The Building Tradesman Newspaper

Friday, September 29, 2006

News Briefs

By The Building Tradesman

Johnson to lead state pipe trades
Mark Johnson, business manager of Plumbers and Pipe Fitters Local 370 in Flint, was elected President of the Michigan Pipe Trades Association at their quarterly meeting on Sept. 9 in Traverse City.

Johnson will fill the remaining nine months in the term of Jim Davis, who has retired from that post and will retire later this year from his position as business manager of Plumbers and Pipe Fitters Local 333 in Lansing. Next June, the state pipe trades president position will be up for a two-year term.

The Michigan Pipe Trades Association conducts quarterly meetings around the state for pipe trades union delegates. One of the association's primary functions is to advocate for state and local piping laws that will improve the industry. One item the association is currently lobbying for is to establish a state mechanical licensing requirement for pipe fitters.

The Michigan Pipe Trades Association presidency is part-time, and Johnson will continue in his post as the business manager of Local 370, which he has held since 1998.

"I'm looking forward to working for the association in this new capacity. It's a privilege and an honor to represent the Pipe Trade members in the State of Michigan," Johnson said.

Nonunion wage hikes spurred by shortages
Wages for nonunion U.S. building trades workers are projected to see a 4.3 percent hike this year, and could go as high as 5 percent by the end of the year.

Driving the increases: manpower shortages in Gulf Coast states brought on by hurricane damage, according to PAS Inc., via the Construction Labor Report.

For unionized construction workers in the U.S., collectively bargained wage/benefit increases are expected to dip from 3.9 percent last year to 3.7 percent this year, according to the Construction Labor Research Council.

The biggest wage/benefit hike for organized construction workers in recent years was 4.3 percent in 2002. As of last year, unionized construction workers enjoyed a $343 per week pay advantage over their nonunion counterparts.

Nonresidential work leads jump in U.S.
The years-long boom for U.S. residential construction is decelerating, but the nonresidential construction sector is experiencing a nice jump. And overall construction is up a bit for the first eight months of 2006 compared to the same period a year ago.

"Twin economic reports today show how much vigor private nonresidential construction has," said Ken Simonson, chief economist for The Associated General Contractors of America (AGC). He was referring to recent reports from the Sept. 1 the Bureau of Labor Statistics and from the Census Bureau.

He continued, "for the first seven months of 2006 compared to the same period of 2005, private nonresidential spending has risen an impressive 16 percent and public construction 10 percent. Even residential construction is still four percent ahead of last year's total for the first seven months, although I don't expect the final residential total for the year to be up."

The greatest surges among construction sectors include lodging, up 46 percent in 2006; multi-retail - up 38 percent; hospitals, up 27 percent, and manufacturing, up 24 percent.

Simonson predicted a "sharply falling" market for single-family and condominium construction.

Meanwhile, Reed Construction Data - one of a handful of companies that watch these things - reports that from January through August 2006, the value of construction starts rose 9.2 percent, compared to the same period in 2005. However, allowing for inflation of the cost of building materials, the real value only rose 2 percent.

"The slowdown in residential starts has already begun to moderate project cost inflation in the balance of the construction market," Reed said, "especially for lumber, gypsum and plastic products. However, the slowdown will have only a marginal negative impact on the demand for non-residential space and structures.

Similarly, the slowing of overall economic growth from 3.5% to 2.5%-plus is already moderating cost increases, especially for oil-based products and wages, but will
not cause significant project cancellations."