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On Dec. 18, the Occupational Safety and Health Administration (OSHA) announced in a press release that they will continue accepting 2016 OSHA Form 300A data through the Injury Tracking Application (ITA) until midnight on Dec. 31, 2017. OSHA will not take enforcement action against those employers who submit their reports after the Dec. 15, 2017 deadline but before Dec. 31, 2017 final entry date. Starting Jan. 1, 2018, the ITA will no longer accept the 2016 data.

According to the Trump administration’s Fall 2017 Unified Agenda, OSHA plans to publish a proposed rulemaking, which would seek to reconsider, revise or remove provisions of the final rule, in December 2017.  

Background:

Under OSHA’s Electronic Injury Reporting and Anti-Retaliation final rule (also known as Improve Tracking of Workplace Injuries and Illnesses) certain employers were required to electronically submit the information from their completed 2016 Form 300A by Dec. 15. 

The following information on electronic reporting is available on the DOL’s website:

• Establishments with 250 or more employees in industries covered by the recordkeeping regulation must submit information from their 2016 Form 300A by Dec. 15, 2017. These same employers will be required to submit information from all 2017 forms (300A, 300, and 301) by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2.

• Establishments with 20-249 employees in certain high-risk industries must submit information from their 2016 Form 300A by Dec. 15, 2017 and their 2017 Form 300A by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2.

According to the DOL website, the following OSHA-approved state plans have not yet adopted the requirement to submit injury and illness reports electronically: California, Maryland, Minnesota, South Carolina, Utah, Washington and Wyoming. Establishments in these states are not currently required to submit their summary data through the injury tracking application. Similarly, state and local government establishments in Illinois, Maine, New Jersey and New York are not currently required to submit their data through the Injury Tracking Application. 

Contact information for each of the state plans can be found on OSHA’s website.

Note: Enforcement of the anti-retaliation provisions of the final rule went into effect on Dec. 1, 2016.

In 2016, ABC filed a lawsuit against the final rule, which remains pending.
 
More information about the final rule can be found on DOL’s website and on the Injury Tracking Application landing page.

This article is intended for informational purposes only and does not constitute legal advice or opinion.

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Engineering News-Record invited ABC 2017 National Chair Chuck Goodrich to speak from a contractors’ perspective for its Dec. 12 webinar, “The ‘Trump Effect’ on the Business of Construction,” which took a closer look at the impact, so far, of Donald Trump’s presidency. 

Goodrich, president of Gaylor Electric, Inc., explained the Trump administration’s regulatory rollback is giving construction companies more efficiency and they don’t feel like they are “under attack” from the federal government. According to Goodrich’s presentation, experts say President Trump is on pace to put out fewer rules than the “reigning deregulation champion,” President Ronald Reagan.

Goodrich also told the webinar audience the Trump White House’s executive orders to speed up the project permitting process and expand apprenticeship will allow companies to get more work done and start to shore up the labor shortage challenge the industry is experiencing.

Finally, Goodrich says construction companies like his are feeling confident about the current construction business climate under President Trump and he used the latest record-setting ABC Construction Backlog Indicator as part of his evidence.

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Associated Builders and Contractors (ABC) Chief Economist Anirban Basu predicts stability for the construction industry’s economy and expanding nonresidential construction spending in 2018. While construction project backlog and contractor confidence remain high heading into the new year, Basu warns there are risks to the 2018 outlook as a number of potential cost increases could come into play.

“With wage pressures building, healthcare costs surging and fuel prices edging higher, inflation is becoming more apparent,” Basu said. “That could translate into some meaningful interest rate increases in 2018, which all things being equal is not good for construction spending. The stock market’s performance has been simply brilliant. But what goes up can go down.”  

Basu added that asset prices might head in a different direction in 2018, including commercial real estate prices.  Segments like hotels, office buildings and apartments have helped to fuel construction spending in recent years.  If the value of properties begins to stagnate or worse, construction spending momentum will eventually wind down.  The impact of this may not be felt in 2018, however, but in out years, Basu said.

“For now, there is plentiful momentum,” said Basu. “A recent reading of the Conference Board’s Index of Leading Economic Indicators suggests that the U.S. economy will enter 2018 with substantial momentum. Corporate earnings remain healthy. Global growth is accelerating. Consumers are upbeat.  Tax cuts could fuel faster business spending. All of this suggests that the construction recovery that began in earnest in 2011 may have a few more birthdays ahead.”

Read Basu’s full 2018 construction economic forecast in Construction Executive magazine. You can also listen to Basu talk about his forecast in a recent webinar.

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A study released this month by the Illinois Policy Institute found that repealing the state’s prevailing wage law would help boost the state’s economy by lowering the cost to taxpayers on publicly funded construction projects and spurring job growth in the construction industry. 

In looking at states that repealed their prevailing wage law, the study found that employment in the construction sector grew by almost 8 percent. In the state of Illinois, that could translate to 14,000 new jobs in the construction industry over the next 10 years. 

As one of the highest taxed states in the nation, Illinoisans would also see tax relief if the state’s outdated prevailing wage law is repealed. The study concluded that repeal of the prevailing wage law could save taxpayers an average of 10 percent on publicly funded construction projects. 

Read the full study from the Illinois Policy Institute. 

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Under the U.S. Department of Labor’s (DOL) Electronic Injury Reporting and Anti-Retaliation final rule (also known as Improve Tracking of Workplace Injuries and Illnesses) certain employers are required to electronically submit the information from their completed 2016 Form 300A by Dec. 15. 

The following information on electronic reporting is available on the DOL’s website:

• Establishments with 250 or more employees in industries covered by the recordkeeping regulation must submit information from their 2016 Form 300A by Dec. 15, 2017. These same employers will be required to submit information from all 2017 forms (300A, 300, and 301) by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2.

• Establishments with 20-249 employees in certain high-risk industries must submit information from their 2016 Form 300A by Dec. 15, 2017 and their 2017 Form 300A by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2.

According to the DOL website, the following Occupational Safety and Health Administration (OSHA)-approved state plans have not yet adopted the requirement to submit injury and illness reports electronically: California, Maryland, Minnesota, South Carolina, Utah, Washington and Wyoming. Establishments in these states are not currently required to submit their summary data through the injury tracking application. Similarly, state and local government establishments in Illinois, Maine, New Jersey and New York are not currently required to submit their data through the Injury Tracking Application. 

Contact information for each of the state plans can be found on OSHA’s website.

A Nov. 22 OSHA news release indicated the agency intends to publish a notice of proposed rulemaking to reconsider, revise, or remove other portions of the final rule in 2018.

Note: Enforcement of the anti-retaliation provisions of the final rule went into effect on Dec. 1, 2016.

In 2016, ABC filed a lawsuit against the final rule, which remains pending.
 
More information about the final rule can be found on DOL’s website and on the Injury Tracking Application landing page.

This article is intended for informational purposes only and does not constitute legal advice or opinion.

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Construction input prices expanded 0.7 percent in November and rose 5.6 percent on a yearly basis, the largest increase since November 2011, according to an Associated Builders and Contractors (ABC) analysis of  Bureau of Labor Statistics data released Tuesday. Nonresidential construction materials prices also expanded 0.7 percent for the month and 5.4 percent for the year. Crude petroleum prices rose 11 percent in November and are 31 percent higher than this time last year. 

“It would be an exaggeration to suggest that construction materials prices are spiking,” said ABC Chief Economist Anirban Basu. “However, in the aggregate, materials prices are now rising at their fastest rate in six years. As always, there are many factors at work, but undoubtedly one of them is the ongoing improvement in the global economy and continued rapid growth in a number of emerging nations. Growth has also been accelerating in much of the advanced world, including the United States, Japan and much of Europe.

“Global growth is expected to hasten next year,” said Basu. “That should induce stable-to-rising global commodity prices next year, at least during January. That said, there is little reason to believe that materials prices will skyrocket as they did during periods both prior to and immediately after the financial crisis. Higher prices trigger more quantity supplied, which in turn helps to suppress price momentum. 

“Still, contractors must be prepared to deal with steadily rising costs of delivering construction services,” said Basu. “This will place more pressure on estimators who must increasingly build into their bids the possibility of cost increases over the course of individual projects. Labor shortages continue to represent the number one concern of construction firms in America, but materials price inflation can no longer be ignored.”

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Providing more evidence of a strengthening economy, Associated Builders and Contractors’ (ABC) Construction Backlog Indicator (CBI) set a record as it expanded to 9.45 months during the third quarter of 2017, up 9.8 percent from the second quarter to the longest backlog reading in the eight-year history of the series.  CBI is up by 0.8 months, or 9.2 percent, on a year-over-year basis.

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

“The latest backlog reading strongly suggests the post-2009 economic recovery is picking up steam and that the current construction spending cycle, in place since early 2011 for many contractors, is not on the verge of concluding,” said Basu. “Indeed, if anything, the CBI indicates that nonresidential construction firms are becoming busier due to a confluence of factors, including growing business confidence over the past year and a recent rise in energy prices, which is supporting more investment among energy explorers, producers and distributors.  

“With economic growth picking up recently, interest rates staying low, asset prices remaining high and confidence elevated among consumers and businesses alike, the nonresidential construction cycle stands to get even hotter in the near term.  That should represent a source of joy to contractors, but undoubtedly many are unnerved by growing pressures to secure suitably trained craftspeople who can support on-time, on-budget project delivery.  The upshot is that wage pressures will continue to build in the U.S. construction industry.  However, based on the most recent CBI, increasing delivery costs have not yet begun to meaningfully slow the nonresidential construction sector’s ongoing expansion cycle.” 

Highlights by Region

⦁ Backlog in the South surged to 11.3 months during the third quarter, the highest reading in the history of the series.  Many will conclude that this is at least partially due to the storms that raced across Texas, Florida and other communities during the quarter, but there are other factors at work, including the ongoing boom in commercial construction in the Dallas, Atlanta and Miami metropolitan areas.  
⦁ Increased activity in major cities along the Boston-to-Washington corridor continued to drive backlog data higher in the Northeast. At 10.2 months, the Northeast has matched its lengthiest backlog in the history of the series, in the fourth quarter of 2014. 
⦁ Backlog in the Middle States, where growth has been softer in places like Illinois and Kansas, shrank by 0.3 months during the third quarter. Still, regional backlog can be characterized as stable. 
⦁ Backlog in the West was slightly shorter during the third quarter and stands at roughly the same level as one year ago.  Given the elevated levels of construction apparent in markets like Las Vegas, Portland and San Jose, one can only conclude that the region’s lower average backlog level compared to other regions is at least partially attributable to a very competitive environment associated with an entrepreneurial climate that spawns more start-up construction firms than other parts of the country.  Wildfires impacting much of California also likely stalled a certain level of construction and contractual activity during the third quarter. 

Highlights by Industry 

⦁ Backlog in the commercial/institutional segment expanded briskly, increasing by nearly a full month during the third quarter, and now stands at 9.31 months. 
⦁ Average backlog in the heavy industrial category fell to 4.46 months during the third quarter, continuing what has been two years of steady shrinkage aligned with observed declines in construction spending related to U.S. manufacturing.
⦁ Backlog in the infrastructure category expanded during the third quarter to 12.53 months, the highest reading on record for the segment and an indication that improving state and local government finances may finally be translating into higher capital spending.  

Highlights by Company Size

⦁ Large firms, those with annual revenues in excess of $100 million, experienced a collective average backlog increase to 13.8 months during the third quarter. Despite the sharp quarterly rise, backlog in the category is virtually unchanged from the same time one year ago. 
⦁ Backlog among firms with annual revenues between $50 million and $100 million also surged during the third quarter, increasing by more than two months. Backlog in this category stands at levels last observed in 2013 when the construction recovery began to heat up in earnest. 
⦁ Backlog among firms with between $30 million and $50 million in annual revenues lengthened modestly to 11.4 months during the third quarter, the third highest reading on record. 
⦁ Backlog for firms with annual revenues less than $30 million remain remarkably stable at 7.7 months.  For the past eleven quarters, backlog for this group, which is heavily tilted toward subcontractors, has remained between 7.2 and 8.1 months.

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WASHINGTON, Dec. 8—The nation’s construction sector added 24,000 net new jobs in November, representing a 0.3 percent month-over-month increase, according to an Associated Builders and Contractors (ABC) analysis of Bureau of Labor Statistics data released today. 

Nonresidential construction employment added 8,600 net new jobs in November, a figure that would have been substantially higher were it not for heavy and civil engineering, which lost 7,800 for the month. In October, nonresidential construction firms shed 3,600 net positions.
 
The construction industry unemployment rate increased by 0.5 percentage points and now stands at 5 percent. While this increase is likely due to seasonal factors, an increase in the construction industry unemployment rate is not necessarily a bad indicator given ongoing skilled labor shortages. The unemployment rate for all nonfarm industries—a figure that is seasonally adjusted—remained unchanged at 4.1 percent in November and remains at a 17-year low.  

“Today’s employment report was quite good,” said ABC Chief Economist Anirban Basu. “The nation added 228,000 net new jobs in November, which makes it the second consecutive strong month for employment growth. Some of this performance may be attributable to interrupted hiring in August and September due to storms. However, for the most part, today’s report is consistent with long-term trends indicating strong demand for human capital and an economy poised to avert a downturn in the near term.”

The labor force participation rate remained unchanged at 62.7 percent, quite low by historic standards. Labor force participation remains low for a host of reasons, including the ongoing large-scale retirement of baby boomers, a significant fraction of whom have skills pertinent to the delivery of construction services.

“Indeed, the nation’s economy is humming,” said Basu “With consumer confidence remaining elevated and wage pressures continuing to build, there is little reason to believe that America’s consumer-led recovery is about to soften. This is good news for construction firms,  particularly those that specialize in private construction,” said Basu.

“The wildcard is business investment. If ongoing efforts to deregulate industries are ultimately combined with productive tax reform, the economy could become turbocharged as significant growth in business spending joins existing consumer spending momentum to return the United States to sustained growth of 3 percent or better,” said Basu.

Even in the absence of this long-desired dynamic, the nonresidential building construction sector has managed to increase employment by 3.1 percent during the past year, while the nonresidential specialty trade contractor segment has increased employment by 2.7 percent.  

“Unfortunately, investment in infrastructure continues to be inadequate in much of the nation, which represents a significant limit to the upside. Correspondingly, heavy and civil engineering employment is up only 1 percent over the past year,” said Basu.

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The majority of commercial and industrial contractors are confident about sales growth, profits and staffing levels heading into 2018, according to the latest Associated Builders and Contractors (ABC) Construction Confidence Index (CCI). Despite rising construction labor and materials costs, 55 percent of contractors expect their profit margins to expand in the first half of 2018.

“There are many reasons for confidence among the nation’s construction firm leaders,” said ABC Chief Economist Anirban Basu. “American wealth has never been greater in absolute terms as the economy experiences faster wage growth, surging equity markets and rising home values. Consumer confidence is at a 17-year high, while unemployment is at a 17-year low.

“Despite the completion of approximately eight and a half years of economic recovery, both inflation and interest rates remain low,” said Basu. “The combination of elevated wealth and confidence with low borrowing costs drives spending and investment, which supports higher demand for construction services.” 

All three diffusion indices in the survey remain above the threshold of 50, which signals ongoing optimism.   

The CCI for sales expectations fell from 59.7 to 57;
The CCI for profit margin expectations fell from 56 to 53.5;
The CCI for staffing levels fell from 59.5 to 56.7.

In recent quarters, certain commercial segments have been prone to generate especially large increases in construction spending. These include lodging, office and amusement/recreation. Therefore, commercial contractors are particularly upbeat. Contractors whose businesses rely more heavily on public work remain less ebullient.

The following chart reflects the distribution of responses to ABC’s most recent surveys. 

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The U.S. Senate passed sweeping tax reform legislation on Dec. 2, overcoming a number of setbacks over the course of a long week.  The effort to win over holdouts and cobble together the necessary votes led to a number of late-breaking changes to the bill, culminating in what was essentially a party line vote, with Senator Bob Corker (R-Tenn.) as the only dissenting Republican.

The process now moves into the final phase, as the Senate and House seek to resolve the differences between their respective bills.  Last night the House voted on a motion to go to conference on the tax reform bill.

Named conferees will be:
Ways & Means Committee: Kevin Brady (R-Texas), Devin Nunes (R-Calif.), Peter Roskam (R-Ill.), Diane Black (R-Tenn.), Kristi Noem (R-S.D.)
Natural Resources Committee: Mike Bishop (R-Mich.), Don Young (R-Alaska)
Energy & Commerce Committees: Greg Walden (R-Ore.), John Shimkus (R-Ill.)

On Dec. 6, the Senate will take up their motion to go to conference and name their conferees.

Once in conference, we expect an initial public meeting to start the conference the week of Dec. 11. After that, much of the conference work will be done in a closed setting. The timing of the conference is unpredictable, but it points to a conference report introduced in both chambers by the week of Dec.18 and passed by both the House and Senate by Dec. 22 (before a new Senator from Alabama is certified), and signed by the president by the end of the year.

ABC is working with both chambers to see that AMT repeal is included in the final package (it was included in the House bill).  

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