July 2015
Supported By
NAHB Webinar:  Confined Spaces
Got questions about confined spaces?  Get answers on July 7.

NAHB will host a free webinar on the Occupational Safety and Health Administration's (OSHA) new confined spaces rule on July 7 from 2-3 p.m. ET.

The New Confined Spaces in Construction: The Big Picture should help bring builders and developers up to speed on the requirements of the new rule, which goes into effect on Aug. 3.

atticJessica Douma, a regulatory analyst with OSHA's Directorate of Construction, will provide background on the new rule: 20 CFR 1926 Sub-part AA - Confined Spaces in Construction and general information about performing construction work in confined spaces.

She'll also address the relationship between the new construction standard and the general industry rule that has been in place since 1993, and cover the most pressing areas of concern for builders and remodelers.

If you miss the July 7 session, the webinar will be available for replay, along with additional resources in the NAHB Confined Spaces in Construction Toolkit.

Register today, or contact Rob Matuga for additional information. 
 
Legislative Recap
June 16, 2015 marked the end of the 2015 Fiscal Legislative Session. HBAGNO's June general membership meeting hosted guest, Michelle Shirley, LHBA's state lobbyist. In her legislative recap, Michelle informed the HBA's members of the successes and failures of this session and which ones would affect the home building industry. She went on to discuss potential issues that could become problems for our industry in the Legislative session 2016. If you missed the meeting, the bills that were focused on by the LHBA can be found here.  


 
Economic Forecast:  Second Half of 2015
Elliot Eisenberg
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at [email protected]. His daily 70 word economics and policy blog can be seen at www.econ70.com. 

  

The Economic Forecast for the Second Half of 2015: A Single, Possibly a Double but No Homeruns     

 

Elliot Eisenberg, Ph.D.,
GraphsandLaughs, LLC
June 2015

Despite GDP growth stalling in Q1, this time due to bad weather, a port strike on the west coast, a rising dollar and falling oil prices, the economic recovery remains intact.  The poor performance of the US economy from January through March was aberrant, and the incoming employment, housing, and service sector data all point to a modest economic pickup.  GDP growth the rest of the year should average 2.6%, with growth in Q2 closer to 1.75% as the economy slowly rebounds from a tough Q1.  An expected pick-up in wages and oil exploration activity and possibly increased corporate spending on plant and equipment suggest that 2015 will probably improve as it progresses.  

Despite falling energy prices, household spending has been very lackluster.  As a result, savings rates are up and spending on durable and non-durable goods has been weak.  Simultaneously, because the strong dollar has made US exports more costly abroad and imports cheaper here, manufacturing activity has slowed.  And due to falling oil prices, oil exploration has plummeted, with just 646 rigs in operation, down from a high of almost 1,600 eight months ago.  That said, rig counts have stopped falling and should start to rise as oil prices firm.  Moreover, the labor market continues to strengthen.  Voluntary quit rates are rising, the number involuntary terminations keeps falling, and job creation, while slightly down from last year, is strong.  At this rate of improvement, there will be little slack in the labor market a year from now.  

A definite economic bright spot thus far in 2015 has been housing, and that is due to rising household formation.  After averaging roughly 1.2 million annually from 1983 through 2006, household formation averaged just 600,000 through September 2014.  Since then, it has been rising at an annualized rate of 1.5 million.  Add to this increasing credit availability, and housing starts should reach an annualized average rate of 1.175 million during the second half of 2015, with new single-family construction contributing at a pace of 775,000 units and multifamily adding 400,000.  Despite being severely constrained by a lack of inventory, pending home sales are strengthening and existing home sales should continue rising by 6% annually as should home prices.       

As for inflation, it's benign but will likely slowly begin creeping up from its current anemic level.  The strong dollar will not strengthen further and oil will not weaken more, thus the trends that have exerted strong deflationary pressures on imports and energy respectively should dissipate.  Moreover, as the unemployment rate falls, labor shortages will become an increasing reality and that will cause wages to rise.  This should help household spending and encourage corporate investment.  However, slowly rising prices and wages, albeit from very low levels, will push the Fed to raise short-term rates late this year, probably in September but possibly in December.  The Fed will then raise rates very slowly thereafter due to weak global growth.  Long-term rates have bottomed and 10-yr Treasuries will end the year at close to 2.6% as the economy strengthens.

In short, the economy continues to grow modestly.  Short-term rates will start rising in the fall, wages are showing nascent signs of rising, and residential construction activity looks to strengthen as we go into 2016.  Most critically, continued solid job creation will keep the recent rise in household formation up and the likelihood of a recession during the next six months is zero.         
            
Have a wonderful summer and see you in August! (Remember, I will not be writing an article in July).

 
From the Department of Inspections & Code
Hurricane Season:

Hurricane season has already begun. Contractors and homeowners need to be conscientious of and take proper actions to secure construction site materials and debris.  Job sites should be kept clean and all trash placed in a container and covered or hauled away. A plan of action should be in place prior to a hurricane making landfall and all precautions taken. All building material and equipment should be properly stored and/or anchored.  Sanitary units should also be properly anchored. Anything that could become airborne becomes a danger to the health, safety, and welfare of loved ones and property.  Please be considerate of your customer and surrounding neighbors.

Member Rebate Program
The Member Rebate Program is a free member benefit of your State & Local Home Builders Association.

There are over 40 of the country's leading manufacturer brands participating in the Member Rebate Program.

Visit www.nahb.org/ma for more information, or CLICK HERE to view an online brochure with helpful information about the program.
From last month... 
Operation Finally Home
Tyson Construction has teamed up with Operation Finally Home and the Irving Morris Foundation to help build a mortgage free home for a wounded veteran. The groundbreaking ceremony was held recently in Ashton Plantation, in Luling, where the custom home will be built for U.S. Army Veteran Nathan Young, his wife Tabitha, daughter Emme, and service dog Maggie. Tyson Construction would like to thank HBA President Roy Olsen, Phil Hoffman, and Randy Noel for attending the groundbreaking.
  
 
Operation Finally Home is a national, non profit organization out of Texas, whose primary goal is to bring communities, organizations and custom builders together to build mortgage free homes for wounded veterans and their families. Sergeant Nathan Young sustained multiple injuries when his vehicle was bombed on his second tour in Iraq, in 2010. The home will be tailored to his needs along with his family's. Local support for the project has already started to come in, but to learn more how you can help with the project, contact Zach Tyson of Tyson Construction ([email protected]).
    
Legislative Recap
Orleans Parish-Comprehensive Zoning Ordinance

After a 10 hour meeting on May 14, 2015, the New Orleans City Council approved the Comprehensive Zoning Ordinance (CZO). This ordinance was drafted to work directly with the current master plan to help determine how the city is developed. It took almost four years and much public input to create the plan that has now been approved. The HBA's Executive Vice President, Jon Luther had the opportunity to work on a task force that assisted with the development of the document.

The adopted CZO is developer friendly and softens restrictions in the Faubourg Marigny and Bywater areas. These new rules will allow for taller buildings and smaller units in exchange for more access to affordable housing and certain design considerations.

For an in-depth look into the changes to the CZO, please Click Here.

Fiscal Legislative Session Recap

Join the HBAGNO's General Membership Meeting on June 30, 2015 when we host Michelle Shirley, LHBA's state lobbyist, as she summarizes this year's Legislative Session. This GMM will be hosted at the Holiday Inn in Metairie. For more information and to register for this event, please follow Click Here.

Crudely Speaking
Elliot Eisenberg
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at [email protected]. His daily 70 word economics and policy blog can be seen at www.econ70.com. 

  

Historically, the price of West Texas Intermediate Crude (WTI) has always been slightly higher than the price of North Sea Brent Crude, the major benchmark off which two-thirds of the world's internationally traded crude oil is priced. WTI has historically been more expensive because it is "light sweet crude," meaning it contains less than 0.5% of sulfur and is considerably lighter than water and lighter than any other crude oil, and therefore the world's most valuable oil.

 

Despite possessing these very desirable physical characteristics, for the last several years WTI has regularly traded for less, sometimes much less, than Brent. This situation is not only detrimental to American oil exploration and production firms but also US households. Interestingly, this situation can be easily righted if only Congress would pass legislation. Let me explain.  

 

Until 1973, US oil, like all other goods and services, could be easily exported. However, an export ban was imposed after the 1973 Arab oil embargo in an attempt to prevent future oil shortages and arguably to help the US gain energy independence.  For decades the ban had no obvious impact as the US was a huge oil importer. But now due to hydraulic fracturing and horizontal drilling, the US now produces about twice as much oil as it did a few short years ago and is now the world's second largest oil producer.

 

Because the US used to import large quantities of oil, and because due to geography and politics the imported oil was primarily "heavy sour crude," most American refineries are ill equipped to refine the high quality WTI coming from the new and newly-invigorated US oil fields. As a result, US crude oil is quickly filing up storage tanks and in the process driving down the price as domestic supply vastly exceeds refiner demand.

 

If Congress were to lift the export ban, the price of WTI would rise to the world price, which would expand domestic oil exploration and production and increase rig counts and employment in the oil patch. Counterintuitively, it would also reduce the retail price of gasoline. This is because gasoline is tied to the price of Brent, since all refiners except American ones distill crude into gasoline from oil priced off of Brent.

 

Because the export ban does not cover distilled products like diesel, gasoline and jet fuel, the price American refiners charge for distillates is the world price, even though the crude they purchase is cheaper due to the export ban on domestic crude. Gasoline here and abroad would thus be cheaper because the release of more US crude onto the world market that is now bottled up onshore due to the export ban, would reduce, albeit slightly, the price of Brent, and in the process slightly reduce the price of distillates including gasoline.

 

Of course there is never a free lunch in economics. Were the export ban lifted, the losers would include domestic refiners as they would pay more for crude, and foreign oil producers such as the Saudis, Russians, Canadians and others as they would receive slightly less for theirs. That said, repealing the ban makes sense. It would save US consumers money and slightly increase returns to investors in the oil patch. And if the Saudis are unhappy, they can recall that the export ban only exists because they embargoed us 40 years ago!
 
NAHB Online Courses Logo
2015 Senior Officers of the Board

President, Roy Olsen
Vice President, Floyd Simeon
Treasurer, Mike LeCorgne
Secretary, Frank Morse
Immediate Past President, Brian Mills

2015 Board of Directors

Steve Albert
John Arms
Fernando Arriola
Lori Barker
Nick Castjohn
Ric Darling
Nicole Dupre
Charlie Fontenelle
Eddie Gandolfi
Phil Hoffman
Kevin Katner
Jo Ann Kostik
Michael Kraft
Peter Lanaux
Ben Laws
Bruce Layburn
Harold LeBlanc
Scott Morse
Helmut Mundt
Randy Noel
Lynda Nugent Smith
Rolf Parelius
Zach Tyson
Kirk Williamson
Steve Wobbema
Wes Wyman
Peter Young

Also Supported By: 

2-10

 

July Calendar of Events
All Events held at HBA office unless otherwise noted 
 
8) Designation Class: Business Management for Building Professionals 
Location:  Avondale 
 
10-12) Southern Sportsmans Festival & Expo. 

21) HBA Board of Directors @ 4pm 
 
29-31) LHBA Board of Directors Meeting:  Perdido Key 
Featured Events
2015 Southern Sportsman's Festival & Expo

 
 
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August 22 
12th Annual
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3:30-7pm
Deutsches Haus

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HBA Staff Contacts

Jon Luther, Executive Vice President
Philip Thomas, Education Director & NOEL Program Director  [email protected]
Lauren Galliano, Director of Membership & Industry Relations   [email protected]g
Rita Bautista, Governmental Affairs Representative    [email protected]
Shane Gray, Accountant  [email protected]


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