Cold weather and the housing slowdown put a damper on nationwide construction jobs in February according to the Associated General Contractors of America, but nonresidential segments should rebound this month.  February included a week of ice storms across much of the U.S. whereas January had an exceptionally balmy week.  As a result, some contractors may have started jobs in January that normally would have been postponed until later in the spring, then postponed hiring during the freeze.  One sign that nonresidential construction will resume growth is the fact that architectural and engineering firms have seen a 5 percent increase in job growth over the past year, and their work turns into construction within a few months.  Meanwhile, nonresidential construction spending is up 15 percent over last January.  The AGC concludes that nonresidential construction will be healthy through 2007, and probably beyond.

Fees for construction management and program management services increased from 5% of a typical project in 2000 to 5.7% in 2007, according to a recent Construction Management Association of America survey. During the same period, operating income for CM/PM firms dropped, showing that costs rose more quickly than fee income. Healthcare and education sectors offered the lowest media feeds while highway and bridge construction offered the highest. The survey cited a tightening labor market, aging workforce and aging infrastructure as factors leading to a growing reliance on outsourced CM/PM services.

The U.S. House has approved a bill authorizing $14 billion over four years for sewage treatment plant construction around the country, according to ENR. This marks the first reauthorization of the Clean Water Act revolving fund program to clear the House since 1995. Although the measure was scaled back from a $20-billion, five-year
version approved by the House Transportation and Infrastructure Committee in February, the White House said that
President Bush’s senior advisors would recommend he veto the bill, calling the funding levels “excessive” and “unrealistic in the current fiscal environment.”

While residential construction fell two percent last year, private commercial construction went up 16 percent and public construction 10 percent, according to the US Census Bureau. The Christian Science Monitor’s Ron Scherer reports that new hotel construction was up 52 percent over 2005, factory construction 20 percent and office building rose 18 percent. Commercial construction has even absorbed many residential construction workers. Last month, 80,000 jobs were lost in residential construction while commercial contractors hired 180,000 workers.

Expansion Magazine has released their ninth annual “America’s 50 Hottest Cities” list and St. Louis made the cut. Cities were listed alphabetically, not in rank order.

The list is based strictly on perceptions rather than cold, hard data, according to managing editor Ken Krizner. The publication polled 80 prominent site location consultants on their choices for the nation’s best cities for expanding and relocating companies. Consultants ranked metro areas according to business environment, work force quality, operating costs, incentive programs, work force training programs, and the ease of working with the local political and economic development community.

All 362 Metropolitan Statistical Areas were considered, so the cities that make America’s 50 Hottest Cities are in the top 14 percent of all U.S. metro markets. In the eyes of premier site location consultants, these metro areas are top choice.

The St. Louis MSA includes the City of St. Louis, St. Louis County, the Missouri counties of Saint Charles, Jefferson, Franklin, Lincoln and Warren, and the Illinois counties of Madison, Saint Clair, Clinton, Monroe and Jersey.

Reference: Expansion Magazine Online

Although the Bureau of Labor Statistics’ December Producer Price Index reported construction materials cost were down in November, the Associated General Contractors of America’s Chief Economist Ken Simonson says that trend is not likely to last.

According to Simonson, costs are likely to be higher for construction than for the economy as a whole over the next 12 months.

In November, prices for diesel fuel, asphalt, plastic construction products, lumber and plywood, gypsum products and steel and copper products declined, mostly because of the slowdown in home construction. But prices continued to increase for most concrete products, brick, and aluminum mill shapes. Petroleum, cement and metal prices remain at record high levels.

Reference: Rock Products