Construction Jobs Decreasing, Credit Market in Crisis

Construction employment in September lost 35,000 jobs, the Bureau of Labor Statistics reported, and decreasing employment is expected to get worse as the nation’s credit market is in crisis.

“State governments from California to Maine have been shut out of the bond market, while developers have had bank credit windows slammed shut on their fingers as they reached for their loans,” says Ken Simonson, chief economist of the Alexandria, Va.-based Associated General Contractors of America.

All types of construction shed workers in September, following an uptick in nonresidential hiring in August, Simonson says.

“Another ominous sign is that architectural and engineering services employment—a harbinger of demand for future construction—rose until recently but stalled this summer and fell in September,” Simonson says.

“Further, these numbers only reflect payrolls as of Sept. 12, before the takeover of Fannie Mae and Freddie Mac triggered the current freeze in bank lending,” Simonson says.

The bad news on employment comes on the heels of a report from the Census Bureau that private nonresidential construction spending fell by nearly 1% in both July and August.

“State and local construction spending was up, but I fear that will change as more states each week announce budget shortfalls. Highways and schools—60% of public construction spending—are in particular jeopardy, because of drops in fuel and property taxes,” he says.

The private categories with the best chance of growth in 2009—power plants, refineries, hospitals and higher education—have slowed and risk losing access to affordable loans.

“The 2009 construction employment and spending outlook will be very bleak unless credit markets revive promptly,” Simonson says.

Economist: Avoiding Recession ‘Diminishing’

Echoing the turmoil on Wall Street, the University of Illinois Flash Index was down significantly in September, the most recent reading.

The index is a barometer of the state’s economy each month, and a score of 100 is the dividing line between growth and retraction in the economy.

The index dropped to 101.1 in September, down considerably from the August reading of 102.3.

Yet at the same time, the economy in Illinois continues to grow at a slow pace because the score is above 100

“This might even be considered moderately good news given the turmoil in the national economy,” says economist J. Fred Giertz, who compiles the index each month for the university’s Institute of Government and Public Affairs.

However, the Illinois economy is feeling the effects of the mortgage crisis and subsequent credit crunch nationally. A collapse of the credit system would have dire consequences everywhere, Giertz says.

“With these intensifying financial problems and rising unemployment both nationally and in Illinois, the prospects for avoiding a recession are diminishing,” he says. “For the last 15 months, the real economy has not been severely damaged by the problems in the financial markets. This is not likely to continue, especially if an accord on the federal bailout program is not achieved.”

It is important for Congress to agree on some sort of government intervention to stabilize the nation’s financial system to protect pension funds, retirement accounts and businesses beyond the financial sector, Giertz says.

Despite the decline in the Flash Index, individual income tax receipts and sales tax receipts were up slightly in real terms in September over the same month last year. Corporate tax receipts were down.

Five-building Apartment Announced for Lisle

A 391-unit apartment, Arborteum Landmark, has been announced for southwest suburban Lisle.

The five-story building includes one-, two- and three-bedroom units. Individual apartments feature luxury kitchens and baths, 9-ft ceilings, over-sized closets and balconies, indoor parking and sustainable features.

Amenities include fitness center, club room with demonstration kitchen, Internet cafe, media screening room with stadium-style seating and a resident business center. Additionally, the development features a landscaped outdoor swimming pool with sundeck and fire pit.

“The DuPage apartment submarket is extremely constrained, particularly in the luxury apartment category,” says Matt Nix, senior real estate director for Opus North, the contractor. “In the past five years, only about 500 new rental units have been developed, and the median age of the existing supply is almost 30 years old. Furthermore, since 2001, more than 1,200 apartment units in Lisle alone have been lost to condominium conversions.”

The project is scheduled for delivery in late 2009.

Steel Fabricator Expands in Midwest

Phoenix-based steel fabricator and erector Schuff International Inc. has announced that its Midwest Division has opened an office in Chicago.

The announcement comes on the heels of Schuff being awarded a steel fabrication and erection contract to build Silver Cross Replacement Hospital in southwest suburban New Lenox. The six-story hospital will include over 4,000 tons of structural steel and will be fabricated in Schuff’s Kansas plant.

Boldt Among Safest Companies

The Appleton, Wis.-based Boldt Co. has been named one of “America’s Safest Companies” according to Occupational Hazards magazine.

Boldt was named with 18 other recipients. This is the sixth year of the national award and firms are selected based on safety history, participation in formalized safety programs and independent research into the safety philosophy and programs of the winners.

Construction is widely recognized as one of the country’s most dangerous professions. Despite that, Boldt has a lost-time injury rate of 1.1, below the industry average of 2.

As part of The Boldt Company’s national safety campaign, the firm tracks any injuries as well as “near misses.” According to safety experts, analyzing data from thousands of reports of near misses helps the firm improve jobsite conditions and safety programs. As safety conditions improve, customers reap a direct benefit.

Infrastructure Security Group Transfers to Military Engineers

The role of Secretariat for The Infrastructure Security Partnership has been transferred to the Society of American Military Engineers in Alexandria, Va. The American Society of Civil Engineers previously oversaw the organization.

TISP is a public-private partnership dedicated to improving the nation’s infrastructure resilience. Both groups agreed to the decision.

As Secretariat, SAME will provide logistical support to the organization, but TISP will retain its own identity, branding and mission.

SAME’s membership consists of more than 20,000 individuals in the uniformed services and the public and private sectors as engineers and related professionals.

National security and emergency response are the main goals of TISP. Part of moving TISP forward will include initiating a series of quarterly forums addressing issues related to the nation’s infrastructure and featuring panel discussions with a wide variety of leaders.