Shortage of workers

Skilled labor shortages and supply chain issues are the two biggest issues plaguing construction businesses. When attendees of the webinar were polled, 52% said that skills and worker shortages were the leading challenges for their companies at present, followed by another 37% who said that supply chain delays were their biggest issue.

Skilled labor shortages aren’t new in construction, but Basu said that the demand for labor will only increase as time goes on. Construction companies will soon be busier than ever as evidenced by the Architecture Billings Index, which tracks how busy architecture firms are. The majority of attendees, when asked about their backlog, said that it has risen within the past three months, and when asked about their projections for their next year’s profits, the majority said they expected it to rise slightly higher or remain about the same.

Basu said that with older members of the workforce retiring, roles formerly filled by those with decades of experience will become vacant, further shrinking the number of employed workers.

However, there are some signs of life in pockets around the United States. The top four geographic areas of employment growth from February 2020 are centered in the Midwest, in metropolitan areas such as Minneapolis, Detroit, St. Louis and Chicago, according to the U.S. Bureau of Labor Statistics Current Employment Statistics survey for May 2021. Basu said that it was “very surprising” that the markets were in the Midwest, and not elsewhere like the South or the West.

Overall, from February 2020 to April 2021, there has been a 2.9% decline in construction employment, but Basu said it is rebounding quickly.

High prices of construction material

As the construction industry rebounds, the prices of many building materials are reaching historically high levels.

In June, softwood lumber increased 125% year over year, according to the BLS, while overall price peaked in early May at more than $1,700 per thousand board feet. However, the price has dropped considerably in the past two months.

Basu predicted that much of the inflation that raised these prices isn’t permanent, but he also said that he didn’t expect the prices to come down anytime soon. Nevertheless, Basu concluded that the price was trending downward.

Basu said that eventually the market would even out, and with the high demand and prices for these materials, suppliers would up their productivity and capacity, which would in turn create more materials, driving down the cost.

“The cure for high prices is high prices,” Basu said.

Most recently, the Highland Park home was available for $2.1 million—which is less than the $2.25 million Pippen paid for the place in 2004.

“Builders are contending with shortages of building materials, buildable lots and skilled labor as well as a challenging regulatory environment,” Robert Dietz, the association’s chief economist, said in the report.

Index readings over 50 are a sign of improving confidence. Last year, the index quickly dropped below 50 in April and May as the pandemic began, but confidence rebounded as many Americans opted to resume their search for a new home last summer.

What happened: The main index is based on three underlying indices and regional indices. The index that gauges the traffic of prospective buyers saw a pronounced decline, dropping six points to 65. Another index, which measures current sales conditions, fell one point to 86, while the index of sales expectations over the next six months actually increased two points to 81.

Regionally, the only part of the country that didn’t see a drop in confidence was the South, where it held steady at the same level as in June. Confidence fell the most in the Northeast, where the index fell four points to 75.

What they’re saying: “Apart from the higher readings during the fourth quarter of last year, this is the highest range since the home builders’ survey started in 1985,” said Michael Gregory, deputy chief economist at BMO Capital Markets, in a research note.

Market reaction: Home-builder stocks, including Lennar Corp., Toll Brothers Inc.,  D.R. Horton Inc., and PulteGroup Inc., experienced declines Monday morning, roughly in line with the S&P 500 Index and the Dow Jones Industrial Average.

96% contractors reported they are on the path to digital transformation, and already have a strategy in place to execute this. For both owners and contractors, data analytics, project management software and operations and maintenance solutions are among the technologies respondents feel their organization should invest more in over the next five years.

Owners responding to the survey said they expect better risk management, higher productivity and organizational efficiency or cost savings as a result of investment in digital technologies.

Confidence in the construction industry remains high, especially in the U.S. Recent legislative initiatives, such as the American Jobs Plan and American Rescue Plan, are expected to translate into significant capital project spending on infrastructure.

Nevertheless, gaps remain between where the industry is today and where it wants to be in its technology adoption, according to the study.

For true digital transformation, it is critical to have a widespread rollout of enterprise-level mobile software that can make productivity improvements and collect and connect data, according to the report. One of the key barriers to this hardware. Although many on-site workers can access applications on their personal phones, they may be hesitant to make space for an enterprise-level platform on their device.

Owners and contractors face a number of other challenges in technology adoption. About 45% of owners and 35% of contractors identify difficulty of integration with current systems as a barrier to investment, while 32% and 39% are concerned about difficulty of implementation.

The burden is on technology providers to “make a compelling business case and smooth the implementation path for their solutions,” according to the report. Many of these firms are gearing up to do just that, as recent rounds of funding show.

The two companies have collaborated on Nexii’s Squamish, Hazelton and Vancouver Island plants. Their most recent work together was on the Courtyard by Marriott hotel in Nanaimo, British Columbia, currently under construction with development partner PEG.

Earlier this year, Nexii designed and manufactured a British Columbia Starbucks store (shown above) that was assembled and built on site in six days.

An alternative to cement and concrete, Nexii’s roof, floor and wall panels create a thermally efficient, airtight envelope, according to the company. The insulated panels are coated on both sides with a material the company calls Nexiite, which is made of sand and other “readily-available” materials, CEO Stephen Sidwell told On-Site magazine, creating a building system that is waterproof and fire resistant.

“The Nexiite is both the interior and exterior finishing and is structural,” Sidwell told On-Site. “So, it’s a completely different methodology of construction.”

With the acquisition, the leadership of Nexii and Omicron will be unchanged: Sidwell remains as CEO of Nexii, and Bill Tucker will continue to lead the Omicron team as CEO; however Tucker will also step into the role of executive vice president of operations, A&E and assembly at Nexii to help align processes, teams and key operations, according to the release.

“Omicron was one of the early shareholders to understand the potential of Nexii and invest in the company because we recognized the power of their innovative technology,” Tucker said in the release. “Today, we take our valuable partnership one step further, combining our teams and processes to deliver faster, greener, more efficient projects for all our clients.”

A new Freedonia Group analysis finds that demand for outdoor living products surged more than 8% in 2020. Plus, recent data from the NKBA, Fixr, Brown Jordan Outdoor Kitchens, and Wayfair Professional reveals the majority of homeowners are now more interested—and more willing to invest—in updating their outdoor living spaces than they were prior to the pandemic.

So the following 5 features that homeowners would love to have in their Dream home in 2021.

1. Built-in entertainment: To enhance the outdoor kitchen and dining, some homeowners opt for integrated entertainment, including built-in speakers and mounted televisions. NKBA data says 48% of homeowners rank the option as a top need for their space, but also makes another interesting point: Those designing for millennials note there’s more interest for the integrated entertainment (63%) than outdoor kitchens (43%).

2. Protection from the elements: While kitchen and fire areas can help create the ideal exterior room, they can be hard to utilize in the rain, snow, or other weather-related events. As a result, 55% of NKBA professionals note that weather protection is also an important outdoor living feature. Fixr respondents agree and say 48% of outdoor spaces will be adapted to year-round use, with 27% adding hard patio covers like pergolas and 4% utilizing soft patio covers like awnings.

3. Gardens grow in popularity: Although not in the top three features, gardening and yard maintenance are also activities that have seen an increase since the onset of the pandemic. Twenty-six percent of adult respondents to the August 2020 edition of The Freedonia Group survey report they started a food garden because of the pandemic. Wayfair Professional also touches on the trend, with garden greenhouse searches nearly tripling and raised garden bed searches up 75%.

4. Outstanding outdoor kitchens: Of all the exterior home details, outdoor kitchens reign supreme. Fixr’s 2021 Trends for Outdoor Living Spaces states 61% of respondents rank outdoor kitchens as the most popular feature. The NKBA reports similar popularity with its respondents (60%), and the Brown Jordan Outdoor Living Report says 65% of American homeowners aged 35 to 44 cite a full outdoor kitchen as very important if they were designing an outdoor space.

5. Fire features are hot: Whether gas or wood-burning, fireplaces, fire pits, and fire tables are considered a must-have for today’s outdoor living spaces. The Brown Jordan report states 66% of homeowners think a fire pit is an important feature. NKBA’s outdoor living data says 60% rank fireplaces and fire pits as a top option, and Fixr’s surveyed professionals vote fire pits as the second most popular outdoor living feature, right behind outdoor kitchens.

Of the forms mentioned above, 12 or rather the 2/3 of the companies paid even lower than the statutory rate.

These firms tool leverage of some provisions to reduce their taxes, 4 of the most important have be elucidated below.

1. Stock compensation       

Of the 12 companies in Construction Dive’s analysis that paid less than the statutory corporate rate in 2020, nearly all of them took advantage of writing off stock-based compensation to employees.

This usually involves companies granting executives stock options — the right to purchase shares at a fixed price in the future.

For example, a company could give an executive the right to purchase 1 million shares of stock at $10 each, for a period of 10 years. If the firm’s stock price is trading at $50 when the executive exercises that right, the company can write down the full value of those shares — $50 million — on its taxes.

2. Loss carryforwards and carrybacks

Another tax break that can help lower what a firm owes the government is the net loss carryforward. That allows companies to use an excess past loss, when they owed little or nothing in taxes, in a future year when they make money and may owe more. Such losses can be carried forward indefinitely.

For example, Ron Ballschmiede, chief financial officer at The Woodlands, Texas-based Sterling Construction Co., explained in an email how the firm applied losses from as long ago as 2011 to offset profits now in order to get its effective federal tax rate down to zero in 2020, the second year in a row it did so.

3. 179D Energy Efficiency Deduction

Another deduction particularly applicable to construction companies is the 179D incentive, which allows eligible builders to claim a tax deduction of up to $1.80 per foot for installing qualifying energy-efficient systems in buildings. First established in 2006, it was recently made a permanent program as part of the Consolidated Appropriations Act of 2021 signed into law on December 27, 2020.

Jacobs took a $7.3 million deduction under the rule, while Comfort Systems USA claimed $1.1 million.

4. Depreciation on assets

The intensive capital investments construction companies make are one of the main avenues that result in lower taxes for these firms, according to Andrew Kahn, a certified public accountant who specializes in construction finances at Bethlehem, Pennsylvania-based advisory firm Concannon Miller.

“The reason their effective rate is lower than 21% is due to the favorable depreciation write-off provisions,” Kahn said. “So if you’ve got a construction company and you add $5 million in new assets — say by buying machinery, equipment and vehicles — those assets get written off.”

The controversy first started in 2019 when the town of Hillsborough, Calif., said they were receiving complaints from neighbors and residents over a home’s “eyesore” lawn decorations. The owner of what’s been labeled the “Flintstone House” had statues covering the front and backyard, including a 15-foot dinosaur and cartoon sculptures of the Flintstone characters. A sign also read “Yabba Dabba Doo,” Fred Flintstone’s exuberant exclamation at 5 o’clock each day. The town argued the lawn ornaments violated building codes and the owner had added them without the proper permits.

After homeowner Florence Fang failed to comply with orders to remove her collection of statues, the town took her to court in San Mateo County. The town requested the judge deem the property a public nuisance and have the statues removed. Fang countersued, arguing she was discriminated against based on her race (Fang is Chinese American). Fang argued in the lawsuit that the town denied her the right to build on her property and enforced building codes that did not apply to her home.

Fang reportedly will receive $125,000 from the town to cover legal costs from her lawsuit in the legal settlement reached. Fang has agreed to dismiss her claims of racial discrimination. She also must apply for building permits for the exterior of the home, which will be approved after submission, the Los Angeles Times reports.

“The parties have reached an amicable resolution of the case to the satisfaction of all parties, such that the improvements made to the Flintstone House will be permitted to remain,” the settlement reads, as reported by the Palo Alto Daily Post.

The dispute over the statues has drawn international news coverage. The settlement was reached earlier this year, but details of the agreement were just recently released.

The orange and purple “boulder-like” home is located in a neighborhood south of San Francisco. Fang had purchased the home in 2017 for $2.8 million.

Since about 1900, the Black Canyon and nearby Boulder Canyon had been investigated for their potential to support a dam that would control floods, provide irrigation water and produce hydroelectric power. In 1928, Congress authorized the project. The winning bid to build the dam was submitted by a consortium called Six Companies, Inc., which began construction of the dam in early 1931. Such a large concrete structure had never been built before, and some of the techniques were unproven. The torrid summer weather and lack of facilities near the site also presented difficulties. Nevertheless, Six Companies turned the dam over to the federal government on March 1, 1936, more than two years ahead of schedule.

Hoover Dam impounds Lake Mead, the largest reservoir in the United States by volume (when it is full). The dam is located near Boulder City, Nevada, a municipality originally constructed for workers on the construction project, about 30 mi (48 km) southeast of Las Vegas, Nevada. The dam’s generators provide power for public and private utilities in Nevada, Arizona, and California. Hoover Dam is a major tourist attraction; nearly a million people tour the dam each year. The heavily traveled U.S. Route 93 (US 93) ran along the dam’s crest until October 2010, when the Hoover Dam Bypass opened.

Background

As the United States developed the Southwest, the Colorado River was seen as a potential source of irrigation water. An initial attempt at diverting the river for irrigation purposes occurred in the late 1890s, when land speculator William Beatty built the Alamo Canal just north of the Mexican border; the canal dipped into Mexico before running to a desolate area Beatty named the Imperial Valley. Though water from the Imperial Canal allowed for the widespread settlement of the valley, the canal proved expensive to operate. After a catastrophic breach that caused the Colorado River to fill the Salton Sea, the Southern Pacific Railroad spent $3 million in 1906–07 to stabilize the waterway, an amount it hoped in vain would be reimbursed by the federal government. Even after the waterway was stabilized, it proved unsatisfactory because of constant disputes with landowners on the Mexican side of the border.

As the technology of electric power transmission improved, the Lower Colorado was considered for its hydroelectric-power potential. In 1902, the Edison Electric Company of Los Angeles surveyed the river in the hope of building a 40-foot (12 m) rock dam which could generate 10,000 horsepower (7,500 kW). However, at the time, the limit of transmission of electric power was 80 miles (130 km), and there were few customers (mostly mines) within that limit. Edison allowed land options it held on the river to lapse—including an option for what became the site of Hoover Dam.

In the following years, the Bureau of Reclamation (BOR), known as the Reclamation Service at the time, also considered the Lower Colorado as the site for a dam. Service chief Arthur Powell Davis proposed using dynamite to collapse the walls of Boulder Canyon, 20 miles (32 km) north of the eventual dam site, into the river. The river would carry off the smaller pieces of debris, and a dam would be built incorporating the remaining rubble. In 1922, after considering it for several years, the Reclamation Service finally rejected the proposal, citing doubts about the unproven technique and questions as to whether it would, in fact, save money.

Planning and agreements

In 1922, the Reclamation Service presented a report calling for the development of a dam on the Colorado River for flood control and electric power generation. The report was principally authored by Davis, and was called the Fall-Davis report after Interior Secretary Albert Fall. The Fall-Davis report cited use of the Colorado River as a federal concern because the river’s basin covered several states, and the river eventually entered Mexico. Though the Fall-Davis report called for a dam “at or near Boulder Canyon”, the Reclamation Service (which was renamed the Bureau of Reclamation the following year) found that canyon unsuitable. One potential site at Boulder Canyon was bisected by a geologic fault; two others were so narrow there was no space for a construction camp at the bottom of the canyon, or for a spillway. The Service investigated Black Canyon and found it ideal; a railway could be laid from the railhead in Las Vegas to the top of the dam site. Despite the site change, the dam project was referred to as the “Boulder Canyon Project”.

With little guidance on water allocation from the Supreme Court, proponents of the dam feared endless litigation. Delph Carpenter, a Colorado attorney, proposed that the seven states which fell within the river’s basin (California, Nevada, Arizona, Utah, New Mexico, Colorado and Wyoming) form an interstate compact, with the approval of Congress. Such compacts were authorized by Article I of the United States Constitution but had never been concluded among more than two states. In 1922, representatives of seven states met with then-Secretary of Commerce Herbert Hoover. Initial talks produced no result, but when the Supreme Court handed down the Wyoming v. Colorado decision undermining the claims of the upstream states, they became anxious to reach an agreement. The resulting Colorado River Compact was signed on November 24, 1922.

Legislation to authorize the dam was introduced repeatedly by two California Republicans, Representative Phil Swing and Senator Hiram Johnson, but representatives from other parts of the country considered the project as hugely expensive and one that would mostly benefit California. The 1927 Mississippi flood made Midwestern and Southern congressmen and senators more sympathetic toward the dam project. On March 12, 1928, the failure of the St. Francis Dam, constructed by the city of Los Angeles, caused a disastrous flood that killed up to 600 people. As that dam was a curved-gravity type, similar in design to the arch-gravity as was proposed for the Black Canyon dam, opponents claimed that the Black Canyon dam’s safety could not be guaranteed. Congress authorized a board of engineers to review plans for the proposed dam. The Colorado River Board found the project feasible, but warned that should the dam fail, every downstream Colorado River community would be destroyed, and that the river might change course and empty into the Salton Sea. The Board cautioned: “To avoid such possibilities, the proposed dam should be constructed on conservative if not ultra-conservative lines.”

On December 21, 1928, President Coolidge signed the bill authorizing the dam. The Boulder Canyon Project Act^[23] appropriated $165 million for the project along with the downstream Imperial Dam and All-American Canal, a replacement for Beatty’s canal entirely on the U.S. side of the border. It also permitted the compact to go into effect when at least six of the seven states approved it. This occurred on March 6, 1929, with Utah’s ratification; Arizona did not approve it until 1944.

Construction

Soon after the dam was authorized, increasing numbers of unemployed people converged on southern Nevada. Las Vegas, then a small city of some 5,000, saw between 10,000 and 20,000 unemployed descend on it. A government camp was established for surveyors and other personnel near the dam site; this soon became surrounded by a squatters’ camp. Known as McKeeversville, the camp was home to men hoping for work on the project, together with their families. Another camp, on the flats along the Colorado River, was officially called Williamsville, but was known to its inhabitants as “Ragtown”. When construction began, Six Companies hired large numbers of workers, with more than 3,000 on the payroll by 1932 and with employment peaking at 5,251 in July 1934. “Mongolian” (Chinese) labor was prevented by the construction contract, while the number of black people employed by Six Companies never exceeded thirty, mostly lowest-pay-scale laborers in a segregated crew, who were issued separate water buckets.

As part of the contract, Six Companies, Inc. was to build Boulder City to house the workers. The original timetable called for Boulder City to be built before the dam project began, but President Hoover ordered work on the dam to begin in March 1931 rather than in October. The company built bunkhouses, attached to the canyon wall, to house 480 single men at what became known as River Camp. Workers with families were left to provide their own accommodations until Boulder City could be completed, and many lived in Ragtown. The site of Hoover Dam endures extremely hot weather, and the summer of 1931 was especially torrid, with the daytime high averaging 119.9 °F (48.8 °C). Sixteen workers and other riverbank residents died of heat prostration between June 25 and July 26, 1931.

The Industrial Workers of the World (IWW or “Wobblies”), though much-reduced from their heyday as militant labor organizers in the early years of the century, hoped to unionize the Six Companies workers by capitalizing on their discontent. They sent eleven organizers, several of whom were arrested by Las Vegas police. On August 7, 1931, the company cut wages for all tunnel workers. Although the workers sent the organizers away, not wanting to be associated with the “Wobblies”, they formed a committee to represent them with the company. The committee drew up a list of demands that evening and presented them to Crowe the following morning. He was noncommittal. The workers hoped that Crowe, the general superintendent of the job, would be sympathetic; instead, he gave a scathing interview to a newspaper, describing the workers as “malcontents”.

On the morning of the 9th, Crowe met with the committee and told them that management refused their demands, was stopping all work, and was laying off the entire work force, except for a few office workers and carpenters. The workers were given until 5 p.m. to vacate the premises. Concerned that a violent confrontation was imminent, most workers took their paychecks and left for Las Vegas to await developments. Two days later, the remainder were talked into leaving by law enforcement. On August 13, the company began hiring workers again, and two days later, the strike was called off. While the workers received none of their demands, the company guaranteed there would be no further reductions in wages. Living conditions began to improve as the first residents moved into Boulder City in late 1931.

A second labor action took place in July 1935, as construction on the dam wound down. When a Six Companies manager altered working times to force workers to take lunch on their own time, workers responded with a strike. Emboldened by Crowe’s reversal of the lunch decree, workers raised their demands to include a $1-per-day raise. The company agreed to ask the Federal government to supplement the pay, but no money was forthcoming from Washington. The strike ended.

Recognition:

Hoover Dam was recognized as a National Civil Engineering Landmark in 1984. It was listed on the National Register of Historic Places in 1981, and was designated a National Historic Landmarkin 1985, cited for its engineering innovations.

The towers’ design draws upon Istanbul’s cultural heritage and historic architecture in a modernized context. The buildings’ curved profile, along with the podium, pay homage to the Tughra, a traditional Ottoman calligraphic signature. Both buildings are designed as separate but interconnected structures through the unifying podium. The common entrance includes an eight-storey atrium with a pebble-like form of the Ziraat Bank’s auditorium and conference center.

The towers rise up to 40 and 46 storeys, and have been designed to promote employee comfort and wellbeing. Amenities include prayer rooms, naturally ventilated areas, and balcony break out spaces with greenery. Double-height atria were incorporated in the design to create different working environments that encourage social interaction across floors. Bridges are also implemented, crossing the atrium at multiple levels to create visual and physical links.