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Construction Industry Trends

Industry Economist: Recovery Has Started, But Tough Times Still Ahead

By: Alisa Zevin, Engineering News-Record

Economic recovery is under way, but there’s still a long way to go, according to Anirban Basu, chief economist at Associated Builders and Contractors. He presented his analysis during an Aug. 12 webinar for the association.

Basu pointed to May and June jobs reports—with gains of 2.7 million and 4.8 million jobs respectively—as the start of a recovery period, but he remained cautious during the webinar titled “Six Months In, What is the Trajectory of Construction’s Recovery from COVID-19?” July’s jobs dropped to 1.8 million added, largely because of a resurgence of the virus in the South, where re-opening plans are being put on hold or even reversed.  

“I’m not saying another recession is coming,” said Basu. “But if this pandemic was still not lingering, [the economy] would be much, much better.”

In June, the Congressional Budget Office forecast the U.S. economy will shrink 6% this year, followed by 4% growth in 2021. Global organizations have similar projections: World Bank projects a 6% drop in GDP in 2020, and a rebound of 4.5% in 2021, while the International Monetary Fund (IMF) predicts an 8% decline in 2020 followed by a 4.5% increase next year.

The Organisation for Economic Co-operation and Development predicts a 7.3% drop in 2020, with a rebound of 4.1% in 2021, barring a second wave. Should the next wave occur, its forecast changes to an 8.5% decline in 2020, with only a 1.9% rebound in 2021.

The overall economy, including construction, is expected to improve in 2021, but “there are no guarantees,” said Basu. He notes that non-residential construction may be in for a rough 2021, as trends in that market often trail the overall economic trends by 12-18 months. This year “was awful for the broader economy [and] 2021 will be awful for non-residential construction, but by 2022 we’re starting to see some recovery.”

Contractors are reporting fewer jobs being bid, and fiercer competition for those that are out there, says Basu.

ABC’s construction backlog indicator fell to 7.8 months in July, a full month lower than the 8.8 months reported in July of 2019. Respondents to the association’s confidence index say they expect a decline in sales and profit margins over the next six months. While the index indicates that staff numbers will stay flat, this follows a loss of more than 300,000 construction jobs throughout the past few months.

“Recovery has begun, but these times remain treacherous,” concluded Basu. “I don’t think we’ve earned a v-shaped recovery yet.”

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Preparing for the 2021 Hiring Season and Beyond: MITA Workforce Survey Report

By: Ken Bertolini, Director of Workforce Development, MITA

March through June provided MITA members with the opportunity to complete the MITA 2020 Workforce Survey. Ninety companies participated ranging from road and bridge builders, excavating and engineering companies. 

Data was collected, analyzed and placed in a written report available to all MITA members. What are the expected hiring needs for companies for the upcoming 2021 hiring season and what is anticipated over the next five years? This question including hiring and training practices of MITA member companies can be examined through a comprehensive report that provides these details as well as others and an examination of the details. 

Thank you to the companies that participated in the survey; your input and the number of individuals that participated is greatly appreciated. Your involvement with this project is another example of the strength of your MITA membership and how we are here to help benefit your company and the way you consider hiring, training and retaining your workforce. 

Follow the link provided to download a copy of the MITA 2020 Workforce Survey Report.


View Survey

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Contractor’s Surety Toolkit: Digital Marketing Packet

By: Merchants Bonding Company

The Contractor’s Surety Toolkit provides valuable surety news and information for construction business owners and leaders. … Read More

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3 Key Takeaways from BuildingConnected’s 2020 US Construction Risk Outlook

By: Dustin DeVan, Construction Industry Strategist and Evangelist at Autodesk Construction Solutions and Co-Founder of BuildingConnected

To kick off the new year, TradeTapp recently released its initial report: The 2020 US Construction Risk Outlook. The report uncovers the biggest risks impacting general contractors and owners in the year ahead, with the goal of helping the entire industry make smarter decisions about risk. … Read More

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Are You Ready For The Hard Market

By: Kirk Rathjen, Regional Vice President, Contract Underwriting

With construction economy experts’ prediction of a hard market coming soon, common sense tells us while we are hoping for the best, we should prepare for the worst. Contractors should ask themselves, do I have a viable plan to become smaller? … Read More

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How Construction Firms Can Manage Cash Flow In A Crisis

By: Reed D. Sellers, CPA, CCIFP, Senior Manager, WIPFLi CPAs and Consultants

In times of turbulence, like what we’re seeing during the COVID-19 pandemic, what were once best practices often become absolute necessities for survival.

If you work in construction and find yourself concerned about cash flows, take a look at these tips to help provide access to capital as well as stretch what you already have. … Read More

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Long-Term Planning

Lessons from the Field: Why Business Continuity Planning Is Essential

By: Wayne Messick, AFSB, Old Republic Surety

Like it or not, ownership and management changes are a certainty in construction. According to FMI, every construction company that isn’t publicly traded will go through an ownership transition — usually every 25 to 30 years. With baby-boomer retirements on the rise, those changes are occurring with greater frequency. … Read More

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Expect the Unexpected: The Importance of a Solid Continuity Plan

By: Scot Albrinck, AFSB, Old Republic Surety

Growing up in a family that owned an electrical contracting business, I was always surrounded by a strong work ethic and dedication to the business. While my role was focused on pulling wire, bolting on stadium light pegs in the middle of winter, and sweeping floors, the heartbeat of the company was my father. When something happens to the heartbeat — in this case, a serious illness that required significant time away from the company — the rest of the structure can start to crumble. A 20-year-old company can go out of business in a flash. Not having a proper — and clearly documented — continuity plan in place for business succession in the event of an unforeseen disability or death could have compounding and detrimental effects on a company’s ability to weather the storm. … Read More

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CARES Act & PPP Resources

PPP Updates – Restrictions, Eligibility, Loan Amount Calculations & Penalty-Free Repayment Option

By: Jim Ashley & Anne Coughlan, BKD CPA’s & Advisors The recently enacted Paycheck Protection Program and Health Care Enactment Act allocated $310 billion in additional funding for the U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and added enhanced oversight and new restrictions. The legislation provides the SBA with an additional $2.1 billion for administration and oversight of COVID-19 response programs. This article provides details on several important updates. … Read More

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Michigan Governor Whitmer Issues Executive Order

By: MITA & Bodman, PLC

Congress Passes More Money To Support Aide Relief Programs

Congress met again this week under social distancing rules to pass more relief money for employers and employees. As MITA has reported, Congress has already passed several programs that extend unemployment benefits, provide paycheck relief for employers, increase supplies for medical facilities, as well as other measures in an attempt to help Americans get through the COVID-19 pandemic.
Read More
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Comparison of EIDL and Paycheck Protection Programs

By: Jack Rybicki, CliftonLarsonAllen

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act), in response to the economic effects of the COVID-19 virus. The CARES Act contains the following key components with respect to the SBA Economic Injury Disaster Loan program (EIDL):

    Read More
Featured Post

Tax Savings Opportunities From The CARES Act

By: John Werlhof, CliftonLarsonAllen

Key Insights

  • The Coronavirus Aid, Relief, and Economic Security (CARES) Act is the largest stimulus package in our nation’s history.
  • Among other things, the CARES Act provides tax relief for businesses and individuals.
  • You may be able to take advantage of a number of tax savings opportunities.

Read More

Featured Post

Contractors Can Seek Relief Through The CARES Act

By: Mike Sanders, AFSB, Old Republic Security

The vast majority of businesses in the United states are classified as Small Businesses under standards of the Small Business Administration (SBA).  Deteriorating economic conditions that are a result of the Covid-19 pandemic are causing severe financial hardship to contractors and small businesses, and many are wondering if they will survive.  In the midst of these business struggles, there are significant financial benefits that have become available.  Part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just signed into law on Friday, March 27 includes $349 billion of funding for the Paycheck Protection Program (PPP).  Under the PPP, many small businesses could qualify for an SBA guaranteed loan to help them maintain payroll during these tough economic times.

Read More

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U.S. Chamber of Commerce: Coronavirus Emergency Loans

Provided By: U.S. Chaamber of Commerce

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses who maintain their payroll during this emergency. Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward. The administration soon will release more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals prepare to file for a loan.

Read More

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SMALL BUSINESS PAYCHECK PROTECTION PROGRAM

Provided By: The Small Business Association

The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

Below you will find information on the loan, how to apply, and the application form. 

Read More

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Small Business Loan Resources Included in CARES Act

Article Written By: The Surety & Fidelity Association of America

Last week Congress approved a $2 Trillion lesgislative package (CARES Act) that included povisions to allocate $350 billion for federally-backed loans to support US companies with less than 500 employees. The Paycheck Provention Program included as part of the legislative stimulus signed into law last week, is separate from the SBA program’s Economic Injury Disaster Loans (EIDL), which has been available for companies experiencing financial hardship as a result of COVID-19 since early March. 

View full step-by-step guidance in the document below. 

Read More

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Financial Management Resources

Tax Liability on Construction Materials

By: MITA

This bulletin will serve as MITA’s annual reminder to our contractor members of the issue of tax liability on construction materials that are being incorporated in projects of tax-exempt owners. Contractors performing work for public agencies, nonprofits, churches and schools are often faced with this precarious issue.Read More

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All COVID-19 Resources

Paycheck Protection Program – Best Practices for Documentation

By: BKD CPAs & Advisors

The U.S. Small Business Association created the Paycheck Protection Program (PPP) to assist those affected by COVID-19. Many eligible businesses and organizations have received their PPP funds and are gearing up for the next phase. … Read More

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Return To Work Sample Letter Now Available

By: MITA

Whether your company has been considered “essential” from the beginning of the COVID-19 crisis, or is now looking to get started on May 7th when ALL construction is given the go ahead to resume safely as the Stay Home, Stay Safe order continues, getting employees to come back to work seems to be a major challenge.

Read More

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ConsensusDocs COVID-19 Contract and Construction Law Resource Center

By: ConsensusDocs

ConsensusDocs has compiled a library of documents and resources pertaining to contract and construction law to help you navigate through COVID-19. Follow the link below to view the full library.
Read More

Featured Post

PPP Updates – Restrictions, Eligibility, Loan Amount Calculations & Penalty-Free Repayment Option

By: Jim Ashley & Anne Coughlan, BKD CPA’s & Advisors The recently enacted Paycheck Protection Program and Health Care Enactment Act allocated $310 billion in additional funding for the U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and added enhanced oversight and new restrictions. The legislation provides the SBA with an additional $2.1 billion for administration and oversight of COVID-19 response programs. This article provides details on several important updates. … Read More

Featured Post

Michigan Governor Whitmer Issues Executive Order

By: MITA & Bodman, PLC

Congress Passes More Money To Support Aide Relief Programs

Congress met again this week under social distancing rules to pass more relief money for employers and employees. As MITA has reported, Congress has already passed several programs that extend unemployment benefits, provide paycheck relief for employers, increase supplies for medical facilities, as well as other measures in an attempt to help Americans get through the COVID-19 pandemic.
Read More
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Bodman COVID-19 Webinar

By: Bodman Law PLC and MITA

On April 22nd, MITA partnered with Bodman PLC to present a live COVID-19 webinar.
Many employers are facing severe staffing shortages now. Enhanced and expanded unemployment benefits and protections against discipline for failing to return to work have left employers searching for methods to maintain staffing levels. Bodman workplace law attorneys discussed solutions to these challenges.
Bodman has graciously provided the recorded webinar and corresponding materials for members use.
Read More

Featured Post

Comparison of EIDL and Paycheck Protection Programs

By: Jack Rybicki, CliftonLarsonAllen

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act), in response to the economic effects of the COVID-19 virus. The CARES Act contains the following key components with respect to the SBA Economic Injury Disaster Loan program (EIDL):

    Read More
Featured Post

Tax Savings Opportunities From The CARES Act

By: John Werlhof, CliftonLarsonAllen

Key Insights

  • The Coronavirus Aid, Relief, and Economic Security (CARES) Act is the largest stimulus package in our nation’s history.
  • Among other things, the CARES Act provides tax relief for businesses and individuals.
  • You may be able to take advantage of a number of tax savings opportunities.

Read More

Featured Post

Contractors Can Seek Relief Through The CARES Act

By: Mike Sanders, AFSB, Old Republic Security

The vast majority of businesses in the United states are classified as Small Businesses under standards of the Small Business Administration (SBA).  Deteriorating economic conditions that are a result of the Covid-19 pandemic are causing severe financial hardship to contractors and small businesses, and many are wondering if they will survive.  In the midst of these business struggles, there are significant financial benefits that have become available.  Part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just signed into law on Friday, March 27 includes $349 billion of funding for the Paycheck Protection Program (PPP).  Under the PPP, many small businesses could qualify for an SBA guaranteed loan to help them maintain payroll during these tough economic times.

Read More

Featured Post

U.S. Chamber of Commerce: Coronavirus Emergency Loans

Provided By: U.S. Chaamber of Commerce

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses who maintain their payroll during this emergency. Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward. The administration soon will release more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals prepare to file for a loan.

Read More

Featured Post

SMALL BUSINESS PAYCHECK PROTECTION PROGRAM

Provided By: The Small Business Association

The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

Below you will find information on the loan, how to apply, and the application form. 

Read More

Featured Post

Small Business Loan Resources Included in CARES Act

Article Written By: The Surety & Fidelity Association of America

Last week Congress approved a $2 Trillion lesgislative package (CARES Act) that included povisions to allocate $350 billion for federally-backed loans to support US companies with less than 500 employees. The Paycheck Provention Program included as part of the legislative stimulus signed into law last week, is separate from the SBA program’s Economic Injury Disaster Loans (EIDL), which has been available for companies experiencing financial hardship as a result of COVID-19 since early March. 

View full step-by-step guidance in the document below. 

Read More

Featured Post

Westfield: Marketplace Contract Changes

By: Westfield Insurance

MEMO: CONCERNING MARKETPLACE CONTRACT CHANGES IN RESPONSE TO COVID-19, AS WELL AS PROJECT-LEVEL CONSIDERATIONS FOR THE CONTRACTOR

You may recall the recently published Memo Concerning the Interplay of the Coronavirus (COVID-19) and Force Majeure Provisions in Contractor and Subcontract Agreements. The purpose of that memo was to advise our underwriters, agents, and contractors about the potential impact of the COVID-19 pandemic on contractual relations, as well highlight some general guidelines to consider and things to watch for. … Read More

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Westfield: Force of Majeure

By: Westfield Insurance

Force majeure is French, translating as a “superior force.” Black’s Law Dictionary defines force majeure as an “event or effect that can be neither anticipated nor controlled.”

In the construction industry, many contracts and subcontracts contain provisions delaying or even excusing performance in the event of a force majeure event. Contracts may not always use the term force majeure, but may instead define acts generally-associated with the concept. … Read More

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Will COVID-19 Be Considered a Force Majeure?

By: Darrel Lamb, CPCU, AFSB, Old Republic Surety

On March 17, 2020 the City of Boston became the first city, but not likely the last city to close down all construction projects currently in progress due to the COVID-19 crisis. This raises the question of what impact that will have on meeting the schedules and terms of the various construction contracts. Will liquidated damages be assessed if a contract does not meet its contractual schedule? … Read More

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ENR Risk Review

By: Engineering News Record 

Construction professionals are working hard to stay as informed as possible about the impacts that the COVID-19 pandemic is having on companies, projects and partners. To help, ENR editors will make critical stories from our daily news coverage available for free to all visitors to ENR.com so they can be shared throughout the industry. To see the most recent coverage, click here.

Read More

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MITA: COVID-19 Preparedness and Response Plan for Businesses and Offices

By: Michigan Infrastructure & Transportation Association

Governor Gretchen Whitmer issued Executive Order 2020-42, extending her “Stay Home, Stay Safe” Order through April 30, 2020. One of the new requirements outlined in the Order asks ALL Michigan businesses that continue in-person work to develop a COVID-19 Preparedness and Response Plan. The mandate applies to all Michigan “businesses, operations, and government agencies that continue in-person work.” … Read More

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Addressing The Pandemic: Surety Concerns When Reviewing Contract Clauses

By: Josh Penwell, Senior VP, Contract Underwriting at Merchants Bonding Company

Experts anticipate the COVID-19 pandemic will have a major impact on the construction industry. It is important for contractors to be diligent in understanding the impact and what they can do now to protect themselves and their balance sheets. … Read More

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How Coronavirus Is Affecting The Construction Industry: An Evolving Tracker of Construction Shutdowns Across The US

Resources Provided By: Foley and Lardner LLP

The US construction market has been upended by the COVID-19 pandemic. Rapidly evolving state and local orders governing business closures, limitations on social gatherings, and restrictions on commerce are being issued and clarified daily. Foley’s nationally ranked Construction Practice has been continually tracking those states in which construction has been impacted by such orders. … Read More

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Traveler’s Bond: Who Will Bear the Risk and Cost for Coronavirus Construction Delays? A Contractual Analysis.

BY PETER STRNISTE ON MARCH 2, 2020 POSTED IN CONSTRUCTION CONTRACTS AND CLAIMS, CONSTRUCTION INDUSTRY, AND DELAYS AND INEFFICIENCIES

As the Coronavirus spreads across the globe, its impact continues to disrupt many industries, including construction.  Over the last twenty years, the construction industry in the United States has substantially increased its reliance on China as a supplier for all types of construction materials including electrical and lighting equipment, elevators and component parts, plumbing fittings and fixtures and HVAC equipment. … Read More

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Liberty Mutual Surety: COVID-19 Impact on Contract Surety in the US

By: Fran McGrath, Chief Credit Officer, Liberty Mutual Surety

The U.S. construction industry felt the first wave of the impact of COVID-19 when China’s Hubei province went into lockdown and manufacturing facilities that produce construction materials for U.S. consumption were forced to halt production. In more recent weeks, significant labor force and supply chains challenges in countries around the globe, combined with government-imposed shutdowns, are stopping some U.S. construction projects in their tracks. … Read More

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CNA Surety: Construction Concerns Arising From COVID-19

Provided By: CNA Surety

As we continue to address the many challenges facing the construction and surety industries arising from COVID-19, CNA surety continues to provide us with relevant and thoughtful information. CNA Surety understands that all contracts vary and there is no one-size-fits-all answer or approach. This bulletin will help identify certain clauses and issues that you may want to closely consider. … Read More

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