e-glass weekly - October 17, 2006
Vol 1 | Num 19
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Education key to reversing labor shortage
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Managers for Harmon Inc. out of Eden Prairie, Minn., often look to colleges and universities when finding new additions to its project teams, says Steve Griest, general manager at the glazier’s Chicago office.
Steve Burnett, president of Walters & Wolf Curtain Wall in Seattle, says his company also pulls many new employees from college and university construction management programs.
However, educational institutions provide more than just an avenue for recruitment, Griest says. Through partnerships with colleges and universities, Harmon increased the amount of trade education among students, hopefully leading to increased interest in the field, Griest says.
“When things are good and everyone is hiring, it’s hard for anyone to find people,” Griest says. “On top of that, the kids coming out of college often lean toward jobs with general contractors, and it gets harder to compete. You have to get people involved at that level to find employees.”
Harmon also operates an internship program with university students to further their interest in glazing, Griest says.
A panel of leaders in the construction industry unanimously agreed during the ENR Top Firm Leaders Forum this past month that developing such relationships in schools to teach students of all ages about careers in construction will be vital to the success of contractors and subcontractors, and will help avert a workforce crisis that could cripple the building industry.
Industry officials at the forum, which took place in Crystal City, Va., attributed the waning interest in construction jobs in part to lack of education about the industry in primary and secondary schools, and inaccurate perceptions that the jobs have low pay and little advancement.
Every company “needs to sell this industry as one where you learn skills, have autonomy and advance rapidly,” said Stephen Sandherr, chief executive officer of the Associated General Contractors of America in Arlington, Va. “We provide a career alternative with $28 per hour wages and a sense of accomplishment.”
In addition to recruitment and education among college students, companies should bring construction education to primary and secondary schools, according to forum panelists.
“We need new a vision for employers that begins in middle school and high school and one that helps people move directly into vocational program and trade schools,” said Emily DeRocco, assistant secretary for Employment and Training Administration of the U. S. Department of Labor.
One such program includes a post secondary education option for students at Richfield Senior High in Richfield, Minn., that allows juniors and seniors access to part-time education at a technical college, says Teresa Rosen, assistant principal for the school. “We actually bus students out to Hennepin Technical College to take college-level courses in many things like construction,” she says.
DeRocco recommended company managers contact area schools to find out about their career learning programs.
Click the following links if you missed Part One or Part Two of e-glass weekly’s series on the construction labor shortage.
Nonresidential construction to rise through next year
Manufacturers of curtain walls and architectural glass can celebrate the New Year early. Economists who spoke at the Reed Construction Forecast in Washington, D.C., Oct. 11, expect nonresidential construction to continue its boom throughout 2007...
Manufacturers of curtain walls and architectural glass can celebrate the New Year early. Economists who spoke at the Reed Construction Forecast in Washington, D.C., Oct. 11, expect nonresidential construction to continue its boom throughout 2007.
The economy as a whole “is downshifting from a very rapid rate of growth,” says Martin Regalia, vice president and chief economist with the U.S. Chamber of Commerce. Residential construction has taken it in the chin, with starts peaking at 2.265 million in January and then diving to 1.665 million in August, said Jim Haughey, chief economist at Reed Construction Data. He expects starts to drop to 1.433 million in 2007.
However, the consensus among conference economists is that the decline in residential construction will not impact the robust performance of nonresidential construction.
“Nonresidential construction has yet to hit its peak growth,” Haughey said. It may top out in the spring, but he projects that the sector will continue strong through 2007. Nonresidential construction spending is projected to advance by 12 percent in 2007, according to Reed’s publication, U.S. Construction Outlook 2007-2008.
The sector will cool in 2008, but not much, continuing to grow by 8 percent higher than 2007. That rate remains “comfortably ahead of inflation,” according to the outlook publication.
High corporate profits, readily available, low-cost credit and increased state and local tax revenues will fuel nonresidential construction spending.
Investment in the sector is demographic, with upticks in each segment. Spending on construction for lodging, though unable to match a surge of 54 percent in 2006, will post a year-over-year gain of 20 percent in 2007.
Construction spending for office and retail space will be up 15 percent and 11 percent, respectively. And office construction expenditures will continue to grow by 19 percent in 2008.
Dollars invested in institutional construction remain on the upswing. The health care industry is expected to up its construction spending next year by 18 percent; followed by a growth of 12 percent each in public safety and amusement and recreation. Educational and religious communities are expected to increase their outlays by 10 percent.
Construction spending is growing faster than starts, Haughey said. Construction starts, which increased 11.8 percent year over year in 2006, will climb 6.7 percent next year and 4.4 percent in 2008, he predicted.
Material costs account for much of the difference in the rates of growth. “Construction suffered from more inflation than the rest of the economy,” Haughey said.
The core rate of inflation in the United States hovers between 2.5 percent to 3 percent, Regalia said. However, in the 12-month period ending in August, the cost of construction materials experienced a 9 percent increase and will likely rise another 7 percent in 2007, Haughey said.
Nonresidential construction is experiencing skilled labor shortages – a phenomenon not ameliorated by the decline in residential construction, Haughey said. As a result, he expects wage costs for these workers “to rise significantly.”
Natural gas surcharges steady, diesel on the rise
At the start of the month, fabricators saw their energy surcharges from most glass manufacturers edge up from $1,250 in the third quarter to reach $1,300. The natural gas portion of the surcharge remained at $900, while the diesel surcharge rose from $350 to $400...
At the start of the month, fabricators saw their energy surcharges from most glass manufacturers edge up from $1,250 in the third quarter to reach $1,300. The natural gas portion of the surcharge remained at $900, while the diesel surcharge rose from $350 to $400.
“Through the third quarter of 2006, we continue to see a slight decrease in the cost of natural gas and a slight increase in diesel fuel,” wrote Scott Follett, director of new products and development for flat glass products for Pittsburgh’s PPG Industries, in a Sept. 15 letter to U.S. customers.
Manufacturers calculate the natural gas surcharge based on the past three-month average of the New York Mercantile Exchange. Although prices for natural gas dropped 4 percent for the quarter, surcharges did not go down, according to the manufacturers’ price letters.
Companies base diesel fuel calculations on the previous 12-week average of the Retail on Highway Diesel Prices from the U.S. Department of Energy. According to the report, the average price per gallon from June 26 to Sept. 11 reached $2.96, up from $2.84 in the previous 12-week period.
The current surcharges will continue through the fourth quarter until they will be recalculated based on new averages.
To read more about how surcharge increases affect fabricators, click here, and glaziers, click here.
The week's business headlines
- China Glass enters joint venture
- Guardian and partners’ Saudi Arabian plant to open late 2007
- Asahi to expand production in China
- Thermique names Fenevations as distributor
- Pilkington partners with Eurotherm
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China Glass enters joint venture
China Glass will enter into a joint venture with Shaanxi Blue Star Glass, both of China, to purchase stakes in Xianyang Blue Star Coated Glass’ registered capital, according to an Oct. 11 article in Singapore’s China Knowledge… read more
Guardian and partners’ Saudi Arabian plant to open late 2007
Officials from Guardian Industries Corp. of Auburn Hills, Mich., and its joint venture partners, National Co. for Glass Industries Ltd. and Al Zamil Group of Saudi Arabia, report that construction of a float glass facility in Ras Al Khaimah, United Arab Emirates, is progressing according to schedule, according to an Oct.10 article in Italy’s ITnews… read more
Asahi to expand production in China
Officials at Japan’s Asahi Glass Co. announced today plans to invest $54.3 million to build a second auto glass plant in the Guangdong province of China, according to Reuters… read more
Thermique names Fenevations as distributor
Officials from Thermique Technologies LLC of Chicago announced that Fenevations will serve as exclusive regional distributor of Thermique heated windows in northeastern United States and eastern Canada, according to an Oct. 10 company release… read more
Pilkington partners with Eurotherm
Officials from Pilkington, with North American headquarters in Toledo, Ohio, announced a global alliance agreement with United Kingdom-based Eurotherm, according to an Oct. 9 article from the United Kingdom’s Pro-Talk Ltd… read more