Associated Builders and Contractors reported that its Construction Backlog Indicator rose to 7.9 months in May, an increase of less than 0.1 months from April’s reading. Furthermore, based on an ABC member survey conducted from May 20-June 3, results indicate that confidence among U.S. construction industry leaders continued to rebound from the historically low levels observed in the March survey.

Nonresidential construction backlog is down 0.8 months compared to May 2019 and declined year-over-year in every industry, classification and region. Backlog in the heavy industrial category, however, increased by nearly one month in May after reaching its lowest level in the history of the series in April.

Reprinted courtesy of ABC, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

One of the most challenging obstacles contractors face is securing qualified skilled laborers to meet the demands of their current workload. The advent of more sophisticated technology on jobsites is alleviating the problem in part as contractors are increasingly utilizing technology to assist in achieving timely job completion. The use of technology also makes current workers accountable for meeting production timelines. Of course, technology is not new to the construction industry; however, significant advances are enabling construction contractors to take greater advantage of technology to fill the gap in human capital.

Building Information Modeling is a prime example. During the design stage, BIM, combined with virtual and augmented reality, can facilitate sharper results and greater efficiencies. BIM assists contractors in choosing materials, fittings and design changes in order to make post-completion buildings more maintainable. For example, BIM enables the maintenance team to do a virtual walkthrough of the building to understand placement of the mechanical system in order to determine access and ability to service the system. This allows design changes to be made before the construction stage begins and can reduce or eliminate delays and change orders in the construction process.

Reprinted courtesy of Michelle Johnson & Robert Mercado, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Kaiser Permanente announced March 25 it has cancelled plans to build a $900 million headquarters facility in Oakland, Calif. The project, which would have been the largest office building in Oakland, was going to be called Kaiser Permanente Thrive Center.

A construction lien foreclosure action is an action against the real property and MUST be brought in the county where the property is located. It is an action concerning subject matter jurisdiction (the jurisdiction of the court to hear the matter) and, thus, can be raised at any time in a proceeding. If you are looking to foreclose a construction lien, please make sure 1) the lien is recorded in the right jurisdiction and 2) the lien is foreclosed on in the right jurisdiction.

In a recent case, Prime Investors & Developers, LLC v. Meridien Companies, Inc., 2020 WL 355930 (4th DCA 2020), a dispute arose between a general contractor and subcontractor on a hotel project in Miami-Dade County. The general contractor filed suit against the subcontractor for untimely and defective installation in Broward County. The subcontractor counter-sued the general contractor for breach of contract and asserted a claim against the developer of the hotel to foreclose a construction lien. Remember, the property was located in Miami-Dade County but the lawsuit was in Broward County.

New York City's Facade Inspection and Safety Program, or Local Law 11, now carries more stringent punishment for owners of buildings whose facades fail to meet safety regulations.

The Gordon & Rees Construction team has been closely watching all of the developments with COVID-19 and the impacts on our construction clients. We have compiled various resources that may be useful for you and will continue to update our COVID-19 Hub with information as it is released.

Reprinted courtesy of Brenda Radmacher, Gordon Rees and Ernest Isola, Gordon Rees
Ms. Radmacher may be contacted at bradmacher@grsm.com
Mr. Isola may be contacted at eisola@grsm.com

Amidst the ongoing Covid-19 pandemic, daily and sometimes hourly changes in federal, state, and local orders and regulations are significantly impacting the construction industry. This blog provides an overview of practical issues to consider related to your California construction projects in light of the ever-changing landscape.

When it comes to determining whether work should be stopped on a particular project, there are three major considerations to address: (1) where is the project located, (2) what orders have been issued in that locality, and (3) what kind of project is it?

Reprinted courtesy of Erinn Contreras, Sheppard Mullin and Suzanne Stafford, Sheppard Mullin
Ms. Contreras may be contacted at econtreras@sheppardmullin.com
Ms. Stafford may be contacted at sstafford@sheppardmullin.com

New York has narrowed the definition of "essential" construction, closing most projects in the state following concerns about worker safety as numbers rise related to COVIS-19 cases and deaths.

Reprinted courtesy of Eydie Cubarrubia, Engineering News-Record and Debra K. Rubin, Engineering News-Record
Ms. Cubarrubia may be contacted at cubarrubiae@enr.com
Ms. Rubin may be contacted at rubind@enr.com

Successful general contractors understand that accurate cost estimates are essential to both project and organizational success. For decades, the cost of construction has been a function of marketplaces: labor, materials, insurances and fees. However, given increasing project complexity and greater technological capabilities, this reality is changing. The need to both understand and quantify the risk in performing complex projects will shape the way cost estimates evolve in the very near future.

WHY ACCURATE COST ESTIMATES ARE CRITICAL

It is safe to say that cost overruns have become common across the construction industry. According to a study from KPMG, just 31% of all construction projects from the past three years have been completed within 10% of their initial budget.

Reprinted courtesy of Justin Levine, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

In September, estimated not seasonally adjusted construction unemployment rates fell nationally and in 48 states and rose in two states on a year-over-year basis, according to an analysis of U.S. Bureau of Labor Statistics data released by Associated Builders and Contractors. For the fifth consecutive month, the construction unemployment rates for all 50 states were below 10%. For the nation and 29 states, this was their lowest September construction unemployment rate on record.

The construction industry employed 155,000 more workers nationally compared to September 2018, as the September 2019 national NSA construction unemployment rate fell from 4.1% to 3.2% over the same period, according to BLS numbers. But the worrying trend of declining growth in construction employment continues. September’s increase in year-over-year employment is the smallest increase since the January 2013 increase of 116,000. Part of the slowdown in employment growth may be result of the continued shortage of skilled workers.

Reprinted courtesy of Associated Builders and Contractors, Inc., Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

It seems we all agree the digitisation of construction and real estate is an imperative for buildings to be designed, constructed and operated more cost-effectively and deliver the changing needs of the building’s occupants.

There is much discussion about the benefits of AI, MI, Digital Twins and not forgetting BIM to support the digital transformation of the built environment. Yet I’m unconvinced these technologies will deliver their promised benefit without the whole supply chain addressing the underlying fundamental need to deliver structured data, and I repeat the need for structured data.