Under the Hard Hat

Author: Jonathan Barnes

  • How to attract construction workers to remote job site locations

    How to attract construction workers to remote job site locations

    Funneling $1 trillion in infrastructure projects into the economy through the Infrastructure Investment and Jobs Act has spurred construction work in remote locations. But employers still must attract skilled workers to areas where they’re needed—sometimes far away from their homes. Incentivizing work, partnering with local hotels for lower rates, and connecting workers with training and education opportunities can help attract workers to remote job sites.

    5 ways to entice remote work

    1. Give incentives to work away from home

    Offering substantial per diem payments, higher hourly pay, and other incentives can entice workers to remote job site locations. If there’s little incentive to leave home, workers won’t. 

    Employers can also offer per diem payments for food and lodging and a weekly or bi-weekly paycheck as part of their salary.

    “It’s tax-free cash, so many people try to save on lodging to save some of that per diem pay,” said Rita, a construction worker in oil and gas development who has worked on remote projects.

    Employees might see a significant pay boost if their employer helps them save on lodging costs. In a way, it’s like raising their wages without paying them more.

    2. Partner with local accommodations to negotiate better rates for employees

    A penny intentionally saved for your employee might mean two pennies earned for you in return, thanks to a grateful and more productive worker. A well-rested employee is also a safer employee. 

    Arranging the right accommodations for employees can even be a life-or-death matter of safety in work areas where medical facilities are few and far between. Studies also show that long work hours combined with poor sleep quality can increase the risk of workplace injuries. According to the National Sleep Foundation, sleep deprivation increases the likelihood of a workplace accident by 70%. 

    Lodging choices are about the individual worker’s comfort level, though. Many of Rita’s co-workers worked remotely while living in recreational vehicles (campers), while others room-shared or found the cheapest motels possible to save money.

    3. Advertise the location benefits

    For Mike, a union painter from oft-cloudy Western Pennsylvania, a few things enticed him to jump ship from PA to Florida: 

    • The promise of steady work with overtime 
    • Being in a warmer climate 
    • Higher pay

    Although Mike still makes union-scale wages, receiving $175 per diem for living expenses helped him move south. Given the other positives of this remote work, Mike couldn’t say no to the offer.

    He’s enjoying the work and his home away from home. “I don’t mind all the sunshine,” he said.

    4. Connect training and advancement opportunities to remote project work

    Offering training opportunities helps workers advance their careers. Offering education and the ability to advance their career in remote locations can entice workers to make the move. 

    Most construction companies recognize the need to attract employees with some technical knowledge. So, construction-focused apps and tech tools are becoming more prominent on construction sites and anywhere contractors work. Employees are often eager to learn these new tools.

    As such, one of the easiest ways to entice workers to move locations is to tie a remotely located project with new technology or tools training for employees. That way, they can learn more while they earn more.

    5. Offer the ability to work every day

    Overworked employees can be a massive hindrance to company success, but while balancing work and off-time is a juggling act, many employers are under strict deadlines to complete projects. 

    Couple that with the fact that employees don’t always enjoy being away from home—those working remotely may prefer to work long days with overtime.

    At a minimum, Rita worked six 10-hour days while working in a remote location. She also had the opportunity for more overtime on Sundays and often took advantage of the extra work.

    Bottom line: Attracting employees to remote job sites is more art than science

    Getting employees to work in remote locations happily means paying attention to their needs—and more pay is often the greatest of needs. When companies increase worker pay, they’re more likely to comply with remote work locations. 

    The other part of the equation is making workers as comfortable as possible. Whether that’s with lodging and food costs or offsetting transportation expenses, every little gesture helps. But perhaps most importantly, it’s a matter of keeping workers happy by keeping them busy and productive.

  • Keeping workers amounts to three letters: P-A-Y

    Keeping workers amounts to three letters: P-A-Y

    The construction industry has one of the highest employee turnover rates of any industry. For people who work or have worked in construction, the reasons are obvious: inadequate pay and a lack of consistent work. Poor treatment by employers and few training opportunities can also lead employees to look elsewhere.

    Discrepancy between worker pay and inflation

    Low pay isn’t just relegated to the construction industry—it’s widespread. As inflation increases, companies can’t keep wages on pace, leading to unhappy and underpaid employees.

    A construction union I worked with in 1985—I made an hourly rate of $12.90 then—has lost $5/per hour in earnings on its union scale wage over the past 39 years. I called my old friend Jerry, who has worked in this union for decades, to find out how much members are currently making.

    Rather than keeping up with inflation and paying a wage of $37.25—the equivalent to a 1985 wage of $13—they’re paying $32.25/hour.

    That’s a union job, among the best-paid. They’ve lost $10,000 a year in wages for a full-time worker—and that’s if their pay had kept up with inflation, not surpassed it.

    Smart workers are asking employers to show them the money. 

    Unlike many workers, Jerry found steady work and fair treatment with a regional contractor that pays him more than the union scale. However, the construction industry, in general, is notorious for poor pay, with some earning as little as $12 to $16 per hour.

    How to solve the worker retention crisis

    When it comes to retaining employees in the construction industry, the answer is to address the problem of insufficient pay and take action.

    The construction industry is primarily composed of immigrant workers. It’s estimated that about 25%—maybe even 30% or more, depending on the source—of workers are non-native North Americans (that 30% represents 3.3 million workers), many of whom are here illegally. 

    Here’s the problem: Most people fail to realize that a high percentage of immigrants comprising the workforce heavily dependent on a single sector (construction) press wages down in that sector. Most companies also don’t realize that relying on foreign workers to fulfill labor scarcities isn’t a wise idea.

    Roughly seven million illegal immigrants have entered the U.S. during President Biden’s term, many of whom are working in construction. They are illegally competing with native workers and with those who’ve immigrated and have a clear right to work in the U.S. But competition is competition; regardless of your work field, you must compete to succeed.

    If employees want to improve their ability to earn and even stay with a company they work with, there’s a simple solution: take a systematic approach to improving themselves. 

    Here are four steps to do it.

    4 steps to become a better employee

    1. Consider your options

    To retain your job, you need to level up with other employees. Consider making your skills more competitive to increase your chances of being hired or recruited by a better-paying employer. 

    Spice up your resume, invest in additional training, and ensure your employer knows what you bring to the table. People recognize your value when you demonstrate it to them and when you remind them of it.

    2. Stick with good employers 

    Large companies aren’t always the best employers. If you struggle to earn a decent wage with a large construction company, go small. Search for local companies hiring for a position that fits your skill set.

    In my example above, Jerry found a steady employer in a regional contractor that does larger projects like utility line work.

    3. Understand your value

    Your work ethic and skillset are significant factors in determining your value as an employee. Understand what you bring to the company, and don’t be afraid to do more to increase your value. The more value you have as an employee, the higher wage you can request. 

    4. Expand your knowledge

    Increasing your knowledge and training is priceless. Look for opportunities to expand your knowledge; if you can’t find them, ask for them. Education and training go a long way in the construction industry—and it sets you apart from the crowd.

    However, retaining good workers in the long term is a two-way transaction. Diligent, skilled, and trustworthy employees are not easily replaceable and should be recognized. If you want to retain hard-working employees, give them opportunities to grow by encouraging regular training programs, continuing education, and more. 

    3 tips for employers to consider to retain high-level employees 

    1. Provide good pay and consistent work

    Construction can be seasonal, which doesn’t bode well for employees looking for consistent, year-round work. But if you want to retain good employees, you must plan for work, plan to grow, and diversify your company to meet new challenges.

    2. Offer training opportunities

    Most construction workers want to expand their knowledge to advance their careers—provide them with opportunities. A company that’s not growing won’t offer such opportunities.

    3. Don’t whine, act

    While most employees understand that companies have budgets, retaining good employees comes down to paying them a fair wage. If an employee requests a pay upgrade, don’t brush it off the table—seriously consider it. 

    Final thoughts

    The problem of retaining employees might be that there aren’t enough construction companies willing to pay employees decently. If more did, this problem of too few workers might completely disappear.

    Provide workers with the wages, training, and the steady work they need. Treat them as valued team members; they will produce and stay with you.

  • RENCO blocks provide a lighter and simpler building solution

    RENCO blocks provide a lighter and simpler building solution

    Miami-based construction materials manufacturer RENCO is changing the way people build structures. Their lightweight stackable molded blocks—composed of recycled glass fibers, recycled plastic, resin, and stone—are ultra-durable building materials capable of withstanding a category 5 hurricane, making them ideal for use in disaster-prone areas.

    Real-life LEGO for contractors

    RENCO USA offers a LEGO-like building system using blocks made of resins recovered from the boating industry, glass fibers, and stone—or “renewable composite”, which is how the company’s name arose. 

    The idea behind the structural building system is to help contractors do their jobs faster using a system of interlocking building components, including various sizes of blocks, columns, beams, joists, headers, decking, and connectors. The components are joined together by an adhesive. The blocks and other components are comprised of about 40% recycled materials. 

    The system was originally developed to accelerate rebuilding following a natural disaster in Turkey, but it can be used for buildings as tall as five stories, even in natural disaster-prone areas. 

    The block components are rectangular and topped with knobs that interlock and stack like LEGO blocks. The blocks are typically 8x8x16 inches and weigh 20% less than a typical concrete block.

    Selling point: RENCO’s blocks are similar to stackable concrete blocks but they are lighter, quicker to assemble, require little training, and are cheaper to transport. 

    Lakewood Village in Palm Springs, FL

    RENCO’s interlocking blocks system was recently used to construct four 3-story apartment buildings at Lakewood Village in Palm Springs, FL. The project was completed in November 2023 and employed 10 workers. Each of the four buildings was completed in about eight weeks.

    Led by architectural firm Arquitectonica, the Palm Springs project created 96 apartments in four identical buildings. The RENCO components for this project were manufactured and shipped from Turkey—a cost that nearly quintupled from $3,500 to $15,000 per shipping container post-pandemic, necessitating the construction of a U.S. plant for the company. The international supply chain has been seemingly permanently disrupted since the pandemic, and materials and shipping costs have skyrocketed. That trend is leading to more industrial investment in the U.S.

    The rise of prefab

    Prefabrication in construction has been gaining popularity for years. Entire buildings (sans foundation) are fabricated offsite and shipped to the work site for assembly. The same process happens with bridges, piers, and other larger structures. The reason: fabricating components of structures offsite is cheaper and often more accurately accomplished than building them onsite. It’s also faster.

    There’s a simple reason why RENCO’s building system is gaining traction: it offers precise, pre-construction component fabrication and building construction that’s affordable, lighter, and quicker to transport. 

    The technology is easy to assemble. The blocks are stacked on a concrete foundation and “mortared” with an adhesive that binds them together. It doesn’t require much more than a forklift operator and trained workers, a glue gun powered by a small generator, and a mallet to complete. No cranes, scaffolding, cutting, welding, or grinding of components is needed.

    RENCO’s system also offers the prospect of far less construction material waste on a job site. Construction sites typically create dumpsters full of waste materials, and contractors add about 10% extra materials when calculating what they need to account for waste. RENCO provides a nearly waste-free solution. Even the tailings from the blocks are recycled by the company to be used in mixes for more building components.

    The system is attracting the attention of eco-minded builders and owners who want to build faster, cheaper, and more accurately while creating a smaller carbon footprint. Fewer trucks are required to ship RENCO’s lighter-than-concrete components, and the company says RENCO’s components have passed over 400 rigorous safety tests.

    RENCO’s building system also creates monolithic structures that can resist forces in excess of 160 pounds per square foot and 85-mile-per-hour winds.

    According to the U.S. Green Building Council (USGBC), the RENCO Structural Building System has been tested, analyzed, and evaluated in American National Standards Institute (ANSI) certified laboratories to American Society for Testing and Materials (ASTM) standards for material and physical characteristics, structural performance, fire resistance, and environmental resistance. USGBC is backing the technology’s dependability and has issued an Evaluation permitting the use of the RENCO Structural Building System in Florida’s High-Velocity Hurricane Zone.

    RENCO blocks prove ultra-practical—but not completely sustainable

    While RENCO USA claims its products as sustainable, it’s unclear whether that is entirely correct. The company uses resins from the boating industry, in part, to construct its building components. 

    There are three main types of boat resins: 

    1. Polyester
    2. Vinylester
    3. Epoxy

    While these materials may withstand degradation and the composite blocks are insect and rodent-resistant, they are susceptible to sunlight and must be covered in an exterior facade within three months of construction. 

    It should also be noted that the above chemicals are toxic to the environment and people, making them unsuitable for anyone looking for sustainable building materials. 

    While repurposing wasted boat building materials is laudable, in this case, it’s encapsulating them in a heat-sensitive composite material that might, in the future, be compromised in some way and have negative effects on the environment.

    During assembly, the block system is bolted to a foundation and the block courses are glued together, forming a monolith of the structure. The system appears to be similar to Autoclaved’s concrete building system, which uses aerated concrete blocks that are lighter than conventional concrete blocks for building construction.

    But according to RENCO president Kenneth Smuts, RENCO’s components are lighter than the competition, faster to assemble, more economical, and longer lasting.

    The firm is currently building a 50,000-square-foot manufacturing plant in Jupiter, FL, which is set to be completed by mid-July. The plant will be able to produce $100 million in products annually. RENCO plans to create other plants as regional facilities across the U.S.

    The system provides an obvious benefit that contractors and owners might want to get: a savings of 5% overall on a construction project’s costs, Smuts said. RENCO’s components last two to three times as long as conventional products.

    “They say the greatest buildings are those you don’t have to rebuild,” Smuts said.

    RENCO USA’s parent company is Coastal Construction, a Florida-based contractor performing $1 billion in projects annually in Florida.

  • These new technologies are modernizing the U.S. energy industry

    These new technologies are modernizing the U.S. energy industry

    The U.S. energy grid is often overtaxed—and sometimes undermaintained—but new technologies are helping to change the old power systems. Energy companies are becoming more efficient, safer, and profitable through the Industrial Internet of Things, sensor technology, Clean Hydrogen, and business management platforms built for the energy sector.

    6 ways technology is helping improve the energy sector

    1. Industrial Internet of Things (IIoT) helps automate tasks and avoid human error

    By automating manual tasks through IIoT devices, energy companies are reducing human mistakes and boosting productivity. They’re increasing the efficiency of their operations and gaining actionable data that can be used for decision-making.

    2. Sound business decisions are based on accumulated data

    Sensors collect data and analytics throughout an energy company’s infrastructure networks. This information can be used to predict maintenance needs, weak points, and more—and it’s one of the most reliable ways for companies to make sound decisions.

    3. Offloading from offshore wind helps build stronger grid connections

    Offshore wind farms are prevalent on the East Coast of the U.S., and they can generate vast amounts of power—but that power must be offloaded to the grid for use. To do so, energy companies must improve infrastructure and methods of regulating flow.

    4. Real-time monitoring and sensors are streamlining energy company operations

    Triax uses IIoT sensors to collect and send data into the platform’s cloud-based software, allowing users to get real-time information on onsite work. 

    Pain points that slow productivity can be identified and analyzed, equipment use can be tracked, and speedier evacuations and responses can be orchestrated through the platform.

    Live alerts, site-wide notifications, real-time monitoring for emergency evacuations, and more information can be amassed through Triax’s platform.

    5. Costly utility strikes during construction are being avoided.

    The Common Ground Alliance (CGA), a national nonprofit trade association, estimates $30 billion in societal costs from damage to communities’ critical underground infrastructure. Facility repair, property damage, medical expenses, and business closures are some factors accounting for those costs. 

    According to CGA, an underground utility strike occurs every 62 seconds in the U.S., but one software platform uses energy-tailored technology to decrease the incidence of strikes.

    ProStar’s platform was developed for contractors doing subsurface utility work. The cloud-based system means data is always accessible. Employees can create an accurate record of site conditions, which can reduce labor hours. 

    Government agencies, including the Colorado Department of Transportation, are increasing the use of ProStar.

    ProStar’s PointMan tool allows users to add data from GPS or locator devices into the system. Collecting and arranging all pertinent information related to a project and connecting it with a GPS or locator device provides safer worksites and decreases contractor and utility company losses due to utility strikes. 

    6. The energy sector is modernizing operations, partly with help from Clean Hydrogen

    Clean hydrogen helps modernize the energy sector, especially in decarbonizing heavy industry and fueling fleets. It’s also being used to produce construction materials and other products. It aligns with various government decarbonization goals and offers a cleaner source for consumers.  

    “Clean hydrogen represents a pivotal shift towards decarbonization that can be used across various sectors, including process heat and steam, transportation, and industrial processes,” said Leigh D’Angelo, Manager of PR for Modern Hydrogen. “The appeal of clean hydrogen lies in its ability to produce energy without emitting CO2.”

    Modern Hydrogen’s role in greening the energy sector is through methane pyrolysis technology and the on-site production of clean hydrogen from natural gas. It also produces hydrogen and captures solid carbon for use in construction materials.

    The company has raised $100M from Bill Gates and industry leaders. Its recent $32.8 million Series B-2 financing round was supported by NextEra Energy, Miura, and National Grid Partners. The company even teaches the oil industry about product creation.

    “Our approach avoids the need for extensive new infrastructure, thereby offering a pragmatic and cost-effective pathway to adopting clean hydrogen,” D’Angelo said. “We use the carbon that has been stripped from natural gas in asphalt. Modern Asphalt has sequestered carbon in it, uses less oil than conventional asphalt, and performs better across a larger range of temperatures.”

    Over time, North America will need to rebuild its electricity grid, especially if governments want greater integration with renewable energy technologies. In the U.S., many people already are working on this problem.

    “Due to the intermittent nature of power output from wind and solar, combined with more variable demand (especially as we see increased levels of electric vehicles), it will become necessary to modernize the grid with improved techniques for sensing, communication, and control of grid resources,” said Joseph Paladino, Senior Advisor for the U.S. Department of Energy’s Office of Electricity. “Currently, states and regions are working on their grid investment strategies to enable the application of these renewable resources.”

  • Build a winning team with these 5 psychological safety tips

    Build a winning team with these 5 psychological safety tips

    Psychological safety is when workers feel safe to express concerns, raise questions, or talk about mistakes without thinking they’ll be judged or punished for it. Having a psychologically safe space in the construction industry is crucial due to the dangerous nature of the work. Open communication, respect, and constructive responses to failure are a few ways to improve psychological safety in the workplace. 

    Quick look

    • Psychological safety is a team belief that it’s okay to take risks and workers won’t be punished, judged, or rejected for raising opinions or concerns.
    • Construction is a dangerous field, and improving psychological safety on job sites is a moral obligation for employers and is critical to team unity and success.
    • Respect, open communication, and making leaders approachable are simple ways to improve psychological safety on construction sites.

    What is psychological safety?

    Psychological safety is a team belief that it’s okay to take risks. By doing so, others won’t reject, punish, or embarrass a worker for raising ideas, questions, concerns, or mistakes. It’s a 50-plus-year-old concept that gained prominence recently after Google discovered it is the most crucial factor in a team’s success.

    Put simply, an environment that’s psychologically safe reduces “a person’s anxiety about being basically accepted and worthwhile.” An individual will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes, and the team as a whole is safe for interpersonal risk taking.

    Why psychological safety matters in construction

    “When we’re confident and comfortable, we’re capable of great things. When we’re worried, uneasy, or distracted, our work will suffer, said Kaitlin Frank, eMOD Founder and Superintendent at Dome Construction. “And in construction, being just a little ‘off’ puts you in harm’s way.”

    Adopting psychological safety in your strategy isn’t just a moral obligation for employers—it’s crucial for team unity and success. It’s also essential to build a foundation where every worker feels safe to speak up, regardless of the situation, where mental health is a priority, and where workers feel supported and heard. 

    Workers must be able to freely share their opinions, thoughts, and concerns without fear.

    But psychological safety is also about intentionally creating a workplace or team culture that supports the inclusion and engagement of workers. Cultural stigmas and mental health are huge pain points in the industry, but a psychologically safe space for workers recognizes and works to overcome those challenges.

    Put simply, a psychologically safe workplace increases productivity and performance. Forming deeper relationships increases motivation—it keeps workers focused on the job, improves workplace cohesion, and gets people engaged and speaking. 

    Here are five tips to engender psychological safety in your team. Doing so can build a more successful group while reducing the number of safety incidents and accidents.

    5 tips to improve psychological safety on your job site

    1. Openly communicate with your team

    Encouraging open dialogue is the easiest way to foster psychological safety. Encouraging disagreements, in some instances, can even be beneficial. Find ways to help team members express their ideas or concerns and solicit their opinions.

    Increasing your team’s comfort level through free speech reminds them they are valued.

    Openly addressing the stigma attached to mental health is another component of fostering psychological safety in the workplace. Incorporating these discussions into toolbox talks, meetings, and even weekly or monthly newsletters can raise awareness and make issues more mainstream. 

    Having peer-to-peer drop-in hours for managers also fosters a safe space and supportive environment for employees to connect and engage in meaningful conversations to address specific individual needs.

    2. Always be respectful to team members

    Engendering psychological safety helps replace the fear of speaking up with permission. A psychologically safe community means everyone respects other people and their views, regardless of where they sit in the pyramid.

    Don’t just solicit workers’ opinions and concerns—actually consider them. Evaluate them, and let them inform how you work and move forward.

    3. Respond constructively to failure

    Change your view of failure—losses and mistakes are an opportunity to learn. Failures will happen, but responding calmly and constructively will ensure they bring team unity and success. 

    Encourage innovation among team members and recognize their contributions.

    4. Make leaders approachable by rank-and-file

    Leaders must be available to listen to concerns or help settle disputes, and it’s their responsibility to ensure workers know their availability.

    Regularly ask for input from employees—your workers are immersed in the field daily. Asking team members questions shows you value their input and will encourage them to speak freely.

    5. Establish an open-door policy

    Leaders must create spaces and hours for their employees to share concerns or raise issues, but it’s also about establishing a space where employees feel comfortable doing so. Leaders must be available to team members for face-to-face conversations and to opine anonymously if they choose.

    Creating a true open-door policy is one of the simplest ways to improve psychological safety.

    Most workers do their best to succeed at their jobs and be part of a successful team. But to do so, they must feel safe—this comes through encouragement, open communication, and respect. 

  • 32% of homes are new construction but market is still tight

    32% of homes are new construction but market is still tight

    Newly built homes continue to sell well, partly due to a shortage in housing supply but also because of competitive interest rates for homebuyers. According to a new Redfin report, 31.8% of single-family homes for sale were new construction, a slight dip from last year’s high rate of 31.9% in the fourth quarter of 2023.

    New home construction has grown rapidly in the past decade out of necessity to serve consumers. The number of new constructions on the market is increasing, along with new developments in the pipeline, making it easier for buyers to choose a new home. Because interest rates for homebuyers are also highly competitive, purchasing a new house is sometimes a better choice for homebuyers.

    If given the choice, some buyers would prefer a newer home with the prospect of few short-term repairs and less of a financial commitment. 

    A higher availability of new homes on the market has likely spurred sales of new homes.

    “Newly built homes are selling quickly right now because builders are offering such good discounts,” said Heather Mahmood-Corley, a Redfin Premier real estate agent in Phoenix. “I recently had a buyer who wasn’t interested in a new construction home, but the builder offered such a good rate–5.25%–that they couldn’t afford not to take it. Another one of my buyers got a $10,000 credit for closing costs from a builder.”

    Low housing inventory improves new home outlook

    Market availability has a big impact on real estate’s direction. Fewer homeowners put their homes for sale last year, leading to less housing inventory for buyers, Redfin said. If buyers wanted a home, new construction was sometimes the only option—but they can be more costly than older homes. More than 40% of new homes sold in 2022 cost $500,000 or more.

    The situation is partly supply-and-demand driven. It’s also a question of developers and home sellers pricing homes in line with whatever the market will bear. 

    In some city neighborhoods where rowhouses were recently selling cheaply (within the past 15 years), even older, smaller but newly renovated rowhouses in city neighborhoods outside New York and other large markets often sell for $250,000 and up. The housing supply is still tight.

    Builders have hiked home prices, as well, said Christine Kooiker, a Redfin Premier real estate agent in Grand Rapids, MI. “One of the builders in Grand Rapids that focuses on entry-level homes now has prices in the mid $300,000 range. Not long ago, buyers could get a new construction home here for $250,000 or $300,000.”

    It’s unclear how long this new home construction and sales boom will last, but it doesn’t appear to be slowing down. The U.S. Census Bureau’s March report on housing starts had rosy news for builders and homebuyers. More new home inventory could ultimately result in a stronger buyer’s market.

    According to the U.S. Census Bureau, privately‐owned housing starts in February were at a seasonally adjusted annual rate of 1,521,000, 10.7% above the revised January estimate of 1,374,000 and 5.9% above the February 2023 rate of 1,436,000. Single‐family housing starts in February were at a rate of 1,129,000. That’s 11.6% above the revised January figure of 1,012,000. In February, 377,000 buildings with five units or more were started.

  • Price escalation clauses protect contractors and homeowners

    Price escalation clauses protect contractors and homeowners

    The impacts of the recent pandemic linger for many companies in volatile materials prices. Costs for lumber and other construction materials—in addition to costs for shipping—can fluctuate wildly from month to month. Price escalation clauses protect contractors from increasing job costs. 

    Competing needs in construction bedevil completion

    Contractors work on deadlines, and getting off course due to material or labor shortages has become a recurrent issue due to post-pandemic impacts on the supply chain. These types of problems can mean big trouble for a project’s progress and a contractor’s profitability—they can even result in a contractor filing for bankruptcy due to excessive losses resulting from unplanned surges in materials costs.

    By sharing the burden of unexpected cost increases with project owners, contractors can better understand such price fluctuations and ensure timely project completion.

    The problem: Many owners want all possible risks absorbed by consulting teams and contractors and often insist on fixed-price contracts that don’t have labor or material price escalation clauses. 

    While this sounds like a good idea in theory, it can often backfire on owners. When a contractor is forced to absorb costs it can’t afford, the contractor might be forced to cut corners or, worse, abandon the project.

    Still, contractors need to be able to control their costs even with price fluctuations. Ignoring this could end up being a big hassle for the owner and contractor, resulting in work stoppages and disputes, abandoned projects, bankruptcy, or lengthy and costly litigation.

    Both parties want a project that’s well-constructed and completed on time, but they need to find a middle ground to do it. That’s where price escalation clauses come into the picture. 

    How price escalation clauses help projects

    Owners want to mitigate risks when contracting a project, and in most cases, the solution is to have a contractor absorb unexpected costs. However, even if the contractor agrees to this, it isn’t a practical approach. 

    The reason: While some contractors typically want the burden of escalated costs placed on owners, that’s not realistic, either. 

    Instead, a collaborative approach must be taken to tackle this problem.

    The solution: A price escalation clause.

    While the benefits of a price escalation clause for the contractor are obvious, they can actually be beneficial for the owner, too. They serve to mitigate the risk of disputes down the road and, in turn, preserve amicable relationships between all parties involved.

    Price escalation clauses should include the following:

    • Material and labor that apply to the clause
    • A price index to quantify the escalation
    • Date, quantity, and value subject to adjustment
    • The method of price adjustment, meaning how the price index will apply to escalate the base price, including thresholds
    • Stipulations on which parties will accept risk of an increase

    If there is a seemingly fair allocation of risk, an owner may be more apt to accept a price escalation clause. So in some cases, a contractor or consultant team might want to share potential cost risks with the owner. They can also give the owner the benefit of getting a break on price costs if material prices fall below a certain threshold.

    Bottom line

    Creating a successful construction project that’s delivered on time is, in part, a question of managing many moving parts and moving targets. It’s also a matter of clear communication to ensure work is done properly and safely. 

    That’s why it’s important for all parties involved in a project to work together to ensure prices don’t torpedo the build. Price escalation clauses can help avoid negative outcomes for everyone involved with the project.

  • Construction backlog declined to 8.1 months in February

    Construction backlog declined to 8.1 months in February

    Contractors may be losing confidence in the backlog of work they believe they are facing, according to a recent Associated Builders and Contractors members survey. But good news: according to a survey that concluded on March 5, ABC’s Construction Backlog Indicator declined to 8.1 months in February. 

    The reading is down 1.1 % since February 2023. Even so, ABC said contractors remain confident about the work they will have to tackle over the next year.

    Backlog declines slightly

    The backlog of work fell in February for every size of contractor, with one exception: those with under $30 million in annual revenue. But over the past year, contractors with more than $50 million in revenues have experienced the greatest decline in backlog, the report said.

    “Backlog is declining, and confidence began to fade modestly in February,” said ABC Chief Economist Anirban Basu. “While it is far too early to predict an industrywide downturn given that confidence readings continue to signal growth along sales, employment, and profit margin dimensions, it appears that a rising tide of project cancellations and postponements has begun to make its mark.”

    It’s unclear what is driving the project cancellations, but inflation of the U.S. dollar, volatile materials and shipping prices, and other factors constantly impact construction pricing. The same factors could also be impacting the financial sector to some degree, slowing its ability to fund construction projects.

    “With excess inflation remaining stubbornly durable, at least according to certain measures, interest rates are poised to remain higher for longer. “That gives higher borrowing costs more time to upset the economic momentum that has so surprised economists over the past two years and has provided support for various nonresidential construction activities,” Basu said.

    But it’s hardly all gloom and doom—there’s a lot of positive news. Infrastructure spending through the U.S. federal government is spurring the creation and/or expansion of many projects across the country.

    “With so much federal money still entering the economy, there will continue to be support for growth in certain construction segments, including public works and manufacturing-related megaprojects,” Basu said. “But industry weakness is more apparent in segments that rely more purely on private financing.”

    ABC’s Construction Confidence Index readings for sales, profit margins, and staffing levels declined, but only slightly in February. All three readings are still above the threshold of 50, which indicates positive expectations for growth, at least through August.

  • Cutting down on cannabis use on job sites

    Cutting down on cannabis use on job sites

    Cannabis is legal in many states, and its use by construction workers is at an all-time high. Random drug tests, open communication, regular safety meetings, and access to resources are simple ways to maintain a cannabis-free job site. 

    Cannabis use and workplace safety

    Cannabis use will likely never be eliminated entirely from the construction industry, but companies can take precautionary steps to mitigate risks. 

    Vigilance is key when trying to reduce cannabis use, as is regular drug testing. Having the proper chain of custody of drug tests (keeping them in trusted and reliable hands after the test) is also important because people will cheat on the tests. 

    Having a cannabis-free worksite creates a more sober project, with fewer unproductive work hours, fewer mistakes, and fewer accidents. Creating such an environment requires presence of mind, a proactive approach, and a plan of action that is followed.

    Here are 7 ‘rules’ to follow to ensure your workplace remains drug-free.

    7 steps to reduce workplace cannabis use

    1. Implement random drug tests.

    It’s tough to beat a drug test if you don’t see it coming, so periodically, randomly choose a few employees and conduct a drug test. It’s also important to ensure employees know the repercussions of being under the influence at work.

    2. Use several types of cannabis tests

    Swapping tests isn’t uncommon, which is why urine tests for cannabis shouldn’t be the only tests used. 

    Swab tests are tougher to cheat on since the test is performed with others present. Still, allowing tests to be switched or tampered with will effectively nullify the point of the tests—to discourage and spot workers’ cannabis use.

    3. Encourage open lines of communication

    Snitching is typically frowned upon, but if it saves a life, it’s worth it. Being under the influence of drugs or alcohol on the job site doesn’t only endanger the worker’s life—it also endangers the lives of everyone around. 

    If you know someone on your job site is under the influence, let someone know. Preventing drug-related accidents through open communication and awareness will also decrease the chance of job site shutdowns due to OSHA investigations.

    4. Raise awareness

    Regular safety meetings shouldn’t just be about machine operation safety—drug safety should also be included. Sober workers are safer workers.

    5. Ensure access to resources

    Employees should have equal access to health and mental health resources—therapists, addiction programs, health professionals, insurance coverage, etc. 

    6. Encourage guidance

    Speaking from experience is one of the best ways to show support. If there are recovered addicts on your job site, encourage them to speak up and help others. People in recovery know the signs of addiction and may be the first to spot workers struggling with similar problems. 

    7. Implement strict drug-use policies

    Alcohol and drug policies are a must, and a zero-tolerance policy should be implemented and upheld—a lack of enforcement or consistency is grounds for trouble. 

    When it comes to curbing cannabis use in the construction industry, having a clear plan of action is imperative. Stick by the company’s established rules and issue warnings to workers who are caught under the influence. And if needed, hand them a pink slip if they cannot comply.

  • Stadium projects at a glance

    Stadium projects at a glance

    From huge multiyear jobs to sports parks and arenas, stadium projects in 2024 are enlivening cities across North America. Some are new construction, like CPKC Stadium, while others, like the Scotiabank Arena, are elaborate remodels of old structures.

    4 stadium projects being revamped in 2024

    Rogers Centre

    Location: Toronto, ON, Canada

    Contractor: PCL Construction

    Budget: $300 million

    For the last two offseasons, PCL Construction has continued renovations on the Rogers Centre, home of MLB’s Toronto Blue Jays. The first phase of the $300 million renovation completed in April 2023 included a new weight room, staff locker room, more social spaces and patios, and seat replacements.

    The second phase of the project includes a reimagined 100-level seating bowl and structure designed for baseball viewing. The bowl structure allows for seats facing the infield, improved sightlines, and closer seats to the action. A new Blue Jays clubhouse and the construction of three new premium clubs and seating sections are also part of the second phase.

    The stadium’s lower bowl was demolished in October when the contractor removed and recycled a whopping 29.5 million pounds of concrete and steel in just 13 days. Field-level excavations to make room for new facilities and premium clubs followed, along with the removal of 780 truckloads of material and bringing in another 530. 

    More than 300 workers will be on-site daily during the second phase of work, which is set to be completed by opening day on April 11, 2024.

    Scotiabank Arena

    Location: Toronto, ON, Canada

    Contractor: PCL Construction

    Budget: $350 million

    Maple Leaf Sports & Entertainment (MLSE) is investing $350 million into another revamp of the 25-year-old Scotiabank Arena in Toronto, Canada, with the help of PCL Constructors to further enhance the best-in-class sports and entertainment destination.

    The all-new Mastercard Lounge is the first of its kind, featuring a shared member’s space overlooking the bowl from the southwest corner of the 200 level. It also offers a premium viewing and dining experience. The revamp of Mastercard Executive Suites, complete with stone accents, enhanced in-suite technology, convertible accessible seating, and vaulted ceilings, will expand fans’ views during sporting events.

    Once the Maple Leafs and Raptors 2023-24 season wraps up, a complete revamp of the 100 Level concourse will begin along with the construction of new innovative spaces within the walls of the arena.

    PCL Construction originally led the design and construction of the venue with the help of Brisbin Brook Beynon (BBB) Architects.

    Intuit Dome

    Location: Inglewood, California, USA

    Contractor: AECOM Hunt and Turner

    Budget: $2 billion

    The joint partnership between AECOM Hunt and Turner for the revamp of the Intuit Dome is a historic one for basketball fans. The facility in Inglewood, California, is packed with nostalgia and amenities, featuring reclaimed wood from local basketball courts incorporated into the floors and walls and a basketball jersey from every high school team in California lining the concourse.

    With five basketball courts, including two-player practice courts, a promotional court, an outdoor court, and a game court, the Intuit Dome will have more courts than any NBA arena. It will also feature the largest double-sided halo display in an arena setting (38,376 square feet) and a modern bowl design that puts spectators closer to the action. Fans sitting in a Row 20 seat will be 45 feet closer than at the Los Angeles Clippers’ previous home, Crypto.com Arena.

    Work on the $2 billion project began in January 2022, with the concrete frame finished in July 2022. The arena will have seats for close to 18,000 fans. 

    The project is set to be completed by Fall 2024, allowing the Clippers’’ new season to commence at the arena. According to the Clippers’ fact sheet, the project will create over 7,000 construction jobs over its lifecycle.

    CPKC Stadium

    Location: Kansas City, Missouri, USA

    Contractor: J.E. Dunn/Monarch Build

    Budget: $117 million

    CPKC Stadium will be the world’s first stadium built specifically for a women’s professional sports team. It is expected to open at the start of the 2024 National Women’s Soccer League season and will be the home of the Kansas City Current.

    Located at Berkely Riverfront Park, the stadium will have 11,500 seats, all set within 100 feet of the field.

    Construction partners J.E. Dunn of Kansas City, the women-owned Monarch Build, and the female-led Henderson Engineers of Lenexa, Kansas, are tackling the privately funded $117 million project.

    The project was first announced in 2021, but the new name, CPKC Stadium, was just announced to the public last year, with Canadian Pacific Kansas City, the only railroad connecting Canada, the U.S., and Mexico, claiming the naming rights.