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2019 State of the Industry

Amidst a robust construction economy, there are a few cracks in the foundation, but overall the industry is optimistic

Every year, we ask industry leaders to offer their expertise on where the industry is headed. From economists to manufacturers, sustainable design experts, contractors, labor representatives and leading designers, we offer a full view of the industry. A few themes pop out in these reports.

  1. The construction economy is strong and still growing. In fact, it may continue growing for the next couple of years in spite of the imposition of steel tariffs and other economic hits.
  2. Due to changing consumer demands, some segments of the industry, such as the retail market, will decline while others, such as transportation, will be winners.
  3. One of the biggest constraints on the growth of the industry is the availability of skilled labor, and solving that problem will require all our expertise and collaboration.
  4. In a year that was devastated by wildfires, hurricanes and flooding, the message of sustainable construction needs to be rejuvenated to attract a wider audience, spread understanding, and move people from entrenched, opposing positions.
  5. Codes and standards are getting more stringent, and the acceptance of metal building products can be important solutions for building owners and homeowners.

This year we have marked each contribution with a list of keywords to make it easier for readers to investigate topics about which they are particularly interested. We highly recommend digging deep into all the segments. There are fabulous insights and gems within these pieces that may change how you approach 2019.


Economics ♦ Labor Shortage ♦ Market Trends ♦ Growth ♦ Tariffs

Put-In-Place Construction Forecasts

By Alex Carrick, Chief Economist, ConstructConnect

The following sets out, in text and graphs, ConstructConnect’s projections of U.S. put-in-place (PIP) construction activity. PIP statistics are published by the Census Bureau. They are analogous to work-in-process or progress payments as projects proceed.

(PIP statistics lag up-front ‘starts’ statistics, which are lump sum figures estimated when ground is broken. Also, the ‘starts’ set the table for later PIP numbers.)

Prospects for the U.S. economy remain quite solid based on outstanding jobs and income growth that will continue to fuel consumer spending. There are, however, several factors that suggest a gradual easing in the forward momentum:

  • The Federal Reserve would like to restore its policy-setting interest rate to ‘neutrality,’ implying a figure closer to 3.00 percent than its current level barely over 2.00 percent.
  • Tariffs on lumber, steel and aluminum from a limited number of countries and on a wide range of products from China are adding significantly to costs.
  • Shortages of labor are driving wages upward, which is positive for family finances, but sparks worry about inflation.
  • The federal government’s deficit is headed back up to $1 trillion.
  • Economic performance in much of the rest of the world has turned sluggish.

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Green Building ♦ Design Trends ♦ Environmental Impact ♦ Codes and Standards ♦ Industry Collaboration

Reinventing the Green Movement

By Jason F. McLennan, CEO, McLennan Design, and Founder, Living Building Challenge

“When we try to pick out anything by itself, we find it hitched to everything else in the universe.”

John Muir

At the beginning of each year I like to take stock on the progress of the green building movement and identify where I can make the most difference in the near future. The invitation from Metal Construction News and Metal Architecture to write a summary for its State of the Industry Report was therefore timely. 2018 has been a challenging year in many regards as federal support for green building and renewable energy was victim to political posturing, and continued denial of unprecedented scientific consensus on the emerging global threat of climate change to our health, safety and economies.

All of this was made more real to many with unprecedented devastation from fires and other extreme weather events and storms. Our industry’s response—producing more efficient buildings with lower environmental footprints—is admirable but continues to be wholly inadequate to the enormity of the task at hand. It is clear that we have to find a way to scale and push the movement beyond the proverbial “choir,” to developers, companies and communities that still only see the initial economic first costs and short-term profit as values to pursue. In short, we have to become better at what we do.

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Sustainability ♦ Resilience ♦ Health and Wellness ♦ Codes and Standards ♦ Renewable Energy

Resilience, Retooling, Renewables and Resonance

By Alan Scott, FAIA, LEED Fellow, LEED AP BD+C, O+M, WELL AP, CEM, Senior Associate, WSP

Of all the sustainability trends I have been following over the past year, there are four that stand out and that I believe will become increasingly important in the year ahead. While these trends apply broadly to residential and commercial building of multiple scales and construction types, there is some of particular importance to the metal building industry.

Resilience

We are already feeling the significant and serious impacts of climate change, 2018 was the third year in a row of above-average hurricane seasons in the U.S., (including the record-setting Hurricane Michael that devastated parts of the Florida Panhandle). It was also one of the worst wildfire seasons on record, culminating in the deadly and destructive Camp Fire in Northern California.

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Recyclability ♦ Environmental Impact ♦ Improved Quality ♦ Market Growth ♦ Industry Collaboration

Metal Roofing Forecasts and Trends for 2019

By Renee Ramey, Executive Director, Metal Roofing Alliance

2018 was a good year for the metal roofing industry. With a robust economy, a strong housing market and homeowners willing to invest in better quality, longer lasting products, metal roofing was and is positioned to take advantage of additional growth and market adoption.

Devastating climate events ranging from wildfires to monster hurricanes, destructive hailstorms and thunderstorms also reinforced the need for U.S. and Canadian homeowners to take action to better protect their homes against extremes. The need for improved building standards and practices literally hit home this past year, with metal roofing in the spotlight not only for long-lasting performance, but for being able to withstand severe conditions.

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Labor Shortage ♦ Training ♦ Growth ♦ Improved Processes ♦ Industry Collaboration

Help Wanted Good Help Wanted

By David Beard, President, Iron Workers District Council of St. Louis and Vicinity

You do not have to go far to hear or read something related to the shortage of workers in America. The economic boom we are experiencing has created a scarcity of workers in virtually all sectors. The construction depression that started in 2009 forced many experienced workers out of the construction industry, which left a giant hole in our workforce, especially when it comes to lead men and supervision.

Today’s construction companies are placing more responsibilities on their project managers and foremen than ever before. With the margins that are razor-thin and the schedules tightened, it is more important than ever to give your leadership the training they need. The Ironworkers International, along with its labor management partner, IMPACT, has been busy developing new programs for construction personnel that will help them succeed.

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Labor Shortage ♦ Training ♦ Education ♦ Improved Processes ♦ Industry Collaboration

Attracting Younger Workers to the Trades

By Keith Wentworth, President, Metal Building Contractors & Erectors Association

As a contractor, it is exciting to be included in a piece on the future of the industry. It makes me proud to see that the Metal Building Contractors & Erectors Association (MBCEA) has finally taken its rightful place at the table. By working together and acknowledging multiple viewpoints, our industry is so much stronger. Nowhere is this more evident than in the labor shortage.

Our manufacturers and engineers continue to design ever more sophisticated buildings. It is more important now than ever that our contractors and erectors have well-trained, highly capable crews. Unfortunately, our industry is aging with fewer young people interested in the trades. We all have a vested interest in this challenge; thus we all need to work to address it.

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Industry Growth ♦ Codes and Standards ♦ Improved Manufacturing ♦ Increased Sophistication ♦ Industry Collaboration

A Cautiously Optimistic View of the Industry

By Tony Bouquot, General Manager, MBMA

The turn of a new year is a time when many industry associations get together for their annual meetings—hopefully someplace warm. It is therefore a great time to talk to members and get a pulse on the year that was and the year to come. At the 2018 Metal Building Manufacturers Association (MBMA) annual meeting in Orlando, Fla., I would describe the mood of our members as cautiously optimistic. There are a number of factors affecting that mood.

Manufacturers are cautious because of uncertainty in the current political and regulatory environment. There is uncertainty about the split U.S. Congress that takes office in January, and uncertainty about the effects of tariffs on steel, and other imported and exported products. There is concern about the historically low unemployment rate, which has made recruitment of new workers at a time of increased demand for metal buildings challenging.

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Codes and Standards ♦ Labor Shortage ♦ Training ♦ Education ♦ Sustainability

Looking to Build, Improve and Grow

By Karl Hielscher, Executive Director, Metal Construction Association

2019 is certain to continue 2018’s trends of increasing building code complexity, skilled labor and educational challenges, and emphasizing sustainability when designing and building tomorrow’s commercial and residential structures.

2018 was the year for International Building Codes’ (IBC) non-structural code review deliberations, and 2019 begins the IBC structural code review process. The National Fire Protection Association (NFPA) continues to deliberate increasing fire safety standards for construction assemblies involving combustible materials rather than just the materials, and that promises to require our industry to address more complex construction processes. A busy year is ahead for all of us.

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