An Upward Trend in Commercial Construction? (News Note)

Year-end economic indicators demonstrate that private commercial construction may be increasing in 2012, primarily as demand grows for new projects built in the United States.

According to an article in Businessweek, the Architecture Billings Index held at 52 in December, indicating a modest expansion in the market. The American Institute of Architects said that the commercial and industrial component of the number climbed to 54.1 in December, the highest in 10 months.

The monthly survey of U.S.-based architecture firms is one of the main indicators of nonresidential construction, and these numbers suggest that modest improvement may be on the horizon.

The information is confirmed by data from the Census Bureau that shows that spending on lodging, office, commercial and manufacturing buildings grew 8.2 percent in November to $9.2 billion from a year ago. These types of commercial and industrial projects are historically canaries in the mine and are usually the first part of the industry to improve as the economy expands.

Other indicators, including vacancy rates, are also pointing towards recovery. U.S. office vacancies fell in the fourth quarter to 17.3 percent, the lowest since 2009, from 17.4 percent in the prior period and 17.6 percent a year earlier.

The architecture association’s billing index historically has been ahead of improvements in building activity by about nine to 12 months; because this recovery has been so weak, a construction rebound is coming later in the economic cycle, according to leading economists.

What about you– do you think construction is on the upswing?  Are clients still shy to pull the trigger on ambitious projects?  Share your thoughts on what these numbers mean to you in the comments section, below. 

And if you haven’t already, sign up to get your free copy of the white paper, “7 Critical Mistakes that Engineers & Architects Make During Contract Negotiation and Execution that Sabotage their Projects & Invite Litigation”.  You can download your copy by going to the form on the right hand side of the blog.

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Green Construction Creates More Than a Sustainable Future – It Creates Jobs! (guest post)

usf imageToday, a guest post on green design by the folks at University Alliance, in partnership with the University of San Francisco’s higher education program. They offer an online master certificate in supply chain management, and sustainable supply chain management.

The unemployment rate in the United States is not going to magically decrease. So what can the government and investors do to help create jobs for Americans? Building more energy efficient infrastructures comes with many benefits, including an influx of jobs, energy cost savings, and a more sustainable future. Most people believe in sustaining the environment, but many feel concerned that green building construction is too expensive. Let’s look at some specific facts to analyze green solutions in a realistic way: where has “going green” worked, why has it worked, how does it actually create jobs and who is going green in American right now?

While Americans continue to wrangle over the financial efficacy of green solutions, green power has taken off in Taiwan, Korea and Hong Kong.  LEED, Leadership in Energy and Environmental Design, is a rating system for the design of green buildings. Taipei 101, the second largest building in the world which is located in Taiwan gained the LEED designation. South Korea plans to grant extensive economic stimulus to green ventures while China will construct 35 million meters of green buildings in Beijing. In answer to both the growing global pressure and the American green movement, President Obama has created a Better Buildings Initiative committed to the idea that green buildings preserve energy and create jobs.

Countries that succeed in creating green buildings have chosen to make the investment. While investing in efficient energy use promotes both job growth and environmental stability, investment options need to be clearer. Solar heating, harvesting of rainwater and natural lighting are just a few practical ideas which can create great savings for each of us.

Change is naturally difficult in a poor economy. Unemployment has doggedly stuck to the 9 percent level. That forces the question: will green buildings truly create jobs or not? Job growth partly depends on the sectors of the economy that create jobs at a medium to high percentage rate.  For instance, the energy sector and the manufacturing sector create jobs at a much lower rate than do the construction sector and the government sector. This means that when we invest in the construction of green buildings or in green renovation, we are putting our resources into a sector which creates a high level of jobs on average. Green building projects do promote reliable job growth.

Many green building initiatives are on the rise in America.  Siemens has announced four hundred positions in green technology across thirty-nine states. In Baltimore, one of the largest roof-mounted solar installations will soon be built.  Projects like these create work, foster innovative thinking and control energy costs for both companies and the government. But above all, they give other companies a viable path to follow. Additionally, the president’s Better Building Initiative will give a tax credit of as much as $1.80 per square foot for buildings that fully utilize green solutions.

So much depends on how we perceive green energy. Is this a standard we want for all buildings or is it a standard that only the wealthiest can achieve? Though U.S. companies are leading the way in green technology including smart lighting, energy management, and efficient heating, we have yet to realize our complete potential in the construction of green buildings. At this time, understanding the jobs that can truly be created through green power could create both amazing and sustained change.

What do you think? Do you believe that green buildings and green renovation can help kick start the U.S. economy?  Share your thoughts in the comments section, below.

Project Management – learn it, use it, avoid a lawsuit (Free Webinar– THIS Tuesday!)

listeningWant to learn more about how to use project management as a risk avoidance tool?  Sure you do! 

Join the Hall & Company folks for this month’s free webinar entitled, “Effective Project Management Practices as a Key Risk Management Strategy.”

The webinar will discuss:

1. The essential elements of a solid Project Management Plan and why “Planning a project will not guarantee success, but failure to plan will guarantee failure.”
2. Why your project’s scope, schedule and budget are considered a “three-legged stool” and how to manage the big risks associated with project changes.  
3. Why effective communications are absolutely essential to project success, why poor communications have been described as the biggest contributor to project problems and what every project manager needs to know about communicating with their clients.
4. Ensuring quality in every aspect of project delivery as a fundamental risk management strategy.  The quality of the project and project deliverables will be remembered much longer than the project’s schedule, budget or project manager!  
5. Why project risks need to be identified, understood and managed so they don’t become business risks for your firm.

When?  THIS Tuesday, February 21, 2012 at 1pm EST

Register Here

This presentation has been approved for AIA Continuing Education credit (1LU).

Happy listening!

Photo: (c) Mike Quinn via Creative Commons license.

5 Reasons Why You Need Arbitration for a Construction Dispute (Guest Post)

Today we welcome another guest author to the blog– Jonathan Newby.  Jonathan is in the brokerage business, and runs a website relating to brokerage fees.  Thanks Jonathan for your sharing your thoughts today.

5 signArbitration may be a better alternative to some construction disputes, assuming that you use a qualified and skilled arbitrator or arbitration panel.  Here are five benefits for using arbitration over litigation:

  1. Arbitration means that the decision maker is an experienced industry professional instead of a lay jury.
  2. Arbitration can provide better protection for your assets by minimizing your risk of large losses sometimes seen with jury verdicts.
  3. Arbitration can provide flexibility in scheduling, versus court where you are told when and where to show up without much room to negotiate.
  4. Arbitration can put an end to your case faster.  The time taken by an arbitrator is usually less than that to get a case to court to resolve a construction dispute.
  5. Arbitration costs can be much less when compared to the one charged during any other legal process like litigation.

These are five reasons why arbitration may be better for your construction dispute, so consider using an arbitration provision in your next construction contract.

Editor’s Note:  As I’ve previously noted, there are pros and cons to arbitration in lieu of trial.  The better venue is in part based on the type and size of contract, as well as numerous other subjective considerations.  Discuss whether arbitration is appropriate for you with your construction law attorney.

Thoughts, comments, or questions?  Drop Jonathan or me a note in the comments section, below. 

Photo (c)



7 Critical Mistakes that Engineers & Architects Make that Sabotage their Projects

7 critical mistakes engineers & architects makeA lawsuit could cost your company thousands, or hundreds of thousands, of dollars.  You will spend more time with your lawyer than you’d like– time you’d otherwise be able to spend on your business.  Sound fun?  Of course not. 

What can you do to lessen your risks of a lawsuit? 

Take a few minutes right now to download my free 6 page white paper entitled 7 Critical Mistakes that Engineers & Architects make that Sabatoge their Projects & Invite Litigation.  If you know what these critical, yet common, mistakes are, you can take steps to minimize your risk of being sued. 

Check it out by going to the right hand side of the blog’s main page and submitting a request for your free copy today.

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