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 February 27, 2014 | Volume 6, Issue 4
In This Issue
ABC Partners with Merit Canada
Legislative Day - Early Bird Rate Expires 3/3
New Domain Names for Construction Websites
Road Funding Increases Planned
Economic News: CBI Hits Post-Recession High
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Construction Associations Partner in Support of the Merit Shop Philosophy

Associated Builders and Contractors (ABC) and Merit Canada Feb. 13 signed a joint resolution outlining their partnership agreement and commitment to free enterprise and the merit shop philosophy, under which construction contracts are awarded to construction companies based on merit.

 

"ABC is thrilled to be working hand in hand with the Merit Canada to promote the merit shop philosophy and free enterprise," said 2014 ABC National Chairman Dan Brodbeck, president and CEO of Compass Partners, LLC. "Together, we can address key issues relevant to construction contractors in North America, including developing our workforce and ensuring each worker returns home to his or her family at the end of the day by working toward world-class safety on every jobsite."

 

"This joint resolution with ABC is a great opportunity to engage in cross-border cooperation to further our goals on important North American construction industry issues such as safety and workforce development," said Merit Canada President Terrance Oakey. In the joint resolution, both ABC and Merit Canada commit to:

  • Support the merit shop and free-enterprise philosophies;
  • Improve the construction industry and help contractors provide rewarding long-term careers for their employees in the construction industry;
  • Encourage and promote the safety and welfare of all employees in the construction industry;
  • Support government policies that encourage and facilitate the awarding of contracts without regard to protectionism;
  • Increase international business opportunities for firms and reduce barriers to the employment of workers outside their home countries should be reduced;
  • Provide services to the construction industry in both Canada and the U.S.; and
  • Work together to facilitate more effective service delivery for their respective members.
ABC of Michigan President Chris Fisher was a part of the ABC team that worked with Merit Canada representatives to outline the partnership.
Legislative Day - Early Bird Rate Expires 3/3
If you've been thinking about registering for ABC of Michigan's March 19th Legislative Day, featuring Governor Rick Snyder, US Senate Candidate Terri Lynn Land, more than 20 lawmakers, and other special guests, wait no longer! The early bird rate expires on March 3, and our seating capacity is limited. Reserve your seat today!

 

EARLY BIRD: $60.00 (Expires March 3!)
Single Registration: $70.00 (after March 3)
New Domain Names for Construction Companies
ABC members can now take advantage of new internet domain names: .CONSTRUCTION, .BUILD and .CONTRACTORS. These top level domain names (.com and .org are also top level domains) were created to help companies let people know quickly what their business is all about and expand their web presence. 
 
GoDaddy, an internet domain name and hosting provider, has launched several new top-level domain names for sale over the past several months, but the development of these and other web name extensions are sanctioned by the Internet Corporation for Assigned Names and Numbers (ICANN), the international organization that coordinates internet IP addresses and domain names. 
 
General contractors, building inspectors, carpenters, electricians, and anyone else in the building trades might find the .CONSTRUCTION or.CONTRACTORS domain name to be applicable. The .BUILD name also applies to many ABC members - anyone can register the names, and they are available on a first-come, first-served basis.

Contractors and building companies can purchase the new domain names at GoDaddy.com and other internet domain name providers. Oh, and by the way - check out abcmi.construction while you're at it!
State Legislature Considers Funds for Road Construction, Maintenance Budget 

State lawmakers anticipate spending big on road maintenance and priority construction projects in 2014. After a brutal winter has drained most transportation project and winter road maintenance budgets, the Michigan House and Senate continue to discuss additional funds for pothole maintenance and other road repairs. 

 

The Senate has passed a $360 million supplemental budget bill that includes $100 million for roads from the state's reserve fund that is typically set aside for "priority construction projects." The funding is designated for special winter road maintenance, which includes snow and ice removal, pot hole patching, crack sealing, emergency repairs and bridge maintenance. This one-time funding cannot be used on capital projects like reconstruction or resurfacing. 

 

A House version of the budget includes $100 million in general funds for roads, plus $115 million from the reserve fund. The House Appropriations Committee will vote on the version currently under consideration. Should the House's version, which includes less funding for different priorities such as the Detroit Metro Transit Authority and other budget areas pass, the House and Senate may need to conference to create a compromise bill. However House and Senate leaders on both sides of the aisle have expressed their desire to inject this money on top of normal funding streams.

 

Lawmakers and Governor Rick Snyder have also been working toward a longer-term road funding solution. Gov. Snyder has in the past advocated additional revenue sources for road and bridge maintenance including raising registration fees and additional gas taxes. 
CBI Hits Post-Recession High
ABC's Construction Backlog Indicator (CBI) hit a post-recession high in the fourth quarter of 2013, growing from 8.2 months to 8.3 months (1.3 percent). Compared to a year ago, CBI is 3.9 percent higher-up from 8 months at the end of 2012.  The data is split by region, and although the overall data is positive, the middle states (including Michigan) still show a slight backlog decrease.

CBI is a leading indicator measured in months that reflects the amount of construction work under contract, but not yet completed.  A lengthening backlog implies expanding demand for construction services. 

"CBI indicates the final three quarters of 2013 were a period of progress for nonresidential construction," said ABC Chief Economist Anirban Basu. "Although other indicators have not been quite as positive-nonresidential construction spending has risen only sporadically in recent months-the first quarter's bitter weather likely means some construction activity has been put off, which means the positive trend reflected in this CBI will likely continue. 

"Although CBI's pace of expansion should be enough to keep the nonresidential construction recovery going, there are significant headwinds for the industry," Basu said. "The December and January job reports show the economic recovery is sporadic and uncertainties surrounding the health care law also are likely to slow full-time job creation for several reasons, some of which were highlighted in a recently released CBO report. Sequestration, though recently relaxed, still constrains federal spending growth and many state and local governments continue to wrestle with burgeoning health care costs and underfunded pension liabilities." CBI highlights include:
  • Positive Outlook: The fourth quarter 2013 CBI of 8.3 months is a post-recession high and is the highest average backlog since ABC began measuring CBI in the first quarter of 2009.   
  • Regional Discrepancies: Throughout last year, average backlog expanded in the Northeast, South and West but dropped in the Middle States. Backlog growth ranged from an increase of 0.74 months in the South to a decrease of 0.21 months in the Middle States. 
  • Large and Smallest Firms See Largest Expansion: Large firms between $50 and $100 million in annual revenue increased their backlogs the most-nearly two months over the last year-while firms with less than $30 million in revenue increased their backlog by 0.8 months. Firms with revenue between $30 and $50 million lost an average of 2.5 months of backlog.
  • Commercial and Institutional Leads Industry Segments in Growth: While backlog based on industry segments stayed fairly steady on a quarterly basis, commercial and industrial construction has the longest backlog at 8.91 months. Backlog in infrastructure has been slipping since the stimulus package effectively ended.
  • Obstacles to Growth Remain: While the fourth quarter 2013 CBI is a post-recession high, nonresidential construction spending volumes are still down by one-fifth since the fall of 2008. 
  • GDP Forecast Remains Unchanged: ABC's forecast that GDP will expand in the range of 2.4 percent to 2.6 percent in 2014 remains unchanged.

To read more about the 2013 4th quarter CBI click here, for CBI charts and graphs click here.

Associated Builders and Contractors of Michigan is a statewide trade association, working in partnership with three local chapters, dedicated to providing Michigan with high-quality, affordable, safe and on-time construction.  ABC of Michigan is an equal opportunity organization that opposes all discrimination in the construction industry including discrimination based on union affiliation. A leading construction industry voice with state government, ABC provides many member services including legislative advocacy, networking opportunities, member benefits, legal updates, business development and educational opportunities.