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Contractor Survey on 2013

Posted by nahetsblog on March 22, 2013

Construction News Pro survey results of contractors across US:

"How do you think the 2013 construction economy will compare to 2012?"


Here’s what you said:

  • 53% Better than 2012
  • 34% The same as 2012
  • 14% Worse than 2012

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March 17, 2013

Posted by nahetsblog on March 17, 2013

New Equipment Watch Quarterly Report Offers Data on Heavy Equipment Auction Market Trend

EquipmentWatch, a leading construction research company and database information products provider, unveiled a quarterly benchmark report “Heavy Equipment Auction Market Trending.” The report, targeted to auctioneers, original equipment manufacturers, statisticians, equipment analysts and economists, offers analysis of auction activity by price, region, manufacturer and equipment type.

The first report covers Sept. 1 through Nov. 30, 2012. Key report findings include:

  • Total sales for the heavy equipment auction market increased from the previous quarter, however the sales numbers represented a downward trend compared to the previous year;
  • Western Canada and the Southeast United States represented the largest regions by volume of equipment sold during this period. The largest increase year over year was in Central Canada;
  • Crawler-mounted hydraulic excavators topped the list of heavy construction equipment types sold at auction. The average age of all construction equipment recorded was about 12 years;
  • Caterpillar equipment led all manufacturers in terms of volume sold, followed by Deere, Komatsu, Volvo and Bobcat.

The report is focused on data analyzed in context using data drawn from EquipmentWatch’s “The Last Bid” database of more than 1.3 million records. “The Last Bid” is an authoritative guide to current auction values for used heavy equipment and trucks. Regions were selected based upon the Bureau of Economic Analysis standards and the 4-region Canadian model.

“For 15 years, our data has provided key metrics to the heavy equipment auction marketplace,” said Garrett Schemmel, director, brand management, EquipmentWatch. “This new series of reports offers a comprehensive view of the industry, and also serves as a leading indicator of market activity. As the first and only company to offer verified analyzed intelligence, we recognize the value of this data to the industry to deliver unprecedented insights to inform buying decisions.”

To access the new equipment auction trend report, go to: brian.deweyor (770) 618-0201.

EquipmentWatch, owned by Penton Media, serves more than 15,000 professional, high-volume users of construction and lift-truck data. Its online and print products are used in decisions surrounding the purchase, valuation, operation and disposal of equipment. For nearly 50 years, EquipmentWatch has served contractors, equipment manufacturers, dealers, lenders and insurers and government agencies involved in large infrastructure construction.

Penton’s Equipment Watch Introduces A New Industry Benchmark: "Heavy Equipment Auction Market" Quarterly Trending Report

First in a Series of Equipment Intelligence Reports to Inform Equipment Buying Decisions

By Penton

NEW YORK, March 14, 2013 — /PRNewswire/ — A new quarterly benchmark report for the construction equipment industry, "Heavy Equipment Auction Market Trending," was unveiled today by Penton’s EquipmentWatch, the world’s leader in heavy construction research, and the leading provider of database information products for the construction equipment industry.

Targeted to auctioneers, original equipment manufacturers, statisticians, equipment analysts and economists, the report is the first in a new series of verified industry intelligence studies designed to establish more robust benchmarks for the equipment auction marketplace.

"Heavy Equipment Auction Market Trending" is the latest Penton initiative to innovate data and workflow tools for its user markets. Other recently launched workflow tools include Penton’s Source ESB electronic parts digital sourcebook and Trusts & Estates Plus, an iPad app featuring exclusive content from wealthmanagement.com.

"For 15 years our data has provided key metrics to the heavy equipment auction marketplace," said Garrett Schemmel,Director, Brand Management,EquipmentWatch. "This new series of reports offers a comprehensive view of the industry, and also serves as a leading indicator of market activity. As the first and only company to offer verified analyzed intelligence we recognize the value of this data to the industry to deliver unprecedented insights to inform buying decisions."

The "Heavy Equipment Auction Market Trending" report analyzes activity by price, region, manufacturer and equipment type, thereby providing a quick snapshot of industry trending by all major metrics. Key report findings include:

  • Total sales for the heavy equipment auction market increased from the previous quarter, however represented a downward trend when compared year over year.
  • Western Canada and the Southeast United States represented the largest regions by volume of equipment sold during Fall 2012. The largest increase year over year was seen in Central Canada.
  • Crawler mounted hydraulic excavators topped the list of heavy construction equipment types sold at auction. The average age of all construction equipment recorded was around 12 years.
  • Caterpillar equipment led all manufacturers in terms of volume sold, followed by Deere, Komatsu, Volvo and Bobcat.

The report is focused on data collected between September 1, 2012 and November 30, 2012, and analyzed in context using data drawn from EquipmentWatch’s "The Last Bid"™ database of 1.3+ million records. "The Last Bid" is an authoritative guide to current auction values for used heavy equipment and trucks. Regions were selected based upon the Bureau of Economic Analysis standards and the 4-Region Canadian model.

Industry professionals interested in accessing the new equipment auction trend report will find it here: brian.dewey or 770.618.0201.

About EquipmentWatch EquipmentWatch is the trusted source for heavy equipment and material handling equipment data, produces the leading database information products for the construction equipment industry and is the world leader in heavy construction research. EquipmentWatch serves more than 15,000 professional, high-volume users of construction and lift-truck data. Our online and print products are valuable tools in decisions surrounding the purchase, valuation, operation, and disposal of equipment.

For nearly 50 years, EquipmentWatch has served contractors, equipment manufacturers, dealers, lenders and insurers, and government agencies involved in large infrastructure construction.

About Penton For millions of business owners and decision-makers, Penton makes the difference every day. We engageour professional users by providing actionable ideas and insights, data and workflow tools, community and networking, both in person and virtually, all with deep relevance to their specific industries. We then activatethis engagement by connecting users with tens of thousands of targeted providers of products and services to help drive business growth. Learn more about our company at www.penton.com.

Penton is a privately held company owned by MidOcean Partners and U.S. Equity Partners II, an investment fund sponsored by Wasserstein & Co., LP.

Read more here: http://www.sacbee.com/2013/03/14/5262409/pentons-equipmentwatch-introduces.html#storylink=cpy

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March 13,2013

Posted by nahetsblog on March 13, 2013

January Nonresidential Construction Materials Project Prices Turn Up

03/13/2013 by Bernard M. Markstein

Prices for inputs used in nonresidential construction turned up after three months of decline. Prices for cement, energy, energy-related products, and wood products were among the main drivers sending the index higher. Higher energy prices are now working their way through various product prices. A slowdown in federal construction projects due to budget cuts, which include the current sequestration, and a general slowdown in nonresidential construction should put some downward pressure on building materials prices. At the same time, increased residential construction activity is providing upward pressure on prices. In general, over the course of this year, expect prices to rise roughly in line with or slightly faster than overall inflation. Better than expected growth would result in building materials prices increasing at a faster rate.

Construction Materials Inflation
The Producer Price Index (PPI) for materials and components used in construction rose 0.5% on a seasonally adjusted (SA) basis in January after rising 0.2% in December according the Bureau of Labor Statistics (BLS) and was the sixth consecutive monthly increase. The index was up 2.7% on a not seasonally adjusted (NSA) year-over-year basis and was up 9.3% since January 2010. Meanwhile, prices for raw materials used in construction or to produce products used in construction rose 0.1% after increasing 0.2% in December. The index was up 2.8% from January 2012 and was up 6.9% from January 2010.

An index that measures inputs used in nonresidential construction (excluding capital equipment) advanced 0.6% (NSA) in January after declining 0.3% in December. January’s increase ended a string of three consecutive monthly declines. The index was up 0.8% from January 2012.

The BLS began reporting a new index that captures the change in the cost of constructing health care buildings. The index includes material costs, labor and equipment costs for installation, as well as including a margin for overhead and profit. Since this is a new index, only limited historical data are available at this point. Because of this, seasonally adjusted numbers are not available. The new index has been added to the table below.

US Construction-Related Price Indexes
Percent Change
from Previous Month

NSA data unless
otherwise indicated
3-Month Moving Average
from Previous Month

NSA data unless
otherwise indicated
NSA data
3 Years Ago
NSA data
Jan-13 Dec-12 Nov-12 Jan-13 Dec-12 Nov-12 Jan-13 Dec-12 Nov-12 Jan-13
Composite Indexes (Exclude capital equipment)
Construction Materials*
(Unprocessed materials)
0.1 0.2 0.0 0.1 0.2 0.0 2.8 2.7 2.5 6.9
Materials and Components for Construction*
(Processed goods)
0.5 0.2 0.1 0.3 0.2 0.2 2.7 2.7 2.4 9.3
Inputs to Construction
(Residential and Nonresidential)
(Includes inputs to maintenance and repair)
0.7 -0.1 -1.1 -0.2 -0.5 -0.2 1.3 1.3 1.0 11.4
Inputs to New Construction 0.7 -0.1 -1.0 -0.1 -0.5 -0.2 1.5 1.5 1.2 11.5
Inputs to Residential Construction 0.7 0.1 -0.7 0.0 -0.3 -0.2 2.1 2.0 1.7 11.4
Inputs to Nonresidential Construction 0.6 -0.3 -1.3 -0.3 -0.7 -0.2 0.8 0.8 0.6 NA
Inputs to Commercial Construction 0.6 -0.1 -0.7 -0.1 -0.4 -0.1 1.3 1.1 0.9 NA
Inputs to Industrial Construction 0.4 -0.2 -1.0 -0.3 -0.5 -0.2 0.6 0.8 0.7 NA
Inputs to Heavy Construction 0.6 -0.3 -1.6 -0.4 -0.8 -0.3 0.6 0.7 0.5 NA
Inputs to Maintenance and Repair 0.7 -0.3 -1.2 -0.3 -0.6 -0.2 0.4 0.0 -0.3 11.1
Inputs to Nonresidential Maintenance
and Repair
0.7 -0.3 -1.3 -0.3 -0.6 -0.2 0.2 -0.2 -0.7 10.8
Inputs to Res Maintenance and Repair 0.7 0.0 -1.1 -0.2 -0.6 -0.2 1.6 1.7 1.4 12.2
(Indexes include installation and overhead)
New Warehouse Building Construction 1.0 0.0 0.0 0.3 0.1 0.1 2.9 2.6 2.5 8.0
New School Building Construction 0.3 0.0 -0.3 0.0 0.0 0.0 0.9 1.1 1.2 6.9
New Office Construction 0.4 0.0 0.0 0.1 0.1 0.1 0.9 1.3 1.3 5.3
New Industrial Building Construction 0.5 0.0 0.1 0.2 0.2 0.1 1.3 1.4 1.2 5.5
New Health Care Building Construction 0.6 -0.1 -0.1 0.1 0.0 0.0 NA NA NA NA
Other Related Indexes
PPI Finished Goods* 0.2 -0.3 -0.4 -0.2 -0.3 0.2 1.4 1.3 1.5 9.4
PPI Finished Goods less food and energy* 0.2 0.1 0.2 0.2 0.1 0.1 1.8 2.0 2.2 6.6
CPI Urban Consumer* 0.0 0.0 -0.2 -0.1 0.0 0.2 1.6 1.7 1.8 6.3
CPI Urban Consumer less food and energy* 0.3 0.1 0.1 0.2 0.1 0.1 1.9 1.9 1.9 5.2
Production Index: Construction Supplies* -0.1 1.0 2.5 1.1 1.1 0.9 2.0 2.7 3.5 19.4
Retail Sales: Building & Equipment Supplies* 0.3 0.3 1.2 0.6 0.0 0.8 5.7 -0.2 5.4 25.9
*Seasonally-adjusted data for percent changes for monthly and 3-month moving average data
NSA = Not seasonally adjusted, NA = Not Available
Source: Producer Price Index (PPI) – Bureau of Labor Statistics; Production Index – Federal Reserve Board; Retail Sales – Census Bureau

Construction machinery prices were up 0.3% (SA) in January, the same as December’s increase. Construction machinery rental rates also rose 0.3% (NSA) following a jump of 1.1% in December. Despite a recent shift in the preference away from purchasing construction equipment to renting equipment, on a year-over-year NSA basis, rental rates have increased at a slower rate than the rate of increase for purchase prices — 1.5% versus 4.0%. Meanwhile, rental rates were up 4.5% since January 2010 while purchase prices were up 10.0%. Nonetheless, we still expect rental rate inflation to generally exceed equipment purchase price inflation over the course of this year.

To increase coverage of items commonly used in commercial construction projects we have added coverage of the PPI for “Air-conditioning, Refrigeration; and Forced Air Heating Equipment Manufacturing” to the table below. This index reflects changes in prices that are charged by producers, or to look at it another way, what most buyers (in this case, builders) pay.

US Construction-Related Price Indexes
Percent Change
from Previous Month

NSA data unless
otherwise indicated
3-Month Moving Average
from Previous Month

NSA data unless
otherwise indicated
NSA data
3 Years Ago
NSA data
Jan-13 Dec-12 Nov-12 Jan-13 Dec-12 Nov-12 Jan-13 Dec-12 Nov-12 Jan-13
Assembled Equipment
Hand and Edge tools 0.6 -0.3 0.0 0.1 0.0 0.6 2.7 2.8 3.2 3.8
Power Hand Tools 0.6 0.2 0.2 0.3 0.1 0.1 1.5 1.3 1.4 3.5
Appliances* -0.6 0.6 -0.9 -0.3 0.3 0.1 2.2 4.0 3.7 6.6
Furnaces -2.0 1.0 -0.2 -0.4 0.5 0.1 -0.6 2.1 0.5 4.3
AC; Refrigeration; and Forced Air Heating Equip. Mfg. -1.2 1.3 0.8 0.3 0.6 0.1 1.3 2.2 0.8 6.5
Construction Machinery* 0.3 0.3 0.6 0.4 0.5 0.3 4.0 3.8 4.1 10.0
Construction Machinery Rental (incl. oilfield equip.) 0.3 1.1 1.0 0.8 0.4 0.4 1.5 0.1 0.6 4.5
Construction equipment rental and leasing 0.0 0.7 1.4 0.7 0.7 0.9 0.6 -0.4 1.8 4.4
Oilfield and well drilling equipment rental
and leasing
1.7 3.5 0.0 1.7 0.0 -1.1 5.7 4.0 -0.4 8.4
Trucks over 14,000 Ibs. GVW 0.6 0.3 0.5 0.5 0.1 0.0 2.1 2.2 1.8 8.0
Metal Doors, Sash and Trim 0.1 -0.1 0.0 0.0 0.0 0.0 1.8 1.8 2.0 9.7
*Seasonally-adjusted data for percent changes for monthly and 3-month moving average data
NSA = Not seasonally adjusted, NA = Not Available
Source: Producer Price Index (PPI) – Bureau of Labor Statistics

Cement and Concrete
Cement prices shot up 1.8% (NSA) in January, their largest monthly increase in almost four years, after no change in December. Prices were up 3.6% from January 2012 but were down 2.2% from January 2010.

Prestressed concrete products prices rose a more modest 0.6% after edging up 0.1% in December. On a year-over-year basis, prices were up 0.6%, and they were up 2.5% from January 2010. Precast concrete products prices rose 0.3% in January after surging 1.6% in December. Prices were up 2.5% from January 2012 and were up 7.2% from January 2010.

US Construction-Related Price Indexes
Percent Change
from Previous Month

NSA data unless
otherwise indicated
3-Month Moving Average
from Previous Month

NSA data unless
otherwise indicated
NSA data
3 Years Ago
NSA data
Jan-13 Dec-12 Nov-12 Jan-13 Dec-12 Nov-12 Jan-13 Dec-12 Nov-12 Jan-13
Construction Commodities
Dimension Stone 1.9 0.0 0.1 0.7 0.0 0.1 2.8 1.3 1.6 3.2
Cement 1.8 0.0 0.2 0.7 0.0 0.0 3.6 3.4 3.6 -2.2
Construction Sand, Gravel & Crushed Stone* 0.2 0.1 0.0 0.1 0.2 0.0 2.9 2.3 2.1 6.2
Softwood Plywood 4.3 1.2 -3.6 0.6 -1.2 -0.4 20.9 19.6 21.0 36.2
Hardwood Lumber 1.9 0.2 0.2 0.8 0.5 0.4 4.0 1.6 1.7 8.2
Softwood Lumber* 6.7 2.1 5.1 4.6 1.7 1.2 24.8 17.3 13.7 30.5
Other Commodities
Industrial Natural Gas* 0.0 1.4 0.9 0.7 1.3 0.9 -1.6 -5.0 -8.2 -18.1
Plastic Resins & Materials 1.6 -0.7 -0.6 0.1 0.5 0.3 3.0 3.5 2.3 22.5
Insulation Materials 2.0 0.1 -0.5 0.5 -0.4 -0.7 5.4 5.1 5.1 17.9
Iron & Steel Scrap 0.3 0.9 11.9 4.1 0.0 -0.8 -19.9 -15.5 -11.0 9.6
Iron Ore -3.6 0.0 0.1 -1.2 1.7 0.3 -8.9 -3.8 1.2 23.7
Copper Ores 1.9 -2.6 -4.4 -1.8 -2.3 0.9 -2.0 1.6 1.3 11.0
Copper Base Scrap* -0.4 2.0 -0.6 0.3 1.1 1.9 1.2 0.9 -0.7 14.5
*Seasonally-adjusted data for percent changes for monthly and 3-month moving average data
NSA = Not seasonally adjusted, NA = Not Available
Source: Producer Price Index (PPI) – Bureau of Labor Statistics

Energy and Related Products
Diesel fuel prices continued their recent upward movement, increasing 0.9% (SA) in January after soaring 2.6% in December. Despite the recent surge, diesel prices were down 1.0% (NSA) from January 2012 but were up 39.0% from January 2010.

Industrial natural gas prices were flat in January, a bit of a reprieve following five months of increases, including December’s 1.4% (SA) jump. Still, industrial natural gas prices were down 1.6% from January 2012 and were down 18.1% from January 2010. Natural gas remains a considerable bargain relative to oil.

Plastic resins and materials prices also shot up, increasing 1.6% (NSA) in January after decreasing 0.7% in December. Prices were 3.0% higher than in January 2012 and were 22.5% higher than in January 2010.

Surprisingly, asphalt prices declined dramatically for the third consecutive month and the seventh month out of the last eight months, plummeting 6.0% (NSA) in January after falling 2.0% in December. Prices were 10.6% lower than in January 2012 but were 16.2% higher than in January 2010. However, asphalt roofing prices rose 0.9% in January following a 1.1% drop in December. Prices were up 0.7% from January 2012 and were up 7.5% from January 2010.

Plastics pipe prices moved 1.9% (NSA) higher in January after no change in December. They were up 10.2% from January 2012 and were up 27.3% from January 2010. Plastics plumbing fixtures prices however, tumbled 2.7% after advancing 0.3% in December. That left prices down 1.2% from January 2012, but up 3.8% from January 2010.

US Construction-Related Price Indexes
Percent Change
from Previous Month

NSA data unless
otherwise indicated
3-Month Moving Average
from Previous Month

NSA data unless
otherwise indicated
NSA data
3 Years Ago
NSA data
Jan-13 Dec-12 Nov-12 Jan-13 Dec-12 Nov-12 Jan-13 Dec-12 Nov-12 Jan-13
Manufactured Materials
Gypsum Products 11.8 -0.3 0.4 4.0 -0.2 -0.5 20.4 14.0 14.9 30.1
Petroleum refineries 1.0 -2.4 -8.3 -3.4 -4.5 -1.9 -4.7 -3.2 -3.8 29.5
Diesel Fuel* 0.9 2.6 -9.1 -2.1 -1.5 -0.3 -1.0 1.8 -4.0 39.0
Asphalt -6.0 -2.0 -7.5 -5.2 -2.2 -2.4 -10.6 -2.5 3.2 16.2
Asphalt paving mixture & block mfg. 0.5 -0.2 0.0 0.1 -0.1 -0.3 3.2 4.0 4.5 16.5
Asphalt shingle and coating materials mfg. 0.4 -0.9 -0.5 -0.3 -0.8 0.1 0.3 -0.2 1.6 10.1
Asphalt Roofing 0.9 -1.1 -0.5 -0.2 -1.1 0.0 0.7 -0.6 1.4 7.5
Paint 1.1 -0.4 0.0 0.2 -0.1 0.0 0.5 10.1 10.5 15.7
Plastic Construction Products 0.2 0.2 0.4 0.3 0.3 0.3 4.0 4.7 4.5 11.5
Plastics Pipe 1.9 0.0 0.6 0.8 1.0 1.3 10.2 12.4 11.8 27.3
Plumbing Fixtures -2.7 0.3 0.1 -0.8 0.1 0.1 -1.2 2.1 1.7 3.8
Vitreous Plumbing Fixtures 0.6 0.6 -1.1 0.0 0.3 0.1 0.9 1.7 1.1 5.9
Ceramic Tile -0.9 0.4 -0.5 -0.3 0.6 0.0 -0.5 0.7 0.4 -1.3
Flat Glass 0.4 -0.7 0.3 0.0 -0.1 0.3 2.2 1.0 2.3 2.0
Steel Mill Products -0.1 0.9 -1.3 -0.2 -0.8 -0.6 -8.3 -7.9 -9.1 12.9
Steel Pipe and Tube* -2.5 0.7 -0.4 -0.8 -0.2 -0.3 -8.8 -6.1 -6.7 20.1
Hot rolled bars, plates & structural shapes 0.5 1.6 -2.0 0.0 -0.7 -0.6 -9.8 -9.6 -12.0 15.0
Extruded Aluminum rod, bar and other shapes 3.4 -0.5 -0.7 0.7 0.5 0.4 0.7 -3.4 -5.1 5.6
Architectural Metalwork 0.3 -0.1 0.2 0.1 0.0 -0.1 0.9 0.5 0.6 7.3
Metal Plumbing Fixtures* 0.0 0.2 0.0 0.0 0.2 0.3 1.3 1.7 1.6 5.6
Builders’ Hardware -0.5 -0.6 0.4 -0.2 -0.1 0.2 -0.2 0.5 1.2 7.7
Sheet Metal Products -1.5 0.0 0.0 -0.5 0.0 0.0 -2.1 -0.5 -1.4 5.6
Copper and Copper Products 1.2 1.3 -3.6 -0.4 -0.3 0.7 0.6 0.2 -1.7 5.7
Copper and Brass Mill Shapes 0.6 1.5 -3.3 -0.4 0.2 0.9 2.9 1.0 -0.9 -2.1
Nonferrous Pipe and Tube 2.6 -0.8 -1.5 0.1 0.2 2.4 3.5 -1.7 -1.1 2.0
Building Brick -1.3 0.1 -0.2 -0.5 0.0 -0.1 -1.8 -2.9 -3.4 -7.8
Ready Mix Concrete* 0.3 0.2 0.0 0.2 0.2 0.1 2.3 2.3 2.4 2.3
Concrete Block & Brick -0.2 0.6 -0.3 0.0 0.2 0.0 0.8 1.5 0.8 1.5
Prestressed Concrete 0.6 0.1 -0.1 0.2 0.0 -0.3 0.6 -0.2 -0.2 2.5
Precast Concrete Products 0.3 1.6 -0.2 0.5 0.4 -0.2 2.5 2.6 1.3 7.2
Concrete Pipe 0.7 0.6 -0.7 0.2 0.7 0.5 5.0 4.3 3.2 6.4
Engineered Wood Products 2.1 2.3 1.2 1.9 1.3 1.4 15.1 12.5 9.7 20.5
Wood Kitchen Cabinet and Countertop Mfg. 1.0 0.3 -0.1 0.4 0.2 0.1 2.9 2.0 1.7 5.9
Millwork (window, door, cabinet)* 1.1 0.2 0.0 0.4 0.1 0.1 2.5 1.5 1.2 7.1
Wood Window and Door Mfg. 1.4 0.3 -0.1 0.5 0.1 -0.1 1.8 0.5 0.3 9.8
Metal Window and Door Mfg. 0.1 -0.1 0.0 0.0 0.0 0.0 1.9 1.9 2.1 9.2
Laminated Plastics 0.3 -0.1 -0.1 0.0 -0.1 0.0 0.9 0.6 0.7 6.3
Nonresidential Electric Lighting Fixture Mfg. -0.1 0.4 -0.2 0.1 0.1 0.0 0.4 0.4 0.1 6.2
*Seasonally-adjusted data for percent changes for monthly and 3-month moving average data
NSA = Not seasonally adjusted, NA = Not Available
Source: Producer Price Index (PPI) – Bureau of Labor Statistics

Copper and Copper Products
Copper ores prices jumped 1.9% (NSA) in January following two months of sharp declines, including a 2.6% plunge in December. Prices were 2.0% lower than in January 2012, but were 11.0% higher than in January 2010.

Copper base scrap prices fell 0.4% (SA) in January after surging 2.0% in December. Prices were 1.2% higher than in January 2012 and were 14.5% higher than in January 2010.

Prices for copper and copper products rose 1.2% (NSA) in January following a 1.3% increase in December. Prices were up 0.6% from January 2012 and were up 5.7% from January 2010.

Copper and brass mill shapes prices advanced 0.6% in January after increasing 1.5% in December. Prices were up 2.9% from January 2012, but were down 2.1% from January 2010.

Other Metals
Steel mill products prices slipped 0.1% (NSA) in January after increasing 0.9% in December. Prices were down 8.3% from January 2012, but were up 12.9% from January 2010. Hot rolled bars, plates, and structural shapes prices rose 0.5% in January after jumping 1.6% in December. Nonetheless, prices were 9.8% lower than in January 2012, but were 15.0% higher than in January 2010.

Extruded aluminum rod, bar, and other shapes prices surged 3.4% (NSA) in January after declining 0.5% in December. Prices were up 0.7% from January 2012 and were up 5.6% from January 2010.

Series Changes
The index for “Wood Kitchen Cabinets” has been discontinued by the BLS. We have replaced it with the index for “Wood Kitchen Cabinet and Countertop Manufacturing.” We also added three more price indexes that are likely to be of interest to commercial builders, “Wood Window and Door Manufacturing,” “Metal Window and Door Manufacturing,” and “Nonresidential Electric Lighting Fixture Manufacturing.” The indexes appear in the table above.

Softwood Lumber and Gypsum
Demand for softwood lumber and gypsum products is largely determined by single-family housing construction activity. The improving single-family housing market has been pushing demand for these materials higher.

The PPI for softwood lumber rocketed up 6.7% (SA) in January after increasing a strong 2.1% in December and a robust 5.1% in November. Prices were 24.8% higher than in January 2012 and were 30.5% higher than in January 2010.

Canadian softwood lumber exports to the U.S. are regulated by the Softwood Lumber Agreement (SLA). Each month the level of exports permitted and any relevant export fees are determined by where the average price of softwood lumber over a specified four week period prior to that month falls within a four tier regime. The categories, from most restrictive to least restrictive and the related prices determining which category is in force for the month, are as follows.

  • The first category is for an average price of $315 per thousand board feet or lower
  • The second category is for an average price of $316 to $335
  • The third category is for an average price of $336 to $355
  • The fourth category is for on an average price of $356 or higher and eliminates all restrictions and fees on Canadian softwood lumber exports to the United States

There has been significant variation in the price of softwood lumber over the past several months. Increased single-family construction activity has been sufficient to drive prices for softwood lumber high enough to result in tier 4 — no restrictions on Canadian exports — for the first three months of the year. Reed Construction Data estimates that average prices that determine the relevant category for April have been high enough to ensure that no export restrictions will be in force for that month. The table below summarizes recent average prices and the resulting tier (category).

Average Prices to Determine
SLA Canadian Softwood Export Restrictions
2012 2013
November December January February March April
Average Price $326 $334 $357 $385 $395 $416*
Tier 2 2 4 4 4 4*
Source: Foreign Affairs and International Trade Canada

*Reed Construction Data estimate

In 2011, six gypsum producers sent letters indicating they would raise prices 35% in January 2012. But the December 2012 PPI was up less than half that amount (14.0%) from December 2011.

Although only partially successful with their 2012 price increase, last year several gypsum producers announced price increases of 25% to 30% effective at the beginning of this year. The early indications are that this time gypsum producers are recording some success. January gypsum prices jumped 11.8% and were 20.4% higher than in January 2012. Since January 2012 they were up 30.1%.

Outlook for Construction Materials Prices
The U.S. economy flattened in the fourth quarter of last year due to a few special circumstances, such as a sharp reduction in defense spending, that are not likely to be repeated. There are already indications that the first quarter of this year will report improved growth.

Meanwhile, the politicians are wrangling over how to resolve various budget issues even as sequestration began this month. It is estimated that if sequestration is left in place, it will lower real (inflation-adjusted) gross domestic product (GDP) growth by 0.5%, not healthy, but not a disaster either. Bigger threats are not enacting a federal government budget before the end of this month and expiration of the temporary federal debt ceiling in mid-May. Although nothing is certain in this political climate, it is likely that something will be done about both, if only extending the current deadlines. Recent reports that discussions are underway regarding these issues raise hope that a longer-term, more reasonable solution will be reached.

Europe has been muddling through its problems, although many European countries have fallen into recession. Slower growth in Europe is a drag on U.S. exports of construction machinery and products to Europe.

Despite these and other economic challenges, the Reed Construction Data forecast is that recession is avoided, the economy continues to grow at a moderate pace, and nonresidential construction activity will advance modestly this year and pick up speed next year. There will be moderate upward pressure on construction materials prices as some of the impediments to growth are removed or reduced. The outlook is for 2013 building materials prices inflation to proceed at roughly the same pace or a little faster than overall inflation.

If the U.S. economy outpaces our forecast of real (inflation-adjusted) gross domestic product (GDP) growth of 2.5% for the year, there will be greater construction activity and faster materials price inflation. Faster growth in the rest of the world would also mean higher construction materials prices. Significantly higher energy prices for a sustained period would contribute to a faster rate of increase in building materials prices, but would also be a drag on economic growth, eventually hurting construction activity and limiting building materials price increases.

My Top 2 Stocks: Caterpillar and Oracle

By Nichole Seghetti

This month, we Fools are discussing our top two stock holdings. Today I’ll address the reasons I bought my stocks, how they came to become my largest holdings, why I continue to hold them, and whether I still like the stocks for investors today.

Caterpillar (NYSE: CAT )
Roughly one-third of the world’s population lived in urban areas in 1950, and more than half of us currently inhabit cities. By 2030, cities and towns of the developing world will make up 80% of urban humanity. Urbanization is fueling demand for the building blocks of modern society. As a result, we’ll need more natural resources, like metals and materials, to build everything from power lines to buildings. And, in order to build out infrastructure, earthmoving and construction will be required.

I bought Caterpillar and metals and mining conglomerate BHP Billiton (NYSE: BBL ) to potentially profit from this trend. I bought Caterpillar, in particular, for both its product and geographic diversification. As the world’s largest manufacturer of earthmoving, construction, and mining equipment, the company derives nearly 60% of sales internationally.

Emerging markets account for a decent slice of Caterpillar’s sales today, and they’ll likely become a much larger part of revenues over the long term. Caterpillar will benefit from a continued rebound in the U.S. housing market, and its purchase of mining equipment maker Bucyrus sets it up nicely for growth long term.

I bought both Caterpillar and BHP Billiton in the midst of the financial crisis, as the construction and building industry was coming to a screeching halt. From the time I bought Caterpillar in 2009, it’s grown more than 33% on average annually and has become one of my largest holdings. While I expect Caterpillar to experience short-term headwinds, especially as growth in developing markets slows and demand for commodities cools off, I’m in it for the long haul. And I still like the stock for investors looking to get in today.

Oracle (NASDAQ: ORCL )
The first tech stock I ever bought was Applied Materials (NASDAQ: AMAT ) . I had just graduated from college, was living in Northern California, and had a close friend who worked at the Silicon Valley semiconductor equipment maker. I had a bit of success with Applied stock and thought I’d dabble into more tech stocks.

I bought Oracle in 1998. The world’s second largest software company and the leading provider of software for information management, Oracle’s competitive advantages are its recurring revenue business model, high customer retention, and synergies from acquisitions.

Oracle’s solid long-term track record is largely thanks to founder and CEO Larry Ellison. He adheres to a philosophy of being either No. 1 or No. 2 in a market. If the company can’t achieve that, it’ll either exit the market altogether or leverage its strong balance sheet to acquire a company that will help it get to a market-leading position.

As a result, Oracle has completed billions of dollars in acquisitions during the past few years. The company continually receives criticism for its spending spree. But I think most of the acquisitions have dovetailed nicely into the rest of the company’s products, augmented profits, and increased shareholder value.

For example, last month, Oracle announced it would acquire communications tech firm Acme Packet (NASDAQ: APKT ) , a leader in next-generation networks. With this acquisition, Oracle will complete a missing link of its overall solutions. Because the company offers an entire solution suite, it’s likely the newly acquired customers will add even more of Oracle’s software and services.

I rode Oracle through the tech bubble, suffered through the tech bust, and have held on to it ever since. While the stock has brought on a few headaches over the years, I believed in its long-term prospects. And I like the direction Oracle seems to be heading in. From the time I bought the stock nearly 15 years ago, it’s returned 17% on average annually. It pays to buy and hold, even when holding is tough to do.

Foolish bottom line
In addition to being leaders in their respective fields, these industry titans enjoy enormous scale and true staying power. Both Caterpillar and Oracle remain companies that I like for investors today and that I intend to hold for many years.

Caterpillar and Oracle are my top two stock holdings, but our co-founder Tom Gardner recently revealed his top two stocks as well. For the names of that surprising pair of companies, just click here.

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March 7, 2013

Posted by nahetsblog on March 7, 2013

GE Races Caterpillar on LNG Trains to Curb Buffett Cost

By Tim Catts – Mar 6, 2013 9:01 PM PT

General Electric Co. (GE) and Caterpillar Inc. (CAT), the world’s largest locomotive makers, are rushing to develop natural gas-powered models in a potential shift from diesel’s six decades as the fuel of choice for railroads.

Three of the biggest U.S. rail carriers — Berkshire Hathaway Inc. (BRK/A)’s Burlington Northern Santa Fe LLC, Union Pacific Corp. (UNP) and Norfolk Southern (NSC) Corp. — are working with manufacturers on using gas as an alternative power source for freight trains. CSX Corp. is studying the technology.

Tapping the nation’s glut of gas as a transportation power source opens a new front in the global competition between GE and Caterpillar. Liquefied natural gas holds the promise of cutting railroads’ costs, curbing greenhouse-gas emissions and ushering in the industry’s biggest change in fuel technology since diesel displaced steam in the 1950s.

“We are entering a new era where natural gas will be a major fuel,” Lorenzo Simonelli, chief executive officer of GE’s transportation unit, said in an interview. “If you believe the price advantage over diesel is going to stay here for the next 10 to 15 years, then LNG is a revolutionary fuel.”

Industrial goods such as locomotives and energy equipment are part of GE Chief Executive Officer Jeffrey Immelt’s push to emphasize manufacturing and shrink the finance unit, an initiative started after credit-market disruptions jeopardized the company. Caterpillar began its dedicated rail business with the 2006 acquisition of Progress Rail.

‘Tremendous Increase’

GE has more than tripled to $23.67 from a low of $6.66 during the financial crisis. The company’s stock now trades at premiums of 50 percent to Caterpillar and 2.5 percent to the Standard & Poor’s 500 Railroad Index, on a price-earnings basis. Caterpillar fell 0.6 percent to $89.64 yesterday in New York.

“In the last 12 months, there’s been a tremendous increase in activity around LNG within North America,” Simonelli said. “In the not-too-distant future, you’ll see some announcements being made about how we can apply LNG into a locomotive.”

Fuel trails only employee compensation among American railroads’ expenses, spurring a search for cheaper alternatives. Union Pacific, the largest U.S. railroad by revenue, burned 1.09 billion gallons of fuel last year at an average price of $3.22 a gallon, according to SEC filings.

LNG Switch

That’s significantly costlier than liquefied natural gas. It costs truckers $2.99 to buy LNG with the same energy content as a gallon of diesel at Clean Energy Fuels Corp. (CLNE)’s Port of Long Beach facility, the world’s largest LNG fueling station, said Gary Foster, the company’s spokesman. That’s before volume discounts that can reduce the price by as much as 30 percent, he said, meaning some customers pay as little as $2.10.

Railroads are turning to locomotive makers, including Fairfield, Connecticut-based GE and Peoria, Illinois-based Caterpillar, for engines that can help them take advantage of those savings.

“We’re spending some money on LNG to see if there’s an opportunity to switch from diesel,” Matt Rose, Burlington Northern’s CEO, said in an interview in January. “We’re working with both of our manufacturers as well as a bunch of suppliers on that.”

Warren Buffett, Berkshire’s billionaire CEO, said Burlington Northern will begin tests with natural gas locomotives this year during a March 4 interview on CNBC. Buffett bought the Fort Worth, Texas-based railroad for $27 billion three years ago in the largest acquisition of his career.

Customer Requests

“A lot of the customers have come to us seeking us to develop the technology,” William Ainsworth, CEO of Caterpillar’s Progress Rail Services unit said in a telephone interview. “They’ve already run models on the fuel savings. It’s not that we have to pitch the fuel savings. We’ve just got to get the technology right.”

Caterpillar, the world’s largest maker of diesel and natural gas engines, expects to run a pilot program in North America with a locomotive engine that uses a mix of diesel and natural gas later this year, Ainsworth said.

While the manufacturer has been in the natural gas-engine business for years, the company began focusing on technology for locomotives a little over a year ago, he said in a telephone interview.

Building an engine to run predominantly on liquefied natural gas with a smaller amount of diesel mixed in, a necessary step to maintain hauling power, is complex and the technology is in the “early development stage,” Tom Lange, a spokesman for Omaha, Nebraska-based Union Pacific, said in an e- mail.

Safety Standards

That hasn’t stopped the freight rail industry from exploring the ramifications of a move toward natural gas. Union Pacific is leading a task force put together by the Association of American Railroads that’s reviewing safety standards for special fuel cars that trains will need since LNG is less energy-dense than diesel. The panel is also studying ways to ensure LNG-powered locomotives can be used across all of the largest railroads’ networks.

“Union Pacific is exploring the potential to use LNG, but it’s still very much in the early analysis phase,” Lange said. “We are working closely with locomotive and engine manufacturers, cryogenic fuel-tank suppliers and natural gas/LNG suppliers to complete our analysis.”

Logistical Hurdle

CSX (CSX), the largest railroad operating primarily in the eastern U.S., is “open to this technology and believe it is potentially viable but there’s still a lot of work to be done,” Kristin Seay, a spokeswoman for the Jacksonville, Florida-based company, said in an e-mail.

Norfolk Southern is working with locomotive manufacturers and studying compressed natural gas-powered engines in addition to LNG, said Robin Chapman, a spokesman for the Norfolk, Virginia-based railroad.

In addition to the technological challenge of developing a locomotive that can run on natural gas, the rail industry also faces the logistical hurdle of bringing the fuel to its networks, said Paul Bingham, an economist at CDM Smith, an Arlington, Virginia-based consulting firm.

“The Class 1 rails will make the investment and put in the fueling systems, but they still have to get the gas to those locations,” Bingham said in a telephone interview. “Some other third party is going to have to play in that.”

That may provide another opportunity for GE, which makes equipment it says can liquefy natural gas at any point along a distribution network. GE sold two of the so-called MicroLNG units to Seal Beach, California-based Clean Energy Fuels last year to help create a coast-to-coast network of LNG fueling stations for trucks.

“Like the move from steam to diesel, if it’s going to be that radical a transformation, that’s a lot of opportunity for sales in a lot of places,” Tony Hatch, an independent transportation consultant based in New York, said in a telephone interview.

BNSF Railway Working With Caterpillar, GE to Test Gas in Locomotives

By Jennifer Booton

Berkshire Hathaway’s (BRK.A) locomotive division, BNSF Railway, one of the world’s biggest consumers of diesel, confirmed Wednesday that it will undergo a pilot this year where its freight trains will use natural gas rather than diesel.

It’s a move BNSF Railway CEO Matthew Rose said will allow the company to evaluate the “technical and economic viability” of natural gas, which he said could serve to lower locomotive fuel costs.

“The use of liquefied natural gas as an alternative fuel is a potential transformational change for our railroad and for our industry," Rose said.

BNSF has been working with locomotive manufacturers General Electric (GE) and Caterpillar’s (CAT) EMD unit to develop the natural gas engine technology that will be used for the pilot.

The company still has to overcome technical and regulatory challenges, however Rose said the pilot nevertheless marks an important step in the transition to liquefied natural gas in through-freight service, potentially reducing fuel costs and greenhouse gases.

Oil has long been the primary source of fuel for jets and trains, yet the switch by BNSF may serve to lower diesel’s dominance in transportation. Improved technologies have boosted gas reserves, lowering the price of gas and making it a much more fiscally attractive compared with its costly oil counterpart.

BNSF, a division of Warren Buffett’s Berkshire Hathaway, plans to pilot the use of gas to operate its massive portfolio of freight locomotives, responsible for shipping anything from Boeing (BA) aircraft parts to crude oil.

In an interview with The Wall Street Journal, Rose said the freight train sector has not seen such a historic transition since it shifted from stream engines.

3 Downside Risks That Investors Should Not Gloss Over With Caterpillar

Caterpillar, Inc. (CAT) seems to be a very popular stock and it is easy to see why, when this company makes some of the coolest earthmoving equipment in the world. Caterpillar equipment is used in many industries which includes construction, farming, mining, heavy infrastructure, and others. Because of this, Caterpillar is dependent on the health of the global economy. While this company has a great brand name and it manufactures very high quality products, it seems that some investors "gloss over" the challenges and potential risks that should be considered more thoroughly. Here is a look at some of these potential risk factors:

1) Caterpillar makes heavy machinery that is often used in the coal industry and in the mining of precious and other metals, such as iron ore. The coal industry is facing major challenges as the price of coal has plunged due to increased use of natural gas by many utilities. Demand for coal and iron ore (which is used to make steel) from China has been weak as well, and this dynamic could persist or even get worse as fears over a property bubble in China linger. With precious metals prices facing a decline recently, expansion plans at many companies might be put on hold and lower demand for mining equipment.

2) Even though the U.S. economy is seeing some bright spots in areas like housing, that may not be enough to outweigh a number of very serious potential challenges that the economy is facing. The United States could easily slip back into a recession, especially as a 2% payroll tax increase that was introduced in January starts to bite into consumer spending. Additionally, the recent "Sequestration" budget cuts could impact a number of major industries and even cause layoffs or work furloughs for certain government employees. The impact of these budget cuts might trickle into the general economy over the next few months.

3) Many global macro economic issues remain and any one of these could create a major financial crisis or a double dip recession. The economy in Europe remains weak and many countries are faced with very high unemployment. Spain and Greece are facing unemployment rates of over 20%, and other countries like France are seeing these numbers trending in the wrong direction. While Europe seemed to be back in control of a debt crisis in recent weeks, election results in Italy has now reminded investors how fragile the current situation remains. The concern is that if Italy votes in the wrong leaders who want to push back against austerity measures, it could lead to a chain of events that causes Italy to leave the European Union and the Euro currency and possibly lead to Spain leaving as well. This type of event could create a financial crisis that is not priced into the market now as the S&P 500 Index (SPY) trades near all time highs.

Caterpillar opens ME parts distribution center

US-based Caterpillar, a leading manufacturer of construction and mining equipment, today opened its new parts distribution center in Dubai.

The 500,000 sq ft Middle East Distribution Center (MEDC) employs 130 people and will further strengthen aftermarket parts support in the East-Africa and Middle East region.

The facility will also serve as a regional office for employees from other Caterpillar service groups. The Middle East Distribution Center joins four distribution centers in the US.

In addition, construction is underway for new distribution centers in Queensland, Australia, and San Luis Potosi, Mexico.

“We are very pleased to be adding the Middle-East Distribution Center to our industry leading global parts network," said Steve Larson, Caterpillar vice president with responsibility for parts distribution and logistics, and president of Caterpillar Logistics Services.

“With the outstanding product support capability of Cat dealers in the region and the improved parts availability this operation will deliver, we will continue providing customers an unmatched level of after-sale support.”

The Middle East Distribution Center will increase total warehouse capacity for the Europe, Africa and Middle East (EAME) network, adding to existing Distribution Centers in Grimbergen, Johannesburg and Moscow.

“We are excited about our overall growth opportunities in the Middle East and Africa markets and, along with our dealers, are investing in expanding our facilities,” said Nigel Lewis, Caterpillar vice president with responsibility for EAME Distribution.

“The Middle-East Distribution Center is the first of a number of investments we are making in the region that will allow us to improve parts and components availability and the delivery process to our dealers and customers."

The facility will also contribute to Caterpillar’s sustainable development goals by reducing airfreight for parts ordered in the region.

“We are delighted to be a part of the opening of Caterpillar’s new Parts Distribution Center in Jafza. Caterpillar’s expansion underlines the company’s vision and commitment to the region. We are sure the new facility will enable them to further strengthen Caterpillar’s strong presence in the region. We wish them great successes and growth in the Middle East,” said Salma Ali Saif Bin Hareb, chief commercial officer of Economic Zones World & Jafza.

The Middle East Distribution Center is an important part of Caterpillar’s overall plan to enhance the global Cat Parts distribution network and get parts to dealers and customers faster. – TradeArabia News Service

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Supply of existing homes falls seven months straight

Posted by nahetsblog on February 27, 2013


Across the country the supply of existing home sales is at an eight year low after seven straight months of declines.Competing bids on the same house is driving up prices.Unfortunately at least 25% of the home owners cannot sell yet because they are still underwater,if they sold at current values their would be no money left after paying closing costs for a down payment on the next home.Another change that is helping the prices is the number of short sales is decreasing. Their was a seven percent increase in prices last year with half the cities seeing nine percent or better,Phoenix,AZ led the way with 24% then San Fransisco,CA at 14% then Detroit,MI at 13% and fourth was Las Vegas,NV at 12.3%.

The Economy
The United States economy continues to grow at a moderate pace despite facing various hurdles, many of them created by the politicians in our nation’s capital. The most immediate hurdle to overcome is the March 1 sequestration (an across-the-board reduction in spending for most areas of federal government) unless an agreement is reached over the federal budget. There is already a drag on economic growth as various federal agencies adjust their spending in anticipation of sequestration. The negative effects of threatened spending cuts will be limited if an agreement over the budget appears near.

The other major politically created risk is the federal debt ceiling. Legislation temporarily increased the debt ceiling until May 18 when it expires. Hitting the debt ceiling would mean that the Treasury would have to delay various federal payments, including Social Security and Medicare, federal payrolls, reimbursements to contractors, tax refunds, and debt payments. Not meeting debt payments would be a technical default of U.S. government debt and undoubtedly mean a downgrade of the U.S. debt rating, with negative fallout for many U.S. companies — most notably financial institutions.

Other, though lesser risks include possible sovereign debt default by one or more European countries, one or more countries abandoning the euro or total dissolution of the euro, and a significant and prolonged increase in energy prices. In spite of all these challenges, we expect the economy to continue to grow at an acceptable, if unspectacular, rate.

On the positive side, low interest rates and the reviving housing market are providing a much needed lift to the economy.

Risks to the Economy and the Forecast
As just noted, major risks to the economy include the following:

  • Sequestration
  • Allowing the temporary increase in the federal debt ceiling to expire without a more permanent solution or another temporary increase in the ceiling (a less desirable outcome)
  • Sharp cutbacks in government spending over the near term rather than phasing them in over a few years (possibly a result of a budget agreement to prevent sequestration or an agreement to raise the debt ceiling)
  • Sovereign debt default by one or more European governments
  • One or more European governments abandoning the euro
  • A sudden, significant jump in oil prices (50% or more) for a prolonged period (two months or more)

If one or more of these risks occur then economic growth will be lower than forecasted with negative fallout for commercial construction and would increase the possibility of a recession.

The Forecast
The Reed Construction Data forecast assumes that the outlined risks do not occur. Total construction spending is forecasted to grow 8.5% this year and 9.3% in 2014.

U.S. Total Construction Spending

(billions of U.S. current dollars)

Actual Forecast
2009 2010 2011 2012 2013 2014
New Single-family 105.3 112.6 108.2 129.2 156.5 181.1
Year-over-year % Change -43.3% 6.9% -3.9% 19.4% 21.2% 15.7%
New Multifamily (1) 35.9 24.1 22.6 27.2 34.4 39.3
-30.0% -32.9% -6.0% 20.3% 26.5% 14.1%
New Residential (2) 141.2 136.7 130.8 156.4 191.0 220.3
-40.4% -3.2% -4.3% 19.6% 22.1% 15.4%
Residential Improvements (3) 112.7 112.5 114.9 127.0 143.7 155.2
-6.6% -0.2% 2.2% 10.5% 13.2% 8.0%
Total Residential (4) (5) 253.9 249.1 245.7 283.4 334.7 375.5
-29.0% -1.9% -1.4% 15.4% 18.1% 12.2%
Nonresidential Building 375.7 290.4 283.1 298.9 311.1 337.2
-14.2% -22.7% -2.5% 5.6% 4.1% 8.4%
Heavy Engineering (Non-Building) 273.5 265.0 249.4 267.9 276.6 295.1
0.5% -3.1% -5.9% 7.4% 3.2% 6.7%
Total (5) 903.2 804.6 778.2 850.2 922.4 1,007.9
-15.4% -10.9% -3.3% 9.2% 8.5% 9.3%
(1) New Multifamily = New Private Multifamily + New Public Multifamily – Public Improvements
(estimated by Reed Economics)
(2) New Residential = New Single-family + New Multifamily
(3) Residential Improvements include remodeling, renovation and replacement work.
Number also includes RCD estimate of improvements to public housing.
(4) Total Residential = New Single-family + New Multifamily + Residential Improvements.
(5) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data.

Twenty major upcoming California and Florida construction projects – February 2013


The accompanying tables show 20 of the largest upcoming California and Florida construction projects. They are all in the planning stage and are mainly new projects, but may also involve additions and/or alterations.

Shopping centers, hotels, office buildings, medical buildings, educational buildings, libraries and museums, sports and entertainment complexes, industrial projects and government buildings will all be covered on a rotating basis.

There are several reasons for highlighting upcoming large projects. Such jobs have often received a fair amount of media coverage. Therefore, people in the industry are on the lookout for when job-site work actually gets underway. And, as showcase projects, they highlight geographically where major construction projects are proceeding.

Finally, total construction activity is comprised of many small- and medium-sized projects and a limited number of large developments. But the largest projects, simply by their nature, can dramatically affect total dollar volumes. In other words, the timing and size of these projects have an exaggerated influence on market forecasts.

Ten of the largest upcoming California construction projects

Project Title and Owner/Developer Location Current
U.S. $
San Francisco Transbay Joint Powers Authority San Francisco, CA Working Drawings $4,000
San Diego Unified School District San Diego, CA Proposal $2,800
Fifteen Group Los Angeles, CA Masterplanning $2,000
Woodridge Capital LLC Los Angeles, CA Conceptual Drawings $1,500
Hollywood Park Inc Inglewood, CA Working Drawings $1,000
Community Redevelpment Agency Los Angeles Hollywood, CA Conceptual Drawings $1,000
Chaffey Joint Union High School District Ontario, CA Proposal $848
US – Veterans Affairs Facilities Dept Los Angeles, CA Masterplanning $800
San Diego Chargers San Diego, CA Proposal $800
University of California Richmond, CA Proposal $718

Ten of the largest upcoming Florida construction projects

Project Title and Owner/Developer Location Current
U.S. $
Genting New York LLC (Resorts World Casino NYC) Miami, FL Masterplanning $3,000
Sarasota Co-Commissioners Sarasota, FL Proposal $1,000
City of Miami Beach Miami Beach, FL Masterplanning $650
Palm Beach County Solid Waste Authority West Palm Beach, FL Design Development $650
Northern Stary Realty Orlando, FL Masterplanning $500
Greater Orlando Airport Authority Orlando, FL Proposal $470
Tampa Bay Rays St Petersburg, FL Proposal $450
Miami Dade Water & Sewer Authority Doral, FL Schematics $400
TerraPointe LLC Nassau County, FL Proposal $400
Trammell Crow Co Tampa, FL Masterplanning $300

Construction Spending Ends 2012 on a High Note

02/26/2013 by Bernard M. Markstein

Total Construction Spending and its Major Components
The U.S. Census Bureau reported that total construction spending advanced 0.9% in December to $885.0 billion at a seasonally adjusted annual rate (SAAR), its ninth consecutive monthly increase. Spending numbers for October and November were revised up $8.0 billion and $11.0 billion, respectively. The November revision changed a 0.3% decline into a 0.1% gain. For the year, construction spending increased 9.2% over 2011.

Nonresidential building construction rose 1.0% to $301.0 billion (SAAR) in December following a 1.4% drop in November. October spending was revised up $3.0 billion and November was revised up $2.2 billion. For the year, spending was up 5.6% from 2011.

Heavy engineering (non-building) construction spending was the one area of weakness in December, falling 0.5% to $269.4 billion (SAAR) after jumping 1.1% in November. November’s number included a $2.3 billion upward revision. Despite the cutbacks in public financing for heavy engineering projects, spending was up 7.4% for the year.

Total residential construction spending, which includes improvements, continued its upward march, increasing for the ninth consecutive month, jumping 2.1% to $314.6 billion (SAAR) in December after increasing 0.7% in November. New residential construction spending, which excludes improvements, rose a healthy 1.4% after increasing 1.6% in November. For 2012, total residential construction spending was up 15.4% from 2011 while new residential construction was up 19.6% from 2011.

Total public construction spending fell for the fourth month in a row, down a seasonally adjusted (SA) 1.4% in December after slipping 0.1% in November. For 2012, public construction spending decreased 2.7%. Total private construction spending shot up 2.0% in December, its tenth consecutive monthly increase, after rising a more modest 0.2% in November. For the year, private construction spending increased 16.1% over 2011.

U.S. Total Construction Spending

(billions of U.S. current dollars)

Current Monthly 3-Month Moving Average Year-to-Date (NSA)
Oct-12 Nov-12 Dec-12 Oct-12 Nov-12 Dec-12 Jan-11 to
Jan-12 to
New Single-family 141.5 143.7 144.8 136.5 140.5 143.4 108.2 129.2
Month-over-Month % Change 3.8% 1.5% 0.8% 3.5% 3.0% 2.0%
Year-over-year % Change (NSA) 29.7% 30.6% 29.0% -3.9% 19.4%
New Multifamily (1) 29.6 30.2 31.6 28.7 29.4 30.5 22.6 27.2
4.0% 2.2% 4.5% 2.2% 2.5% 3.6%
29.7% 30.4% 34.3% -6.1% 20.3%
New Residential (2) 171.1 173.9 176.4 165.2 170.0 173.8 130.8 156.4
3.8% 1.6% 1.4% 3.3% 2.9% 2.3%
29.7% 30.5% 29.9% -4.3% 19.6%
Residential Improvements (3) 135.1 134.3 138.2 132.1 133.8 135.8 114.9 127.0
2.2% -0.6% 2.9% 2.4% 1.3% 1.5%
16.9% 12.3% 17.4% 2.2% 10.5%
Total Residential (4) (5) 306.2 308.2 314.6 297.3 303.8 309.7 245.7 283.4
3.1% 0.7% 2.1% 2.9% 2.2% 1.9%
23.3% 22.2% 24.2% -1.4% 15.4%
Nonresidential Building 302.3 298.1 301.0 300.7 299.4 300.4 283.2 298.9
1.5% -1.4% 1.0% 0.5% -0.5% 0.4%
5.1% 1.7% -0.2% -2.5% 5.6%
Heavy Engineering (Non-Building) 267.8 270.7 269.4 266.7 268.6 269.3 249.4 267.9
0.1% 1.1% -0.5% 0.0% 0.7% 0.2%
5.3% 3.7% 0.9% -5.9% 7.4%
Total (1) 876.2 876.9 885.0 864.8 871.8 879.4 778.3 850.2
1.6% 0.1% 0.9% 1.2% 0.8% 0.9%
11.1% 8.8% 7.4% -3.3% 9.2%
Monthly levels are seasonally adjusted at annual rates (SAAR figures).
(1) New Multifamily = New Private Multifamily + New Public Multifamily – Public Improvements (estimated by Reed Economics)
(2) New Residential = New Single-family + New Multifamily
(3) Residential Improvements include remodeling, renovation and replacement work.
Number also includes RCD estimate of improvements to public housing.
(4) Total Residential = New Single-family + New Multifamily + Residential Improvements.
(5) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce.

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February 25th, 2013

Posted by nahetsblog on February 26, 2013


The Keystone XL oil pipe line project has the potential to deliver eight hundred fifty thousand barrels of oil every day for the next forty years, so why are we not getting it? The eco friendly ones want us to explore and expand the solar,wind,tide,geothermal forms of energy first, but even if we triple their current production that is still going to leave us thirteen million barrels short every day! At the rate of current increases we will need fifteen million barrels of oil every day five years from now. That is a need not a desire, who are we going to get it from,Mexico,South America,North Sea,Alaska pipe line,OPEC , or Canada.or we can expand our production in the lower forty eight,but their is no denying that the need will be their.

If we started digging today it will take at least five years to get the oil to the refineries in Texas no one can predict what the price of oil is going to be five years from now but it is a safe bet it is going to be more than it is now.and as long as the price is above sixty five dollars a barrel it will be profitable to refine the Black Sands of Alberta.


In the furor over the size of the federal debt, rarely does anyone discuss good debt versus bad debt. Unfortunately, this failure is skewing the debate over the federal debt—to the potential detriment of the nation.

Household vs. Nation
In discussing federal revenues and outlays, the comparison is often made to a household that must balance its budget. This comparison should be carefully limited in its application. What is true for an individual or household is not necessarily true for a nation. In introductory macroeconomics courses, this is referred to as the “fallacy of composition.” Not to go too deeply into this topic, but at its simplest level, there is one major difference: Nations can print money; individuals cannot (at least not if they want to stay out of jail).

The analogy of good debt versus bad debt for the individual or the household can be extended to a country. We clearly delineate between debt acquired for long-lived assets, such as the purchase of a house or a car, versus a short-term consumption item, such as a vacation or a fabulous restaurant meal. The first is considered good, or acceptable, debt; the second is bad, or unacceptable, debt. As with all things in life, there are gray areas. Debt to maintain a major asset, such as replacing a broken furnace or repairing the roof of the house, both of which would have a long useful life, is considered acceptable debt. Debt to acquire an asset that is largely for consumption purposes, although it might have a long useful life, such as a home entertainment system, is less clear. (We could throw into the questionable region the purchase of a refrigerator or dishwasher or repair of a car.)

Investing in Infrastructure
Countries face similar decisions. Debt acquired to build or maintain long-lived assets, such as highways, bridges, dams, ports, communications systems, and so forth, which are investments in the country’s infrastructure, will be repaid with better economic growth, and at least some of the associated cost of construction will be recaptured in higher tax payments. In this sense, the analogy has shifted from a household to a business. Long-term debt acquired for short-term needs, such as meeting payrolls or paying for office supplies, reflects poor management. If necessary, like a business, a country may use short-term borrowing (in the case of the United States, Treasury bills) to deal with the mismatch of short-term expenses (outlays) and receipts (revenues).

Businesses separate these expenses to differentiate between short-term expenses and long-term expenses associated with investment in plant and equipment. For the latter, a company has a capital account. That account will include an expense for depreciation, which recognizes that any asset will wear out over time or become technologically outdated and need to be replaced.

A National Capital Budget?
The United States government, on the other hand, does not have a capital budget. There is a strong argument that the U.S. government should have a capital budget (see for example Federal Capital Budgeting). The argument is not as cut and dry as some would have it. Charles Schultze, former Director of the U.S. Bureau of the Budget (1965-67) and former Chairman of the President’s Council of Economic Advisors under President Carter (1977-80), laid out many of the pros and cons of a federal government capital budget in testimony to the President’s Commission to Study Capital Budgeting in 1998.

The chief danger of a government capital budget is political. Suddenly, virtually every new spending proposal would become a capital item not subject to what little control there is for current outlays. The equivalent would be arguing that an oil change for your car is necessary to maintain its long-term life and, therefore, should be funded through your home equity line rather than paid out of pocket.

Although a formal government capital budget might have significant risks from a political standpoint, the absence of such an account does not preclude voters and politicians from thinking along the lines of capital budgeting when discussing various proposals.

Using a capital budgeting approach is helpful in considering the current state of the economy and the recent partial resolution of the fiscal cliff issues. The federal deficit (outlays minus revenues) and debt (the accumulation of deficits over the life of the nation) are issues that need to be kept in perspective. In the same way that a household or a business should be careful not to take on too heavy a debt burden, the U.S. government has to be cognizant of the dangers of too large a debt burden.

The Economic and Budget Challenge
As previously noted, a nation is not a household or a business. Within reason, a nation can take on additional debt when its economy is struggling and its revenues are down. In addition, it must also reduce its deficits when economic times are good.

Although the United States economy has improved over the past few years, it continues to operate well below its potential. Unemployment remains too high. At the same time, there is a large need for investment in infrastructure. For too long the nation has underinvested in its highways, ports, and other facilities. It is estimated that Minnesota alone needs to spend over $10 billion to repair and improve its water and sewer systems. And if the need to repair and upgrade infrastructure doesn’t seem pressing, consider the 2007 I-35W bridge collapse in Minnesota, which resulted in 13 deaths and 145 people being injured.

Consider the following facts:

  • At present, large numbers of construction workers are out of work. The unemployment rate among construction workers in December was 13.5%, not counting workers who left the industry for jobs in other sectors or retired because of lack of work in construction over the past few years
  • Building materials are relatively inexpensive and will only increase in price once the economy is on an even better footing
  • Long-term interest rates are near historic lows

Given these facts, as well as the pressing need for investment and the economy’s underperformance, what better time to engage in revitalizing our infrastructure?

Making such an investment will not only help lift the economy in the short-run, but increase the nation’s potential growth, improving the government’s ability to pay the debt accumulated for these projects. Failure to invest in our national infrastructure will limit future growth, reducing our global competitiveness.

We should not let legitimate concerns about federal deficits keep us from investing in our future. Borrowing to invest in the nation’s infrastructure would be good for the economy and for the country. It would be good debt.

Construction Spending Gains Strength in October

12/20/2012 by Bernard M. Markstein

Total Construction Spending and its Major Components
The U.S. Census Bureau reported that total construction spending powered up 1.4% in October to $872.1 billion at a seasonally adjusted annual rate (SAAR) after rising 0.5% in September, and marked the seventh consecutive monthly increase. October’s healthy growth was largely due to continued strong expansion in residential construction spending. The Census Bureau also revised up construction spending numbers for August by $9.7 billion (1.2% higher than reported last month) and for September by $8.8 billion (1.0% higher than reported last month). Year-to-date not seasonally adjusted (NSA) construction spending was up 9.3% compared to the same period a year ago.

Nonresidential building construction rose 0.8% to $302.8 billion (SAAR) in October following a 0.6% decrease in September (previously reported as a 1.4% decline, but revised up by $5.9 billion). On a year-to-date NSA basis, spending increased 6.6% from the same period in 2011.

Heavy engineering (non-building) construction spending crept up 0.2% to $268.5 billion (SAAR) in October following a 1.1% jump in September (revised up $3.0 billion). On a year-to-date NSA basis, spending was 8.5% higher than last year.

Total residential construction spending, which includes improvements, increased for the seventh consecutive month, soaring 3.0% to $300.8 billion (SAAR) after increasing 1.2% in September. New residential construction spending, which excludes improvements, rocketed up an even stronger 3.9% after shooting up 3.1% the previous month. Year-to-date total residential construction spending was up 13.3% from the same period a year ago, and new residential construction was up 17.4% from 2011.

Total public construction spending rose 0.8% (SA) in October after decreasing 0.1% in September. On a year-to-date basis, public spending was down 2.0% from the same period in 2011. Total private construction spending leapt up 1.6% in October, recording its eighth consecutive monthly increase, after rising 0.8% in September. On a year-to-date basis, private construction spending increased 16.0% compared to the same period a year ago.

U.S. Total Construction Spending

(billions of U.S. current dollars)

Current Monthly 3-Month Moving Average Year-to-Date (NSA)
Aug-12 Sep-12 Oct-12 Aug-12 Sep-12 Oct-12 Jan-11 to
Jan-12 to
New Single-family 131.6 136.4 141.3 128.3 131.9 136.4 90.2 105.8
Month-over-Month % Change 3.1% 3.6% 3.6% 2.6% 2.8% 3.4%
Year-over-year % Change (NSA) 20.8% 25.0% 29.3% -5.5% 17.3%
New Multifamily (1) 28.1 28.3 29.8 27.7 28.0 28.7 18.9 22.2
1.4% 0.6% 5.4% 2.2% 1.0% 2.5%
17.9% 19.5% 31.0% -6.8% 17.9%
New Residential (2) 159.7 164.6 171.1 156.0 159.9 165.1 109.1 128.0
2.8% 3.1% 3.9% 2.5% 2.5% 3.3%
20.3% 24.1% 29.6% -5.7% 17.4%
Residential Improvements (3) 129.1 127.5 129.8 126.5 127.5 128.8 96.6 105.0
2.6% -1.2% 1.8% 2.2% 0.7% 1.0%
17.3% 13.0% 13.3% 1.2% 8.7%
Total Residential (4) (5) 288.8 292.1 300.8 282.6 287.4 293.9 205.7 233.0
2.7% 1.2% 3.0% 2.4% 1.7% 2.3%
18.9% 19.2% 21.4% -2.6% 13.3%
Nonresidential Building 302.2 300.3 302.8 300.4 300.2 301.8 235.4 251.1
1.4% -0.6% 0.8% 0.1% -0.1% 0.5%
2.9% 1.1% 5.5% -4.6% 6.6%
Heavy Engineering (Non-Building) 265.0 268.0 268.5 266.3 266.8 267.1 205.8 223.3
-0.9% 1.1% 0.2% -0.5% 0.2% 0.1%
4.6% 2.9% 5.8% -5.8% 8.5%
Total (1) 855.9 860.4 872.1 849.2 854.3 862.8 646.9 707.4
1.1% 0.5% 1.4% 0.7% 0.6% 1.0%
8.5% 7.2% 10.8% -4.3% 9.3%

The Economy
Following the December meeting of the Federal Open Market Committee (FOMC), the policymaking arm of the Federal Reserve, the FOMC released a statement explaining the factors that will guide it in deciding when to raise the federal funds rate, a rate that financial institutions charge each other for short-term loans and the FOMC uses to judge how much liquidity its actions are providing the financial markets. Until this meeting, the FOMC’s guide to its policy intentions had been calendar based, with the typical statement that it “anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.” (October 24, 2012 FOMC Press Release)

With the new guidance, the FOMC will maintain its current target range for the federal funds rate of 0% to ¼% until the unemployment rate drops to 6.5%, as long as the one- to two-year projection of inflation does not rise above 2.5%. This is more sensible and more useful than the previous “here’s when (a date) the FOMC expects to raise (or lower) rates” type guidance.

From a practical standpoint, the new FOMC guidance is essentially unchanged from previous FOMC statements. Given the slow rate of employment growth, it is unlikely that the unemployment rate, currently 7.7%, is likely to fall to 6.5% before 2015. What it does provide is explicit guidelines as to what is driving Fed monetary policy. This is in keeping with Federal Reserve Chairman Ben Bernanke’s efforts to increase transparency of the Fed and its monetary policy. As always, the Fed can change policy based on new information and the needs of the economy and the financial markets. The current guidance is helpful, but not set in stone. That is as it should be.

The FOMC also announced that it will extend its program of purchasing additional agency mortgage-backed securities and will make additional monthly purchases of longer-term Treasury securities in 2013. The former will support the housing market’s recovery, the latter will help keep long-term interest rates low, a benefit to business investment and commercial construction activity.

The economic outlook remains positive. Growth for third quarter real (inflation-adjusted) gross domestic product (GDP) was 3.1% (SAAR), up from second quarter’s 1.3%. Third quarter’s growth rate represents good, solid growth, though not as strong as is desired given the continued large pool of unemployment workers. The negative effects of Hurricane Sandy on the economy as reflected in the macroeconomic data have been negligible to date.

The United States economy is on a sustainable growth path. Reed Economics forecasts real year-over-year GDP growth for 2013 to be 2.7% and for 2014, 3.0%. This forecast is at the upper end of what other economists are forecasting, but roughly in line with them.

Risks to the Economy and the Forecast
The relatively positive economic outlook faces numerous risks including the following:

  • Debt default by one or more European governments. The risk of sovereign debt default remains with Greece, Spain, and Italy the most likely candidates. The fear is that a debt default by one country would create pressure on other countries overburdened by debt and force/lead them to default on their debt. A single default by a small country such as Greece would be painful, but not fatal. A default by a larger country or more than one country would be a serious blow to financial institutions and markets worldwide. The result would be recession in all of Europe where several countries are already in recession and drag the U.S. economy down into recession as well.

    Nobody wants this outcome. To date European policymakers have taken actions to avert a debt default. Although no truly long-term solution has yet to emerge, policymakers are likely to continue to make the necessary short-term moves to prevent a default.

  • Abandonment of the euro. It is unlikely that Europe would give up on the euro altogether. It is possible that one or more countries would forsake the euro for its own national currency. Greece is the country that is most likely to abandon the euro voluntarily or involuntarily. The adverse effects on Europe of a single country shedding the euro, particularly a small country, are relatively minor and are more likely to be borne in the short run by the country casting off the euro, although it will likely benefit in the longer run.
  • Going over the fiscal cliff — the return of tax rates to their 2000 level and across the board cuts in federal spending as of the beginning of 2013. As of this writing, negotiations to resolve the problem are ongoing between congress and the administration. It seems likely that an agreement will be hammered out. However, nothing is guaranteed and the risk of going over the cliff remains. The nation’s economy can tolerate a short period of falling off the cliff (more accurately sliding down a gentle slope that becomes steeper over time) if a resolution is on the horizon. Not resolving the issue in a timely manner would be sufficient to tip the U.S. economy into recession.
  • Hitting the federal debt ceiling. As the federal government continues to run deficits, a situation that will not change even with an agreement to resolve the fiscal cliff issue, the debt increases, approaching the debt ceiling in early 2013. Reaching the debt ceiling would require many federal government operations to cease, hurting the economy. It does appear that any resolution of the fiscal cliff will include raising the debt ceiling. Nevertheless, as with the fiscal cliff, the risk of no action is real with negative fallout for the economy.
  • Higher energy prices. The threat of rising energy prices has diminished of late. Nonetheless, the potential for a disruption of energy supplies (mainly oil) resulting in higher prices is always with us. Note that although higher energy prices are always painful and a drag on economic growth, it would take drastically higher prices (50% or more) for a prolonged period to do real damage to our economy.

Although we are reasonably confident that these risks will be avoided, failure to avoid any of these risks would lower our forecast and carry the potential for a U.S. recession.

The Forecast
The Reed Construction Data forecast assumes that the outlined risks are avoided. Total construction spending is projected to rise 9.0% in 2012, 9.0% in 2013, and 9.3% in 2014.

U.S. Total Construction Spending

(billions of U.S. current dollars)

Actual Forecast
2009 2010 2011 2012 2013 2014
New Single-family 105.3 112.6 108.2 129.1 158.0 182.8
Year-over-year % Change -43.3% 6.9% -3.9% 19.3% 22.4% 15.7%
New Multifamily (1) 35.9 24.1 22.6 27.1 33.3 38.0
-30.0% -32.9% -6.0% 19.8% 22.7% 14.1%
New Residential (2) 141.2 136.7 130.8 156.2 191.3 220.7
-40.4% -3.2% -4.3% 19.4% 22.5% 15.4%
Residential Improvements (3) 112.7 112.5 114.9 123.6 134.2 145.0
-6.6% -0.2% 2.2% 7.6% 8.6% 8.0%
Total Residential (4) (5) 253.9 249.1 245.7 279.8 325.5 365.7
-29.0% -1.9% -1.4% 13.9% 16.3% 12.3%
Nonresidential Building 375.7 290.4 283.1 299.9 316.0 342.5
-14.2% -22.7% -2.5% 5.9% 5.4% 8.4%
Heavy Engineering (Non-Building) 273.5 265.0 249.4 268.5 283.1 302.1
0.5% -3.1% -5.9% 7.7% 5.4% 6.7%
Total (5) 903.2 804.6 778.2 848.2 924.6 1,010.3
-15.4% -10.9% -3.3% 9.0% 9.0% 9.3%


February 23, 2013 7:00 pm • By NANCY HICKS / Lincoln Journal Star

When Mike Mueller takes his grandkids, Jade and Jacob, to a basketball game or a show at the new Pinnacle Bank Arena, he’ll have bragging rights.

He can point to the buff-colored wall panels on the exterior of the arena made by Concrete Industries, where Mueller is a plant manager.

He can point out the concrete system that supports seats in the arena bowl and to the attached parking garage, a pre-cast structure by Concrete Industries.

"It is a source of pride for us," Mueller said. "For most of us, it is a lifetime event."

Mueller is one of more than 1,300 local workers involved in turning an old rail yard into a hot spot with spaces for entertainment, apartments and shopping.

Concrete Industries, a subsidiary of NEBCO, is one of many Lincoln-based companies profiting from the construction work going on near the downtown Post Office.

Lincoln employees have been involved in many of the details, from moving dirt to building the steel stairs, installing the electrical system and putting together the fancy copper tabletops for each of the arena’s 36 suites. Some local examples:

* Glass Edge is supplying the arena’s exterior glass.

* Stephens & Smith is handling the concrete flooring throughout the building.

* Ferguson Enterprises is providing the plumbing equipment and supplies.

* A consortium of local engineering and architectural firms joined hands to do the engineering work on the street system, utility lines, Amtrak station and pedestrian bridge.

The Minnesota firm Mortenson Construction, one of the country’s biggest sports venue construction firms, is the construction manager for the 16,000-seat arena expected to open this fall.

Mortenson, along with local partner Hampton Construction, has selected the arena subcontractors using a process where local firms and national firms with Nebraska partners are given preference.

So far $158 million of the $215 million in public contracts for the arena-related work has gone to companies with a Nebraska office, based on an analysis done by PC Sports, the company coordinating arena-related construction.

More than half the workers on the public construction jobs are from Lancaster County, and most of the rest are from Nebraska. Slightly more than 10 percent have out-of-state addresses.

"It’s really welcome work in a time when work is pretty slow," said Doug Cratsenberg, vice president of Gregg Electric, the company doing electrical work on the arena’s attached parking garage and installing the arena’s fire alarm system.

Two local firms, Gregg Electric and ABC Electric, were partners with Minnesota-based Gephart Electric.

Lincoln companies Commonwealth Electric and Hy-Electric also have been hired in recent weeks, Cratsenberg said.

The estimated $450 million in public and private construction under way in the West Haymarket — the arena, parking garages, street construction, hotels, shops and apartments — supports about 13,000 jobs, based on economic impact studies of nonresidential construction.

About one-third of those jobs are direct, on-site construction jobs; one-sixth are in supplying industries, such as quarries, manufacturers of equipment and materials, design and financial services; and one-half are jobs created in the rest of the economy as workers and owners of construction and supply businesses spend their additional income, said Ken Simonson, chief economist for the Associated General Contractors of America.

Simonson pointed out that Nebraska had the largest percentage increase in construction employment of any state in 2012, a 10.1 percent increase, representing 4,100 jobs, according to the Bureau of Labor Statistics.

Construction employment rose 8 percent in Lincoln and 15 percent in the Omaha-Council Bluffs area, Simonson said.

The development came at a time when the Lincoln construction industry needed work.

The housing market was on a downswing when the arena-related work began, said Wendy Birdsall, president of the Lincoln Chamber of Commerce.

"It was a perfect convergence," she said.

One of the local companies with arena work, Midwest Steel, is making the handrails for the seating bowl, a small part of their larger contract for structural steel.

"We’re glad to be involved," said Midwest Steel President Rob Ediger, whose company is just down the street from the arena.

Arena-related work provided about 35 percent of the company’s work in the past year, and it "allowed us to showcase our capabilities," he said. Midwest Steel is providing the stairwells, railings, catwalks and other structural steel for the arena.

What that might mean for the company’s future remains to be seen, he said.

Partnering on a major project does provide companies an opportunity to expand their experience, said Hampton’s Bob Caldwell.

"Your employees learn from people who build sports venues," he said. "Hampton and others can add Pinnacle Bank Arena to their resumes."

The focus on using local firms likely improved local participation, said Ediger. Some of the national companies may have found a local partner, but generally it would be someone they worked with previously, he said.

Midwest Steel had done work for years with Lincoln’s Hampton Construction. Hampton leaders connected them with LeJeune Steel Co. of Minneapolis, their partner on the steel work.

Judds Brothers Construction of Lincoln cleared the arena site, brought in the dirt for the surcharge, installed water, storm sewer and sanitary sewer lines and removed some of the tracks around the arena.

The company "probably averaged 10 to 12 people there for the five-month period," CEO John Judds said. Other subcontractors were involved in the early dirt work.

"It kept a lot of trucks and drivers busy," he said.

Concrete Industries has been involved in the arena construction for a year and a half, furnishing a substantial amount of the ready-mixed concrete and prefabricated concrete products. There was enough work for the equivalent of about 30 full-time employees, said Bob Nordquist, company president.

And the arena itself isn’t the only construction work in the area, said Nordquist. There are private hotels, apartments, even a corporate headquarters set to go up in the West Haymarket, plus parking garages in the area.

And development of the Nebraska Innovation Campus is on the horizon, he said.

"It’s absolutely amazing what has happened in Lincoln in the last few years."

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November 10,2012

Posted by nahetsblog on November 20, 2012


Considering Sandy had already been downgraded from a hurricane to severe storm the damage was astounding, a real life perfect storm ,this is the third storm that has pummeled this part of the country over the last two years.No one expected 13 foot storm surges, so between the pounding rain,flooding,surging waves,loss of power and fires that tri-state area has it’s hands full.With the memory of Katrina still fresh in everyone’s mind, it would not have surprised me if some of the communities were over prepared,but that was not the case.How do you prepare for a 50 ton crane boom hanging 700 feet above the ground.It took a team of experts to figure out how to fasten it so it would not be dangerous,and they succeeded so my hat is off to them.

The estimated damages are between 15 and 20 billion dollars,that is a double edged sword,my best guess is that in that part of the country 90 % of all the property that was damaged by the storm is insured and will be fixed or replaced within the next three years,that is going to be a big boom for all the local General Contractors and heavy equipment operators,unlike Katrina where most of the people living in the ninth ward were just renting. The property owners lived somewhere else and were not very eager to spend money fixing up the damaged property because the memory of all the damage was still fresh in their minds,and no matter what anyone says they are still 29 feet below sea level and the sea is only a half mile away. Even though the hurricane was not the reason the ninth ward flooded,it was the failed levies that caused all of the flooding, but in their minds it was the hurricane that made the levies fail.


It is not a secret that they meet every ten years,but everything else they do is,the most populated country on earth for the first time is reflecting on their population control programs.

The Communists Party has named Xi Jinping as the new leader for the next ten years, every ten years the Communists Party gets together to appoint their leader,the term is for ten years and as far as any one knows the position,once offered has never been turned down,(I have a feeling I know why),experts for weeks were speculating or guessing who was going to get anointed to the top spot.Well,as usual we were surprised,he was not on anyone’s short list,heck some of the experts did not know how to spell or pronounce his name. His name is spelled Xi Jinping, you are on your own when it comes to pronouncing.

The first and most pressing issue is for the first time in quite a while the economy got the hiccups,I would be willing to bet a hundred dollars against a hole in a doughnut that some of the newer members sitting on the leadership council cannot remember a time when China was worried about the economy not growing or not growing fast enough,almost for the last decade China’s biggest problem with regards to the economy has been controlling the growth, in the last quarter their economy took a little dip, and I do mean a little dip,during the second quarter of 2012 their economy grew at a rate of 7.65 % adjusted annually. During the third quarter of 2012 their economy grew at a rate of 7.15 % adjusted annually, does that really sound like the wolves are at the door. Our Fed Chairman and President would be doing handstands and jumping for joy if we were growing at one half that rate,O.K. one half of that would mean our unemployment rate would go from about 8% to about 5%,that means roughly 2 and a half million people would be working instead of not working.

I find this hard to believe but the experts that follow Chinese politics they have more gridlock with their Executive Council and Politburo than we do over here with Democrats and Republicans,ruling by census doesn’t as fast and efficiently as we would like.

The party has stated their primary goal was to wean the country off of investment growth and to increase exports and to also increase domestic consumption,economist I’m not but would you please explain why you want to lessen investment growth (unless they mean “foreign” investment ) China lends the United States around five billion dollars every Monday morning at 9.00 A.M. every week ,week after week, our national debt is over 17 trillion dollars and at least 20 % of our debt is owed to China.Don’t get upset about who we owe the money to, you can get mad at our politicians for the debt, but I’m glad we owe it to China it is a nice security blanket,all of our problems will be settled at the bargaining table O.K. all of them, they do not and will not ever want to settle our disagreements on the battle field. That my friends is a good thing.

The Eurozone is now officially in a recession,( two consecutive quarters ) with no growth, we are joined at the hips with China and Europe,we need are partners to be financially healthy. We want them to come to this country for their vacations,we want them to be able to afford our exports,the news said that in southern Europe the unemployment rate amongst 25 year old males is close to 50 % in some countries.It will not take much of a spark and you will be having rioting in the streets, that is bad and no fun for anyone , the police trying to control the rioters are their friends and neighbors,I hope it does not happen,but all the ingredients are there for one huge explosion. It will not be very enjoyable if you turn on the six o”clock news and they are showing parts of Europe with police dressed in riot gear with fire hoses and attack dogs trying to control the mobs of people who are rioting because no one has a job and no one has any hope of getting a job but they still owe all of these billions of dollars that were spent when they were little kids.

Better late than never I guess, after all these years we finally came to the conclusion that the Russkies are O.K. Jeeeze-looese it is about time,according to the experts the two big winners are going to be Boeing and Caterpillar, with Russia sitting on top of the worlds largest known deposits of oil,gas and gold.They are one of the few countries that can dig their way out of financial problems.Their are many countries that think they can but they cannot. Their is no reason for us to have trade restrictions with Russia , this has nothing to do with national secrets this is nothing more than pure commerce,the more the merrier. And while we are at it we might as well do the same thing with our friend Fidel,we have had an embargo with Cuba for fifty years and what do we have to show for it, nothing but lost revenue, Castro is doing business with someone else, that’s all.

Minnesota’s Departments of Labor and Education gave a grant to the Community College in Biminji to train 227 people to work in the iron ore mines in northern MN, I do not know if this is a heavy equipment training program that modified their program for these people or if is some sort of heavy equipment operators program that has an OJT (on-the-job ) program set up with one or all of the mines up there.

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October 29,2012

Posted by nahetsblog on October 29, 2012


One of the unintended consequence of an improving economy is for the first time since July of 2007 the number of Mexicans (illegal or otherwise ) coming to the United States is more than the number heading south. The numbers are not exact but a research report conducted by the University of Southern California and a Mexican government-sponsored research group using data from both the United States and the Mexican governments and interviews came to this conclusion.For example, in 2000 their was 770,000 that came to the United States (illegal and legal ) in 2010 that number was 140,000 that is a huge difference.


The economy is going to improve slowly through 2013,according to a survey of 48 economist done by the USA TODAY newspaper.But as usual they premise their predictions on the fact that congress does not do anything that will hinder the growth,the economy is expected to grow at a rate of 2.3% that is a modest improvement over this years 1.65 %. The unemployment rate now stands at 7.8% and it is predicted to average 7.6% next year,we have been adding jobs at a rate of about 125,000 per month , next year it is predicted to be about 175,000 jobs per month.Business investment growth is has been 4.2 % over last year, next year that rate is predicted to be about 7.5%. The Fed has promised to keep buying mortgage backed securities and also has promised to keep the short-term interest rates about where they are now.


Due to the high price of a barrel of oil and the new technologies for extracting the oil we have been increasing our production by about 7 or 8 percent per year and at this rate we are going to surpass Saudi Arabia either in 2013 or 2014,that is assuming that Saudi Arabia keeps their production where it is right now.The boom has surprised everyone, including the experts.The Energy Department has predicted that next year crude production should hit 11.4 million barrels per day,that is just below the Saudies production of 11.6 million barrels per day.Even with the increases over the last four years we still are not even close to what we consume,current consumption is just a little over 18 million barrels per day.Even though the increase in domestic production has not shown up at the pump it has created a lot of jobs,a lot,and how do you know it has not showed up at the pump? one year ago the pundits were predicting that because of the election this fall and that the Obama administration was touting the green energy that we were going to be paying $4.50 to$5.00 per gallon this summer,and that has not happened,so maybe we have seen it at the pump we just do not know it.

One of the biggest reasons we are seeing an increase domestically is our new found ability to get oil out of rock that used to be to difficult or impossible,to free the oil and gas out of the rock they use a technique called "fracking" that is where they pump water,sand and chemicals into the well,this fracking method has unlocked enormous amounts of oil and gas.This long period of high prices has given the drillers the motivation they need to expand and search for new areas.

These increases have been a boom for the local economies,the states that have seen the biggest boom are North Dakota,Oklahoma,Wyoming,Montana and Texas,after BP oil spill in the gulf the production waned,it is now starting to climb back to where it was.The two states that have the most shale that can be fracked are North Dakota and Texas.

One concern that some people have is the long term effects of fracking are unknown, their is a concern that some of the chemicals that are used in that method could end up in the water table,it might be years before we find out.

Caterpillar known as a bellwether company for judging the health of the worlds mining and heavy equipment construction has three main sectors in their business,heavy equipment,mining and power services, lately they have made huge investments in their mining and equipment sectors.

99.99% of the time it does not matter whether the President is a Democrat or a Republican,but when it comes to education it does matter. Democrats tend to care more about the blue collar jobs then their counter-parts.Republicans tend to care more about the 2 and 4 year schools, CDL schools,welding schools,heavy equipment operators schools or heating & air conditioning repair schools will be better off with a Democrat than a Republican,of course that is my opinion.

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October 22,2012

Posted by nahetsblog on October 21, 2012


Being in the middle of any election cycle,and a Presidential one that is getting ugly the rumors had already started before the ink was dry on the morning papers. CONSPIRACY that is what the anti-OBAMA people are claiming now,the official percent went from 8.1 percent down to 7.8 percent.The 7.8 percent is nothing to brag about,but what makes that number so special is this is the first time since Barak Obama has been elected President that it has been below 8.0 percent and during the last Presidential race Barak Obama had promised everyone that he would make sure the unemployment rate would be below 8%during his first term in office and sure enough thirty days before election day it is 7.8 percent..


The worlds largest mining and construction equipment manufacturer has announced that its sales and per share profit for the year 2015 needs to be adjusted down about 12 percent in both categories,Caterpillar announced Friday that the gross sales and dollars per share net income were a little to optimistic,so they needed to correct them.Thirty days ago when they held a press conference and issued a press release making the 2015 forecasts I joked that the real reason they were so optimistic about their revenue and profits were to hide the 3% price increase across the board,which they announced at the same press conference,does anybody really care what Caterpillar thinks their dollars per share is going to be three years from now.I can remember a quip from the 1960’s that went something like this,"If General Motors catches the flu,the rest of the economy sneezes" that,s close I might be paraphrasing a little but you get my point.I know Caterpillar is one of the bellwether companies they use to measure the DOW Industrial Average,but do the other companies that make up the DOW Industrial forecast their sales and profits three years into the future,that 2015 sales/revenue forecast that Caterpillar made came on the coattails of China forecast that they were going to update,repair,modernize,fix all of their runways,bridges,railroad bridges and interstate highway system over the next ten to fifteen years and the total could be close to a trillion dollars,and OH by the way General Motors went b.k. four years ago and a whole bunch <millions of people> got stiffed some of the share holders or bond holders or vendors <depending on your classification> will get somewhere between zero and 33% of what they had coming.Their are some pundits that look at Caterpillars profitability as a reflection of the worlds economic health.


Depending on which measuring stick you use,CA is one of the five worst states in regards to A) number of homes in the foreclosure process B) number of homes underwater C) percentage of homes at their all time high or within 2%D) All of the above.This could almost be the tail of two cities,it is the worst of times and it is the best of times.California has a huge disparity in wealth,their are areas that are doing terrible economically and you can drive thirty miles down the street and find areas that are doing way better than the average.Three out of the last six months CA led the nation in the number of new jobs created,two out of the last four months CA led the country in highest percentage of private/public money spent in major construction projects.

The National Association of Home Builders (NAHB) reported that out of the 337 largest metropolitan areas the construction employment went up in 191 of them went down in 88 of them and remained the same in the rest, the 57 % that saw an increase in construction employment is the third time in the last six months that the number of areas that saw an increase was above 50 % NAHB The Department of Labor said that their is not going to be hearings scheduled regarding the Keystone XL project until after the next president is sworn in.If that project is started before January 2014 I,ll eat my hat.

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October 20, 2012

Posted by nahetsblog on October 19, 2012


A recovery in home construction is finally building enough strength to help the economy instead of dragging it down.It is about time,the home construction business showed huge numbers in September,August housing starts were up 11.2 percent over July and the Commerce Department came out with a report last Thursday that showed September with 15 percent over August, that is for all four regions,even though the northeast was the worst, the other three made up for it.The National Association of Home Builders ,NAHB. said that the last quarter has showed slow but steady growth and now they are showing fast and steady growth,

Housing typically leads us out of the recession,and the only reason it did lead us out of this one is this recession has been the only one that was caused by housing,the housing bubble that burst in the last half of 2008 is what caused what most economist refer to as the biggest recession since the great depression,some areas of the country saw 40 to 50 percent of homeowners equity go poof in thirty days,that hurts,best estimates now are less than 20 percent of current homeowners are underwater with their bank,that is half of what it was five months ago.

Home construction is closely watched because it is labor intensive and most economists feel that for every two houses that are built creates one fulltime job.That cannot be proven or disprovened absolute perfect for most economist,that just the way they like it,heck,most of them cannot even me a Monday morning quarterback,their batting averages on their predictions is akin to the third basemen for my Yankees,he gets 29 large and he batted a buck twenty in the playoffs,and here is a real kick in the pants,in the clutch they sat him down for a forty year old part timer. Imagine that,37 years old and they bench you for a guy who is forty but he still gets his 29 million dollars every year for the next four years.

Last year was the worst year for new housing starts since they started keeping tract,434,000 new homes were built in 2011,so far this year we are on pace to pass that number by at least 21 percent.NAHB predicts increase of 21 to 25 percent increase over the next 6 months.


U.S. home prices are starting to inch up, after getting the bejeeza beat out of the prices over the last five years finally they are going up,not all over the country but in a lot of places where they have been stagnant for years.More than a 100 metropolitan areas our over their all time high and 50 areas are currently within 2 percent of their all time high.That,s nice,some examples of the ones that are higher than they have ever been Austin,TX,Denver and Boulder CO,Indianapolis IN,and Portland MN. Many of the cities that are close to their peak now never had the huge swings in the prices in the first place,so they did not have far to go to get to their peak.Other markets that are close have been driven by their local economies,energy and agriculture did not suffer as bad as other areas.

Nationally the July price was 1.2 percent above one year ago,August was 4.4 percent above one year ago and September is expected to exceed August,so with the auto sales having a fantastic quarter for United States and Canada most of the economic indicators are pointing up,finally.


Americans spent more money at the retailers in September, that surge is a reflection of their confidence,the 1.1 percent advance is followed by a revised 1.2 percent for August,those two month,s are the biggest uptick we have seen sinceOctober 10.

A huge drop in joblessness and a firming up on the price of homes and we are starting to see the consumer confidence index go up,many Americans are reducing their debt loads in lieu of spending,builders are extremely concerned with their debt load and businesses are cautious about hiring and raises,so who is going to blink first,the consumers are waiting for the businesses to start hiring and expanding along with upping the ante on the pay scale and the businesses are waiting for the consumer to start spending their money like a drunken sailor on a Saturday night shore leave.

For most of us our home is our most valuable asset,with less than 20 percent of them underwater and the prices starting to inch up the economists are waiting for a spark to ignite the sales rally in the housing market,thats not going to happen,regardless of which direction the indexes are pointing the bubble bursting is fresh in every ones memory,and painful,what is the difference between a recession and a depression? a recession is when your neighbor loses his job,a depression is when you lose your job.That might seem a wee bit sarcastic but it really is true.

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