Risk is an inherent element of construction. Weather, changing project locations and local workforce challenges all add risk beyond what’s typically experienced in a more controlled manufacturing environment. These risks may be present before an estimator even looks at the drawings—in the language of contracts written by owners seeking to reduce their own liability. Some of these risks are very difficult, if not impossible, to control. Continue »
Typically, disruption in the workplace is counterintuitive to productivity. But in terms of creating innovative ways to manage people, processes and technology, the concept of “disruption” isn’t such a bad thing for the construction industry. Change is stirring whether contractors are ready for it or not, and firms that have adopted new ways of managing scheduling and workflows are seeing stellar results—earning the accolades of repeat projects for key clients, as well as happy project partners.
In today’s business environment, construction companies face the challenge of matching productive resources with market opportunities. Vital to resource management and the success of a business plan is a well-designed, flexible budget. When developed properly, a budget can be an effective guide in good and bad economic times. Highly intuitive, integrated software solutions can make financial planning and budgeting less of a task and ultimately more beneficial to a project’s profitability. Continue »
During the worst phase of the downturn in nonresidential construction activity, many contractors shifted their priorities from the private market to institutional jobs, including schools and higher education-related projects. While private construction volumes shrank rapidly during the aftermath of the financial crisis that began in September 2008, school construction volumes persisted for a while due to the relative stability of public sector capital budgets, which were boosted in part by the 2009 American Recovery and Reinvestment Act. A rich pipeline of projects also was in place prior to the onset of the recession. Continue »
This year is just getting started and the writing already may be on the wall for taxes in 2013. Careful planning and properly timed action could significantly impact taxes paid in 2012, 2013 and beyond. With the current political environment and recent legislative action (or inaction), experts predict personal income and capital gains tax rates are likely to rise in 2013. Higher taxes on ordinary dividends and the estate/gift tax also may be imposed in 2013—not to mention a higher Medicare payroll tax and surtax on high-income earners. Continue »
Construction companies all across North America have faced difficult times since 2008 as a result of the economic crisis. With new work difficult to acquire, razor-thin margins, and a declining backlog through the years, contractors have managed through the crisis by reducing their workforce, cutting overhead, selling equipment, and scaling back their operations in efforts to stay afloat and achieve profitable operating levels. Continue »
The business world today has embraced the benefits of social media, and many companies successfully use a variety of social channels for everything from customer relations and promotions to thought leadership and even sales. And social media itself has evolved from the early adopters who often used different channels to playfully share pictures of what they were having for lunch. Continue »
The claim of labor shortages in construction has a tendency to fall on deaf ears. After all, since peak industry employment was achieved in April 2006, the number of construction jobs has declined by 2.2 million, or 28.6 percent. Specialty trade contractors shouldered a disproportionate share of the loss, with the segment shedding nearly 1.5 million jobs (30 percent) since August 2006. As of March 2013, U.S. construction industry unemployment stood at 14.7 percent.
But labor shortages are on the way due to a combination of retirement demographics, the challenge of attracting younger workers and the anticipated rapid growth of certain key segments. A 2012 McGraw-Hill survey revealed 60 percent of respondents—particularly architectural and engineering firms—are concerned about the loss of knowledge associated with retiring baby boomers. Continue »
The U.S. Department of Justice adopted the 2010 Americans with Disabilities Act (ADA) Standards for Accessible Design on Sept. 15, 2010. During an initial transition period, covered public and private entities starting new construction or performing alterations had the option of following either the old 1991 Standards for Accessible Design or the new 2010 Standards. But as of March 15, 2012, all construction projects and modifications must comply with the 2010 standards. Continue »
In a recent decision, the National Labor Relations Board (NLRB) banned blanket confidentiality policies as they relate to employer investigations of workplace violations, such as sexual harassment and safety concerns. The NLRB determined that policies requiring confidentiality among employees during an investigation violate Section 7 of the National Labor Relations Act (NLRA) affecting “concerted activities.” Under Section 7, employers in both union and nonunion private sector environments are not permitted to interfere with or restrain employees from engaging in concerted activities which, by definition, are two or more employees acting together in furtherance of matters of mutual interest, such as compensation, benefits or workplace conditions. This decision could have a chilling effect on employers and employees across many industries, including construction. Continue »
Under normal circumstances, construction businesses could be justifiably optimistic about the future of the industry. After all, various leading indicators have been trending higher, including the Architecture Billings Index (ABI), which exceeded the key 50 level for five consecutive months before dipping two points in April (48.4) and another three points (45.8) in May. The ABI successfully predicted a dip in construction spending between the fourth quarter of 2011 and the second quarter of 2012. Although the period of decline may be ending, the May reading suggests vigorous recovery remains improbable. Continue »
All contractors can benefit from a comprehensive year-end planning process that will enable them to influence the current year-end results and start to implement the appropriate changes for the coming year. The process should incorporate a mix of tax planning strategies and operational changes that will allow the contractor to retain his hard-earned profits and ensure future success. This year’s planning process is especially critical due to the raising tax rates currently expected in 2013 and the deficit problems that are causing cuts in federal and state spending, a situation popularly known as the “fiscal cliff.“ Continue »