In good times and bad, they’ve had good jobs with good pay. If you’re considering the field, talk to some current estimators and get some real feedback.

CONSTRUCTION KNOWLEDGE BLOG

January 22, 2013

A Killer Interview Question
Filed under: People Skills — Tags: — nedpelger

Most of us do lots of interviews, even if we don’t think about them that way. We meet with industry associates and try to relate and learn from them. If we’re managers, we interview for consultants, subcontractors and employees. Even casual random conversations have elements of an interview.

So what’s the killer interview question proposed by Publicity Hound?

“What single project or task would you consider your most significant accomplishment in your career so far?”

Let’s begin by you considering and answering that question? As I thought about it, my mind went to writing Joyful Living, but that didn’t seem to be it. Then I thought about building the Cloister Car Wash buildings, which were great fun and technical challenges.

But then I thought about the LCBC Church main auditorium in Manheim, PA.

httpv://www.youtube.com/watch?v=pNejzgRp0tI

I think that would be my most satisfying and significant project thus far. The fact that I get to go and worship in the building each week adds to that feeling.

So what project or task do you consider your most significant in your career thus far? Answer that for yourself and get in the habit of asking others. Then listen and learn.

CONSTRUCTION KNOWLEDGE BLOG

January 21, 2013

You Got 35 Years to Kill?
Filed under: Cool Projects — Tags: — nedpelger

Sculptor Scott Weaver spent 35 years building a kinetic San Francisco model with 100,000 toothpicks. He gives a guided city tour in the video below, as the ping pong balls roll. Watch it and be amazed.

httpv://www.youtube.com/watch?v=4QLgEcTq6Pg

Do you have a hobby? Does it involve your construction skills (like me building a kid’s playground in the woods behind my house) or something like hunting or snowmobiling? We work hard in this crazy construction industry, I hope you’re finding some ways to just relax. I especially recommend hobbies that exercise your creativity.

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