WTCABC News

WTCABC went to Federal court to defend the city’s copper theft ordinance.

When 175 feet of AT&T's twisted copper telephone line disappeared last month from Austin Street in North Memphis, the thieves traveled to Arkansas to try and sell their stolen scrap metal.

Their strategy apparently didn't work. A 51-year-old Memphis man, Willie B. Houston, landed in Shelby County Jail on Thursday charged with felony theft, vandalism and destruction or interference with utility lines.

Houston was held on $25,000 bond and a warrant has been issued for the arrest of another suspect. Both men were seen in a car that arrived at a Marion, Ark., scrap metal dealer carrying more than 190 pounds of copper telephone wire burned to remove its insulation.

A Memphis city ordinance opposed by the scrap metal industry in courts but finally embraced in late 2009 has helped make Memphis a less inviting place to sell stolen metals, said Paul Morris, an attorney who represented theft victims in the fight for the ordinance.

"What we've heard is that the problem still exists, but that's not to say that the ordinance didn't work," said Morris, now president of the Center City Commission. "It is not as bad as it would be if we didn't have the ordinance."

The price of American scrap metals -- driven by high demand in faster-growing economies overseas -- is a more important factor driving thefts, Morris said.

Local scrap metal dealers said copper currently earns a minimum of $3 a pound. In December 2008, during the global financial crisis, the price had fallen as low as $1.10 per pound, according to an industry group, the Institute of Scrap Recycling Industries, in Washington.

Meanwhile, states including Tennessee, Mississippi and Arkansas have stiffened industry regulations.

Mississippi and Arkansas direct scrap metal dealers statewide to supply a Dallas-based, privately run "nationwide investigations system" called LeadsOnline with detailed information about suppliers of metal that law enforcement agencies can tap.

The industry's institute offers a free alert system, Scrap Theft Alert, that allows major theft victims like telephone companies to post alerts sent to recyclers within 100 miles. The system also provides information for law enforcement agencies that register, said Gary Bush, national law enforcement liaison for the institute.

Still, AT&T reports that several times in recent months thieves have risked injury and electric shock in Memphis to climb poles and steal copper cable.

The theft reported June 9 in the 1300 block of Austin cut a line serving 200 customers and cost more than $10,000 to repair, according to court documents.

The telephone company asked anyone with information to call Crime Stoppers at (901) 528-CASH (2274) or AT&T Asset Protection toll-free at (800) 807-4205.

-- Kevin McKenzie: (901) 529-2348

WTCABC went to Federal court to defend the city’s copper theft ordinance.

When 175 feet of AT&T's twisted copper telephone line disappeared last month from Austin Street in North Memphis, the thieves traveled to Arkansas to try and sell their stolen scrap metal.

Their strategy apparently didn't work. A 51-year-old Memphis man, Willie B. Houston, landed in Shelby County Jail on Thursday charged with felony theft, vandalism and destruction or interference with utility lines.

Houston was held on $25,000 bond and a warrant has been issued for the arrest of another suspect. Both men were seen in a car that arrived at a Marion, Ark., scrap metal dealer carrying more than 190 pounds of copper telephone wire burned to remove its insulation.

A Memphis city ordinance opposed by the scrap metal industry in courts but finally embraced in late 2009 has helped make Memphis a less inviting place to sell stolen metals, said Paul Morris, an attorney who represented theft victims in the fight for the ordinance.

"What we've heard is that the problem still exists, but that's not to say that the ordinance didn't work," said Morris, now president of the Center City Commission. "It is not as bad as it would be if we didn't have the ordinance."

The price of American scrap metals -- driven by high demand in faster-growing economies overseas -- is a more important factor driving thefts, Morris said.

Local scrap metal dealers said copper currently earns a minimum of $3 a pound. In December 2008, during the global financial crisis, the price had fallen as low as $1.10 per pound, according to an industry group, the Institute of Scrap Recycling Industries, in Washington.

Meanwhile, states including Tennessee, Mississippi and Arkansas have stiffened industry regulations.

Mississippi and Arkansas direct scrap metal dealers statewide to supply a Dallas-based, privately run "nationwide investigations system" called LeadsOnline with detailed information about suppliers of metal that law enforcement agencies can tap.

The industry's institute offers a free alert system, Scrap Theft Alert, that allows major theft victims like telephone companies to post alerts sent to recyclers within 100 miles. The system also provides information for law enforcement agencies that register, said Gary Bush, national law enforcement liaison for the institute.

Still, AT&T reports that several times in recent months thieves have risked injury and electric shock in Memphis to climb poles and steal copper cable.

The theft reported June 9 in the 1300 block of Austin cut a line serving 200 customers and cost more than $10,000 to repair, according to court documents.

The telephone company asked anyone with information to call Crime Stoppers at (901) 528-CASH (2274) or AT&T Asset Protection toll-free at (800) 807-4205.

-- Kevin McKenzie: (901) 529-2348

‘Ask ABC’ Answers Construction Questions

‘Ask ABC’ Answers Construction Questions

By Sarah Baker

 

The largest commercial and industrial construction association in West Tennessee is leveraging its size, resources and expertise to provide reliable and timely construction-related information to its members and the community.

West Tennessee Chapter of Associated Builders and Contractors has recently launched the Ask ABC campaign, which positions the association as the authority on construction in the region.

Individuals with questions can log on to the chapter’s website, www.wtcabc.org, and click the Ask ABC logo on the homepage. The questioner then completes a short form and submits the question to WTCABC, who will respond with an answer and supporting material within 48 hours. Information seekers can also Ask ABC by calling or by submitting their questions via Facebook, Twitter or LinkedIn.

Mike Carpenter, WTCABC president and CEO, said the concept came about as a member benefit for the association’s 200 member companies during a rigid economic climate. The West Tennessee chapter is the first in the country, Carpenter said, at launching a “go-to source” campaign that helps involved parties navigate the industry on this scale.

“We regularly get calls from members asking various questions, but kind of usually as a last resort a lot of times – they’ve researched it on their own, they’ve looked for information and can’t seem to find what they’re looking for and then it occurs to them, ‘Oh, well, let me call ABC,’” Carpenter said. “What we wanted to do was to say to our membership, ‘Ask us first, let us save you the legwork and the time; we probably have the answer or can get quick access to the answer.’”

The Ask ABC campaign has two phases. The first phase will introduce the program to regional media outlets and to the 200 WTCABC member companies. The second phases will target governmental entities, schools, other associations and private business.

“We don’t have a database containing all the answers, but we have relationships with contractors, suppliers, economists, attorneys, government officials and experts in many fields related to construction,” Carpenter said. “There is no one more capable of providing the answers to construction questions.”

The association expects a wide range of commercial and industrial construction-related questions, including those related to economics, wages, material process, labor and employment law, green building, construction technology, weather, and government rules and regulations. The West Tennessee chapter won’t offer advice, but will strive to put out timely information and data in the hands of questioners so that they can make well informed decisions.

“Some of the questions are as simple as how many days does it rain in the month of January in Memphis,” Carpenter said. “I’ve had questions about where you can get a template to develop a quality program. It’s more than just economic data or statistics. It’s about business operations, human resources – those kinds of things that are different in construction than in other businesses.”

The arching idea is to provide resources to the West Tennessee chapter’s membership, which has taken a dip from 2006 levels, Carpenter said.

“We generally retain somewhere between 85 and 90 percent of our membership on an annual basis, whether the economy’s good or bad,” he said. “Then we recruit a certain percentage of new members, so we’re down slightly but still holding firm.”

Members are about 65 percent contractors and 35 percent suppliers or associates, all of which have some connection to the commercial construction industry. Its 200-plus member companies generate more than $1 billion in annual revenue and represent thousands of local jobs.

The national federation – comprised of about 25,000 member companies – provides up-to-date information from employment to material costs. That’s something the West Tennessee chapter would like to eventually provide, Carpenter said, but not in the immediate future.

“In the past, we have partnered with the Sparks Bureau of Economics at the University of Memphis and they have been a great source for us for local data,” he said. “We have always wanted to have somebody local who could talk about the local construction market.”

 

Fewer Opportunities

Fewer Opportunities

Commercial construction continues to struggle

By Sarah Baker

During a national online news conference last month, Associated Builders & Contractors chief economist Anirban Basu said although employment in the construction industry has expanded over the past four months, the nation’s construction industry recovery may be two years away.

That’s understandably disappointing for executives like Kevin Moyes, president of The Flintco Cos. Inc.’s Memphis division.

“It’s a difficult time and we actually really thought that this year things would be getting better, and that was two years ago,” he said. “The construction industry touches a lot of other businesses, so it’s a ripple effect that hits a lot of people.”

While the number of projects the Tulsa, Okla.-based firm is working on are probably have about the same, the average dollar size for a project is drastically reduced. The smaller, $3 million and $4 million projects Flintco would have overlooked at in 2007 are now being heavily pursued.

With fewer opportunities for the mid- to large-scale projects, competition has skyrocketed, said Rusty Linkous, director of business development for Linkous Construction LLC.

“Now you have much more competition in a lot of these small- to mid-commercial projects because you have the general contractors who were always doing the small projects, plus the contractors that specialize in the mid-size projects and the contractors who specialize in the large projects all competing for the same ones,” Linkous said.

And while project bids are getting lower, construction material prices are continuing to rise. Construction materials prices rose another 0.9 percent in May after rising 1.4 percent in April, according to the latest producer price index report released by the U.S. Labor Department. Prices are 7.5 percent higher than a year ago. And there’s a fine line between bidding on projects against multiple general contractors at extremely competitive rates, Linkous said.

“When you look at the fact that every quarter, construction material prices are rising, but we’re quoting prices that we quoted seven or eight years ago, you can imagine your profit margin on those jobs are decreasing significantly,” he said. “In a normal market, logically, if you’re building an office building, you pay more this year as compared to last year and we’re not seeing that necessarily.”

One way to stand out from peer firms is through innovative technology and delivery methods such as Building Information Modeling, or BIM. The program allows firms to virtually put together a building on a computer before ever setting foot on the site.

Then there’s integrated project delivery, where an entire team is brought together – owner, designers, contractors, subcontractors and vendors – before a project starts. This allows all parties to share in the risk and the reward, Linkous said.

But not all sectors of the construction industry are in holding patterns. In the coming 10 to 12 months, Basu predicted growth in health care – with the construction of hospitals, health centers and clinics – and the natural resources sector, which is in reaction to the growing cost of energy.

Chris Woods, president of Chris Woods Construction LLC, agrees with that forecast, noting that his firm has seen an uptick in inquires for just about every area but retail centers, which are closely tied to the homebuilding industry.

As a general rule, commercial and industrial construction lags homebuilding by about two years, Woods said, and the market is still waiting for the residential sector to bottom out.

“Every year that we’ve had a good year in the commercial and industrial industry, housing has been a benchmark for our good year,” Woods said. “We don’t know if our recovery in the commercial and industrial will continue with the homebuilding so flat.”

 

EPA EXPANDS PROGRAM REQUIRING CONTRACTORS TO BE TRAINED IN LEAD-SAFE PRACTICES (05/12/2010)

EPA announced three actions:

  • A final rule to apply lead-safe work practices (PDF) (18 pp, 212K) to all pre-1978 homes, effectively closing an exemption that was created in 2008. The rule will become effective 60 days after publication in the Federal Register.

  • A notice of proposed rulemaking (PDF) (37 pp, 250K) to require dust-wipe testing after most renovations and provide the results of the testing to the owners and occupants of the building. For some of these renovations, the proposal would require that lead dust levels after the renovation be below the regulatory hazard standards. EPA will take comment on the proposal for 60 days. The agency expects to finalize the rule by July 2011.

  • An advance notice of proposed rulemaking (PDF) (15 pp, 115K) to announce EPA's intention to apply lead-safe work practices to renovations on public and commercial buildings. The advance notice also announces EPA's investigation into lead-based paint hazards that may be created by renovations on the interior of these public and commercial buildings. If EPA determines that lead-based paint hazards are created by interior renovations, EPA will propose regulations to address the hazards.

2010 Begins with More Nonresidential Construction Job Losses 2/5/10

"Since the recession began, the construction industry has lost nearly a quarter of all jobs, and, if anything, today's report indicates more jobs losses will follow." —ABC Chief Economist Anirban Basu

The nonresidential building construction sector lost 12,100 jobs in January, bringing the total number of jobs lost since January 2009 to 104,300, according to the Feb. 5 report produced by the U.S. Labor Department. The total number of nonresidential construction jobs stands at 671,200, 13.4 percent below January 2009 levels. (See what this means below)

Nonresidential specialty trade construction posted its largest monthly job loss since March 2009, shedding 48,100 jobs in January. Year-over-year, nonresidential specialty trade construction has lost 383,400 jobs, or 16.1 percent of its workforce. Heavy and civil engineering construction employment was unchanged for the month but is still down 109,100 jobs for the year.

Residential building construction shed 8,800 jobs in January and is down 16.9 percent, or 119,700 jobs, since the same time last year. The construction industry as a whole lost 75,000 jobs for the month and 926,000 year over year.

Across all industries the number of jobs fell by 20,000 in January, compared to a revised report showing a loss of 150,000 jobs in December and a gain of 64,000 jobs in November. Year-over-year, employment shrank 3 percent – a loss of more than 4 million jobs. The unemployment rate is now 9.7 percent, marking the first time it has been below 10 percent since September 2009.

What This Means

“Rarely is a data release as difficult to interpret as today's jobs report. Data emerging from the DOL’s establishment and household surveys, which make up the information in the report, provide plenty of ammunition for both economic optimists and pessimists,” said ABC Chief Economist Anirban Basu. “Optimists will undoubtedly focus on the unemployment rate, which is below 10 percent, and the evidence of job growth emerging from the household survey, which generally is believed to be an indicator of small business job growth in the short term, and therefore will find evidence that small businesses are expanding again.

“Pessimists are more likely to focus on the establishment survey, which shows that job losses not only continue but have been considerably worse than previously estimated,” Basu continued. “Based on revised data, it is now estimated that the nation has lost 8.4 million jobs since the recession began as opposed to the prior estimate of 7.2 million jobs.

“ABC members are likely to be more affected by the results of the establishment survey than the household survey,” said Basu. “After all, construction continues to hemorrhage jobs, most profoundly among specialty trade contractors. Since the recession began, the construction industry has lost nearly a quarter of all jobs, and, if anything, today's report indicates more jobs losses will follow.”

DOL BUDGET FOCUSES ON EMPLOYER ENFORCEMENT AND INDEPENDENT CONTRACTOR CLASSIFICATION (02/03/2010)

The U.S. Department of Labor (DOL) Feb. 1 requested a fiscal year 2011 discretionary budget of $13.98 billion that includes an increase in oversight of wage and hour rules and occupational safety and health laws in addition to funding an initiative to crack down on misclassification of independent contractors.   

Under the FY 2011 budget, the Occupational Safety and Health Administration (OSHA) would get $573 million, an increase of $14 million from FY 2010.  OSHA plans to significantly decrease funding for its Voluntary Protection Program (VPP) and shift 35 workers from cooperative safety programs to enforcement.   

“We recognize that VPP companies do an excellent job; OSHA resources need to be focused on employers who don't understand the importance of protecting their workers, particularly small employers,” said Dr. David Michaels, OSHA assistant secretary.  

As part of an initiative between DOL and the U.S. Treasury, $25 million of DOL’s budget will be dedicated to strengthening and coordinating federal and state efforts to identify and deter misclassification of independent contractors.  A portion of OSHA’s budget also will be used to modify training curriculum and investigation guidelines to allow inspectors to indentify potential misclassifications.  The Wage and Hour Division will hire 90 additional inspectors to focus on misclassifications during targeted investigations.  

“The goal is to improve capacity to identify misclassification through increased information sharing and targeted audits in high-risk industry sectors,” said Jane Oates, assistant secretary at DOL’s Employment and Training Administration. “These efforts will prevent misclassification, increase statutory enforcement where appropriate, and enable collection of payroll taxes previously lost due to misclassification, such as in the Unemployment Insurance program.”  

For more information, visit www.dol.gov/dol/budget

Fourth Quarter GDP: 2009 Ends as Mixed Bag

"There are a number of encouraging elements to the report, including the fact that much of the fourth quarter's expansion had little to do with federal spending." —ABC Chief Economist Anirban Basu

Last year ended as a mixed bag as nonresidential fixed investment increased 2.9 percent from the third quarter to the fourth quarter of 2009, according to the January 29 gross domestic product (GDP) report by the U.S. Commerce Department. The increase was led largely by a 13.3 percent gain in equipment and software spending. However, investment in nonresidential structures declined 15.4 percent following an 18.4 percent loss in the third quarter. (See Analysis below)

Residential fixed investment increased 5.7 percent in the fourth quarter following an 18.9 percent gain in the third quarter. Exports continued to grow, surging 18.1 percent, arguably the most encouraging aspect of today's GDP report. Imports rose 10.5 percent. Personal consumption expenditures also grew 2.0 percent primarily due to a 4.3 percent increase in nondurable goods consumption. Durable goods consumption declined 0.9 percent for the quarter following a 20.4 percent increase in the third quarter. Private inventories grew by 3.4 percent in the fourth quarter while final sales (GDP less private inventories) increased 2.2 percent. Federal government spending increased just 0.1 percent in the fourth quarter following an 8 percent gain in the third. Defense spending decreased 3.5 percent after an 8.4 percent gain the previous quarter.

Gross domestic purchases also gained 2.1 percent for the quarter and increased 1.2 percent, excluding food and energy purchases. Overall, real gross domestic product increased 5.7 percent for the quarter, the fastest growth pace since 2003.

Analysis

“While many observers will take comfort in today's GDP report, most nonresidential contractors will not,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “However, there are a number of encouraging elements to the report, including the fact that much of the fourth quarter's expansion had little to do with federal spending. Instead, output gains were largely attributable to America's technology sector, growing consumer activity and an improving global economy, which contributed to the surge in exports.

“The most surprising aspect of the report is the absence of federal spending as a primary economic driver, though non-defense spending was up for the quarter,” said Basu. “It is important for ABC members to note that GDP is subject to revision and one of the aspects that may be revised is the estimate of federal spending contribution.

“For the nonresidential construction industry, there are certainly elements of the report that are discouraging. Investment in nonresidential structures continues to decline even in the wake of the stimulus package passed last February,” said Basu. “Further, many economists are concerned that the fourth quarter surge in GDP will be largely a one-quarter phenomenon, and that the economic recovery still remains fragile, especially given anticipated increases in various tax rates and interest rates this year and next.”

ABC URGES OBAMA TO KICK START THE ECONOMY AND SUPPORT FREE ENTERPRISE (01/27/2010)

ABC Jan. 26 urged President Obama to include free enterprise solutions to stimulate the economy and help create jobs in his Jan. 27 State of the Union address.  

“If history has taught us anything, job creation is best fostered in a pro-business environment where free enterprise and open competition are unconstrained. Free enterprise solutions are the key to kick-starting our lagging economy,” said ABC 2010 National Chairman James (Jim) W. Elmer, founder and president of James W. Elmer Construction Co., Spokane, Wash. “Creating jobs and invigorating our economy has emerged as an urgent need for Americans in general, and for ABC members in particular.  

“With construction in this country nearly at a standstill and the industry unemployment rate at a staggering 22.7 percent – more than twice the national average – we call on President Obama to focus on a job proposal that will help put Americans back to work and the construction industry back on its feet,” said Elmer.  

“In order to revive the economy and create jobs for the men and women in the construction industry, regardless of labor affiliation, we believe that it is imperative to focus on implementing free enterprise solutions to increase access to capital, provide meaningful tax relief for small businesses, speed up delivery of stimulus dollars to ‘shovel-ready’ projects, support a comprehensive energy plan, and increase access to training programs for all,” said Elmer.  

“This is not a time to play favorites with special interest groups, such as big labor,” said Elmer. “Now is the time for the Obama administration to embrace policies that benefit all Americans, not a chosen few.”

James Overstreet: Construction lagging behind economy


By James Overstreet (Contact), Memphis Commercial Appeal
Sunday, August 16, 2009


 While many economists, pundits and politicians have declared an end to the Great Recession, the construction industry isn't feeling it yet.  But that's not unusual, because commercial construction typically lags economic recovery by several months -- if not years, says Associated Builders and Contractors chief economist Anirban Basu.  The organization recently unveiled a new economic report called the Construction Backlog Indicator, which will be released every other month.


 


"Contractors always talk about their backlog as a means to answer the question, 'How's business? “says Mike Carpenter, president and CEO of the West Tennessee chapter of ABC. "The CBI is a natural measure to determine how robust (or not) this industry is."What the CBI shows is very consistent with what we are experiencing locally -- a declining backlog," Carpenter says. "This also meshes with what local architects are telling us about their backlog or lack of backlog."  ABC has been projecting recovery for its industry in mid- or late 2010, and the new CBI report supports that prediction.


"This is in contrast to residential construction and the real estate market, which appear to be showing signs of a slight recovery," Carpenter says. "Commercial construction is always on the back end of a downturn and a recovery."  Basu points out that the full benefits of the economic stimulus package haven't been felt yet in the construction trades.  "We had a very good sense that shovel ready didn't mean immediately ready," Basu says, referring to the stimulus bills' advocates who claimed the money would be immediately injected into the economy. "Projects needed to be planned and bid out. It takes time before they are converted into contractual obligations."  However, many construction companies will not get a piece of the stimulus-related projects, and their backlogs continue to decline.  "Many segments of commercial real estate remain in very bad shape," Basu says. "There is a general lack of financing and job losses lead to decreasing office, retail and hotel occupancy rates. None of that helps construction. So although many economists are calling the recession over, the commercial real estate industry has many more months -- probably years -- before it recovers."


 


As the Apple Store at 7615 W. Farmington at Saddle Creek in Germantown closes for renovations until Sept. 3, local Macintosh dealers are seeing a welcomed increase in business.  "Our business has been up about 25 percent already," said Jim Walton, co-founder of 31-year-old Computerlab of Memphis Inc.  Computerlab, at 685 N. Mendenhall in East Memphis, is one of several companies filling the void. Another is MacAdvantage at 1000 Reddoch Cove. MacAdvantage has been a seller of new and refurbished Apple computers, accessories and equipment for more than 15 years.  It has been awarded the Apple Authorized Service Commitment to Excellence Recognition award for all four quarters of 2008 and the first two quarters of 2009 -- the only company within Tennessee, Mississippi, Georgia and Kentucky to accomplish that feat.  "We have parts here that you can't even find on the Internet," says Mignonne Wright.  Securas Consulating Group is also accepting Apple laptops and desktops at its facility at 1125 Schilling Blvd., Suite 101, in Collierville, beginning Monday. Securas Consulating is also extending its hours from 9 a.m. to 7 p.m. Mondays through Saturdays and noon to 6 p.m. on Sundays.