east design & construction round table situation …...east design & construction round...
TRANSCRIPT
East Design & Construction Round Table Situation Report
Summary as of May 27, 2020
Session Presenters o James Vermeulen, Vermeulens
Economic Summary, Vermeulens AIA Billings
o ABI (architecture billings index) is the lowest in history o only 30% of architecture firms are reporting an increase in billings, 70% are reporting decreased billings (was
around 50%-50% pre COVID-19) o based on the current ABI, the north-east is the heaviest hit region (only 23% of architects are reporting increased
billings) o only 28% of commercial and industrial firms are reporting increased billings (hardest hit), residential is 30.3% and
institutional (strongest sector) is 36.1% o COVID-19 has affected architectural firms differently, 38% have furloughed/eliminated some architectural staff
positions whereas 27% have hired new employees and/or increased hours. o 8 of 10 firms have applied for PPP loans, 74% have been awarded full amounts o Consumer Sentiment Index declined by 19.4%
Regional Construction Labor Data
o still recommend holding 3%-4% escalation, recommend using add alternates o as of May 14th, more than 40M have lost their jobs since Feb 15th o construction jobs have declined by 1M, still not as bad as the financial crisis (2.3M construction jobs lost) o weekly unemployment claims are declining, yet are still quite high (2M per week range) o every state is currently a contracting market
Other Cost Impact Considerations
o supply cost analysis indicates that imported materials are showing delays in lead times (consistent pricing) o some delays on domestic products o might want to specify the difference between imports and exports for procurement o domestic steel mills are hinting at a 5% increase in steel costs, not materialized yet in procurement o COVID-19 may result in increased claims and ultimately increased premiums
Open Forum Discussion discussed how the government limiting the capacity of steel fabrication plant has impacted the market shortening supply chains reduces the risk of getting materials for projects, recommend using local suppliers for more
control and efficiency
Future Agenda the future of higher education planning Turner Construction COVID cost checklist jobs and unemployment
B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s
Since 1972
East Construction Round Table
®
James Vermeulen – Co-CEORichard Vermeulen – Co-CEO
Zach Bergeron – Associate
North America’s Construction Economistvermeulens.com
Service Beyond Estimation
®
Agenda
1. AIA Billings
2. Regional Construction Labor
3. Other Cost Impact Considerations
4. Open Forum Discussion
5. Covid 19 Cost Check List
Logistics
• Please mute mics except for those speaking
• Please keep camera function off
• Interim questions and comments via chat
• Weekly summary “Situation Reports”, slide deck, reminder
• Webcast audio available with reminder link
• Market Outlook “Special Report”
Previous Forum
• Duration of Pandemic will be key in the overall construction market impact• Development of Covid 19 Cost Impacts Table – Looking For Assistance• Commodity Prices Low• Bid Prices Holding on Larger Projects• Many Owners Moving Ahead• 3% to 4% Recommended Escalation Contingency
• Mechanical Perspective• Run HVAC on Full Capacity Over Night• Disassemble Demand Control Ventilation• Increase Outside Air• Consider Ultraviolet Air Treatment in Critical Spaces• Consider Once Through Air Systems
B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s
Since 1972
AIA Billings
®
North America’s Construction Economistvermeulens.com
Service Beyond Estimation
®
AIA Billings
Architecture Billings Index (ABI)
The Architecture Billings Index is an economic indicator for nonresidential construction activity, with a lead time of approximately 9–12 months.
Investment groups like Wells Fargo, media outlets, firms of all sizes, and business leaders rely on this leading monthly economic indicator to assess business conditions and predict and track the market.
The index is derived from AIA’s Work-on-the-Boards survey, which has gathered data on shifts in billings from architectural firm leaders for over 20 years. This data is a trusted tool used by the design and construction industry and other firms to predict and track movements in the market
AIA Billings
AIA Billings
AIA Billings
April
March
February
AIA Billings
AIA Billings
AIA Billings
AIA Billings
• 8 of 10 firms have applied for PPP Loans (84% + 2%)• 74% awarded full amount of request• Consumer Sentiment Index Declined 19.4%
B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s
Since 1972
Construction Labor Data
®
North America’s Construction Economistvermeulens.com
Service Beyond Estimation
®
Construction Jobs Data
3,800 Projects – $200 billion Total
Construction Jobs Data
2,000
4,000
8,000
16,00036.526 36.891 37.256 37.621 37.986 38.351 38.716 39.081 39.446 39.811 40.176 40.541 40.906 41.271 41.636 42.001 42.366 42.731 43.096 43.461 43.826 44.191
128,000130,000132,000134,000136,000138,000140,000142,000144,000146,000148,000150,000152,000154,000
NYSE
Wor
kers
(tho
usan
ds)
Employment NYSE Vermeulens
US Employment (In Thousands)
8.7 M Jobs
+22.8M Jobs-21.4M Jobs
Job Creation
US Employment (millions)
Jan-08 Feb-10 Feb-10 to Feb-20 Feb-20 Apr-20 Feb-20 to Apr-20
Total nonfarm 138.4 129.7 22.8 152.5 131.0 -21.5
Total private 116.0 107.3 22.5 129.8 109.3 -20.5
Goods-producing 21.9 17.6 3.6 21.2 18.8 -2.4
Mining & logging 0.7 0.7 0.0 0.7 0.7 0.0
Construction 7.5 5.5 2.1 7.6 6.6 -1.0
Manufacturing 13.7 11.5 1.4 12.9 11.5 -1.4
Private service-providing 94.1 89.6 18.9 108.5 90.6 -17.9
Trade, transportation, and utilities 26.7 24.5 3.3 27.8 24.7 -3.1
Business 29.3 27.0 6.3 33.3 30.5 -2.8
Education and health services 19.0 19.8 4.8 24.6 21.9 -2.7
Leisure and hospitality 13.5 12.9 4.0 16.9 8.7 -8.2
Other services 5.5 5.3 0.6 5.9 4.6 -1.3
Government 22.4 22.5 0.3 22.8 21.7 -1.1
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Unem
ploy
ed [i
n th
ousa
nsds
]
Total Unemployed Currently Looking For A Job Part Time for Economic Reasons
US Unemployment
Apr 18
Apr 11
Apr 25
Apr 4
Mar 28
Mar 14
Mar 21
May 02
Feb 15
May 09
May 14
US UnemploymentWeek Ending Claims
March 7th 211,000
March 14th 498,000
March 21st 3,307,000
March 28th 6,867,000
April 4th 6,615,000
April 11th 5,237,000
April 18th 4,442,000
April 25th 3,846,000
May 2nd 3,176,000
May 9th 2,687,000
May 14th 2,438,000
1
2
3
4
5
6
7
8
Unem
ploy
men
t Cla
ims [
in m
illio
ns]
Weekly Unemployment Claims
Year-Over-Year Construction Labor Growth
State Construction Labor 12-Month Average (Thousands)
High Growth
Above Average Growth
Average Growth
Below Average Growth
Contracting Market
Year-Over-Year Growth
Market ExpansionCalifornia
(+58%)Massachusetts
(+47%)Georgia(+43%)Texas
(+39%)National(+37%)
-4%-2%0%2%4%6%8%
10%12%
500
600
700
800
900
1000
California
-4%-2%0%2%4%6%8%
10%12%
406080100120140160180
Massachusetts
-4%-2%0%2%4%6%8%
10%12%
120140160180200220240
Georgia
-4%-2%0%2%4%6%8%
10%12%
400450500550600650700750800
Texas
State Construction Labor 12-Month Average (Thousands)
High Growth
Above Average Growth
Average Growth
Below Average Growth
Contracting Market
Year-Over-Year Growth
Market ExpansionNew York
(+28%)Illinois(+19%)
National(+37%)
-4%-2%0%2%4%6%8%
10%12%
150200250300350400450
New York
-4%-2%0%2%4%6%8%
10%12%
150
180
210
240
270
300
Illinois
State Construction Labor 12-Month Average (Thousands)
High Growth
Above Average Growth
Average Growth
Below Average Growth
Contracting Market
Year-Over-Year Growth
Market ExpansionBoston(+53%)
Los Angeles(+48%)Atlanta(+48%)Dallas(+44%)
National(+37%)
-4%-2%0%2%4%6%8%
10%12%
60708090100110120130
Boston
-4%-2%0%2%4%6%8%
10%12%
140160180200220240260280
Los Angeles
-4%-2%0%2%4%6%8%
10%12%
120140160180200220240
Dallas/Fort Worth
-4%-2%0%2%4%6%8%
10%12%
8090100110120130140150
Atlanta
State Construction Labor 12-Month Average (Thousands)
High Growth
Above Average Growth
Average Growth
Below Average Growth
Contracting Market
Year-Over-Year Growth
Market ExpansionNew York City
(+32%)Chicago(+23%)
National(+37%)
-4%-2%0%2%4%6%8%
10%12%
200
250
300
350
400
450
New York City2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
-4%-2%0%2%4%6%8%
10%12%
100120140160180200220
Chicago
US Construction Employment (Thousands)
Low to CurrentTotal
+22.8M (+18%)-21.4M (-14%)
Construction+2.1M (+37%)-1.0M (-13%)
0
50
100
150
200
250
300
350
400
450
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
8,000Employees Vermeulens
B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s
Since 1972
Other Considerations
®
North America’s Construction Economistvermeulens.com
Service Beyond Estimation
®
Supply Costs
Mechanical Insights
Domestic Steel Mills Hinting to 5% Increase – Auto Industry
No PVF Commodity Issues
Verifiable Evidence of Equipment Progress – Video/Photo
Insurance
Construction Drive
• Resurgence of Workers’ Compensation and General Liability
• Will Covid 19 be covered• Some States Yes, Others No
• California Will Require Coverage• Confirmation It was Contracted on the Job
• Increased Claims• Increase Cost to Defend• Increased Premiums
• What Can Be Done• Robust Safety Policies• Document Compliance• Review Policies for Coverage
Open Forum
Contractors Owners Architects Engineers Sub Contractors
• Bids• Work Volume• Construction Logistics• COVID-19 Costs• Design Impacts• Owner Issues
B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s
Since 1972
Covid 19 Construction Costs
®
North America’s Construction Economistvermeulens.com
Service Beyond Estimation
®
COVID Cost Checklist
COVID Cost Checklist
Portable Toiles ilo Trailer Toilets Increased Insurance Rates?
Handwashing Sinks Delay Change Orders?
Thermal Camera Shift Work
Additional Trailer for Temp Screening Productivity
Additional PPE 3rd Parties
Additional Cleaning Crews Contract Conditions
Additional Elevator Operators
Additonal Elevators
+/- 1%
Future Agenda
Tim Reynolds
Future Agenda
• The Future of Higher Education Planning
• Turner Construction
• Covid Cost Checklist
• Jobs and Unemployment
• Others?