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October 29, 2009

INDUSTRY ACCESS*

Mohawk Flush Doors Halting Production in South Bend, IN

Mohawk Flush Doors, a subsidiary of Masonite Corp., is ceasing production at its door manufacturing plant in South Bend, IN laying off 73 employees, reported IndyStar.com. The company anticipate that operations at the plant will be phased out over the next three months and all operations at the facility will cease by the end of January. Full Story

Click here for more Industry Access news including recent new hires, merger & acquisition activity and who's offering new products.

* DHI Members may submit news releases to be considered for inclusion in DHI's IndustryWatch. Send to: jmadden@dhi.org.

BUSINESS UPDATE

The index of U.S. leading economic indicators rose in September for a sixth straight month, showing the economy is likely to expand into early 2010. The Conference Board's gauge of the economic outlook for the next three to six months climbed a greater-than-forecast 1%, contributing to the biggest six-month gain in 26 years, reported Bloomberg.com. Full Story

New technical support documents from the U.S. Department of Energy (DOE) and the DOE national laboratories provide recommendations on how to achieve 50% energy savings in a number of commercial buildings. The documents describe the assumptions, methodologies, and analyses used to reach energy savings over ASHRAE/IESNA Standard 90.1-2004, reported Environmental Leader. Full Story

The September Producer Price Index for Wood Doors (flush & panel, interior & exterior) was up 0.3% from 2008 and the Other Wood Doors (Incl. garage, screen, storm, etc.) PPI was up 1.7% compared to a year earlier. Compared to August, the unadjusted September PPI was up 0.1% for Wood Doors and unchanged for the Other Wood Doors category, according to the Bureau of Labor Statistics. The PPI for Metal Doors, Sash & Trim was unchanged from August and down 1.4% from 2008. The PPI for Builders Hardware was down 3.9% from 2008 but up 0.1% from a month earlier. Click here to view the full September Producer Price Index report. (PDF file - Wood Door information is on page 16, Builders Hardware is on page 21 and Metal Door data is on page 22)

As the nonresidential construction industry continues to struggle, the Architecture Billings Index (ABI) showed a nominal improvement in September. The American Institute of Architects (AIA) reported the September ABI rating was 43.1, up slightly from 41.7 in August. This score indicates a decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 59.1, its highest level since September 2007. Full Story

CONSTRUCTION & DESIGN

Green building currently accounts for five to nine percent of the retrofit and renovation market activity by value, which equates to a $2 billion to $4 billion marketplace for major projects, according to a new report from McGraw-Hill Construction. By 2014, this share is projected to grow to 20%-30%, making it a $10 billion to $15 billion market for major retrofit projects, according to the report, Green Building Retrofit Renovation: Rapidly Expanding Market Opportunities Through Existing Buildings. Full Story

The value of U.S. construction starts in 2010 is expected to climb 11% next year to $466.2 billion, according to McGraw-Hill Construction's 2010 Construction Report. The report noted that this year construction starts are down an estimated 25%, but noted benefits from the stimulus act will broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types, reported BusinessWeek. Full Story

Year-to-date value of construction starts through September 2009, excluding residential contracts, totaled $184.7 billion, 12.8% less than in the same period in 2008, reported Reed Construction Data. Individual month of September starts were 20.1% lower than in August so the September decline was about 7% after seasonal adjustment. Nonetheless, the starts trend has recently improved after the plunge in June. Starts averaged 5% higher in July-September than in the same period last year. Including the depressed June starts, the seasonally adjusted starts trend is approximately stable so far this year. Full Story

Total construction in 2009 and 2010 will be down 14% and 5% respectively, according to FMI's Construction Outlook. Nonresidential construction will decline 13% in 2009 and 16% in 2010. Full Story

Led by sharp declines in private sector building, overall New York City construction spending is expected to decline by 20% in 2009, according to New York City Construction Outlook 2009-2011, an annual forecast and analysis prepared by the New York Building Congress. The situation seems to be stabilizing, however, and it is possible that the City will get through the current downturn without further deterioration in annual spending. Full Story

Gillette Children's Hospital plans to begin construction on a $42 million expansion project in St. Paul, MN in early November. The project will include a new 52,000-square-foot building that will house several outpatient services, including including rehabilitation therapies and Gillette's Center for Gait and Motion Analysis, reported Minneapolis/St. Paul Business Journal. Full Story

Five New Jersey school construction projects have been delayed for months because of a fight between the state and a contractors group about the bidding process. The state Schools Development Authority said it can cut costs and speed up projects by combining the design and construction phases, but the Mechanical Contractors Association of New Jersey said the process would be unfair to small contractors and would ultimately cost taxpayers more, reported The Star-Ledger. Full Story

Construction teams broke ground on the San Francisco General Hospital rebuild project, an $887 million initiative to build a hospital that will meet state seismic safety standards, reported the San Francisco Chronicle. Full Story

Shelby County (TN) government is close to signing a $56.7 million agreement to pay for new school construction projects in both the city and county systems, reported The Commercial Appeal. Full Story

SECURITY & SAFETY

Districts including Livonia Public Schools and Clarenceville School District in Michigan and Revere Public Schools in Massachusetts are among the 128 beneficiaries of grants from the United States Department of Justice Office of Community Oriented Policing Services (COPS) issued to law enforcement agencies and municipalities to enhance school safety in 38 states. The grants, totaling $16 million, were awarded under COPS' Secure Our Schools program, which provides funds for security gadgets and services in schools and on school grounds. The Secure Our Schools program will provide up to 50% of the total cost for installation of closed-circuit surveillance systems, metal detectors, locks, lighting, fencing, and other equipment. The grants can also be used to pay half of the cost of security assessments, security training, and other services, reported TheJournal.com. Full Story

GOVERNMENT AFFAIRS

Vice President Biden unveiled Recovery Through Retrofit, a plan designed to expand green job opportunities and boost energy savings by making homes more energy efficient. The plan includes provisions to establish a home energy rating system and make financing for home retrofits more readily available, reported Window & Door. Full Story Download the report

Sen. Jay Rockefeller and Sen. Chuck Grassley have introduced legislation that would make it easier for consumers to take advantage of a tax break in the stimulus package intended to encourage the purchase and manufacture of energy-efficient doors, windows, and skylights. "This bill allows more windows and doors to qualify for the energy-efficiency credit," Grassley said. "Also, this bill allows consumers to receive this energy-efficiency tax credit for doors and windows that are appropriate for their region. And it eliminates confusion created when consumers buy Energy Star windows and doors but are disappointed to learn the products don't qualify for this tax credit." Full Story

Virginia Governor Timothy M. Kaine announced the availability of $119 million in American Recovery and Reinvestment Act (ARRA) bond authorizations for local school divisions to finance energy efficiency improvements and renovations, as well as renewable energy projects for public school buildings. Projects will be financed through the Qualified School Construction Bond program (QSCB), and will be selected through a competitive evaluation process. Eligible projects can include, but are not limited to, improving heating, cooling and ventilation systems and controls, building improvements such as insulation and windows, more efficient lighting, as well as solar photovoltaic, solar hot water, biomass, or on-site wind power systems. Full Story

More than 131,000 progress reports on stimulus funding will be posted Friday on Recovery.gov, the government's stimulus-tracking website. Much of the data will include corrections to the first version of reports filed by fund recipients earlier this month, reported The Washington Post. Full Story

As part of its efforts to stimulate economic recovery, the Obama Administration announced on Oct. 21 a new set of initiatives to help spur lending to small businesses. The initiatives will use the Troubled Asset Relief Program to lower the cost of capital for smaller banks and community development financial institutions that present plans to the Small Business Administration for increased small business lending through the SBA's flagship 504 and 7(a) programs. It will also more than double the maximum size limit of some of its guaranteed loans to small business owners, reported BusinessWeek. Full Story

BusinessWeek has launched the Small Business Policy Ticker, a news feed which will help you follow the policy news that matters to small business owners. Full Story

The legal waters swirling around construction defect claims have gotten murkier for both residential and commercial contractors due to a recent decision by the Oregon Court of Appeals. The court ruling makes it more difficult for contractors to establish that they have a "special relationship" with property owners. It also allows owners to file negligence claims based on breaches of state building codes, which could bode badly for contractors, reported the Daily Journal of Commerce (OR). Full Story

SMALL BUSINESS NEWS

Unemployment Insurance

The Senate plans to consider legislation to extend the temporary extension of unemployment benefits for another 13 weeks. Only the unemployed in states with high employment rates would be eligible. The final litmus test has not been decided but, at last check, some 25 states would be eligible.

Estate Tax

With each passing day, it appears the House will consider a permanent freeze of the estate tax exemption and top rate at 2009 levels. That is the good news. The bad news is that they are talking about attaching to it legislation to create a statutory pay-go requirement. Congress has adopted “pay-go” budget “rules.” The last statutory pay-go requirement expired in 2002. Earlier this year, during the budget debate, the fiscally conservative House Blue Dogs arrived at an agreement with the House leadership that they would let the budget resolution move forward provided the House leadership brought a statutory pay go bill to the floor. In addition, the leadership was able to convince the Blue Dogs, that if the statutory pay go bill was enacted, four items would be exempt from the requirements. The permanent estate tax freeze was one of the four.

DHI's Jerry Heppes sits on the board of the Small Business Legislative Council. If you'd like more information on these or other issues affecting small businesses, feel free to contact him at jheppes@dhi.org.

This material is protected under copyright law and contains confidential information. It is for the sole personal, informational use of DHI members. It cannot be distributed, reprinted, referenced as a source for attribution, or otherwise made public.

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