New Home for Growing Family Wins ACI Award for Bartley Corporation
Bartley Corporation of Ashton, MD recently won an award for excellence in concrete construction by the Maryland Chapter of American Concrete Institute (ACI). The project and team members were recognized at the Excellence in Concrete Awards Banquet on Wednesday, June 1, 2005.
The concrete house was one of their own – a home for Jim Bartley, Vice President of the Bartley Corp., and his growing family. Margarita Bartley, Jim’s wife, had studied and worked as an architect in Ecuador, South America and desired to create her own home. A few designs and a Not So Big House book later, they had a layout they both could live with.
For Jim, the desired end result was “a box” with no more than 3000 square-feet of total space on the first and second floors. In order to overcome the limitation of size, Margarita used an open floor plan with an emphasis on connecting interior and exterior spaces.
To break up the box appearance, the main entrance was offset and a porch roof and trellis were incorporated into the design. By designing a cutout of the right side corner, the front elevation was broken up into two-volumes instead of one. The left side of the house displays the garage and first floor patio, and is visible from the street. This side shows off the bare concrete, which is broken up by a center feature of stone and EIFS.
The Bartley Corp. was right at home building the basement – in more ways than one. The new home is right next to the Bartley office. The basement and garage walls were a little taller than planned due to the deeper excavations (see builders…it happens to us too.) The basement was sprayed and tiled, Boman Kemp window wells in place, and the garage slabs were prepped and ready for inspection. A radiant heating system was installed in the basement floor, as well as all subsequent floors.
The use of Lite Deck floor system in the basement floor allowed for 22-foot spans between beam and walls with room to spare. The joist beams (perpendicular to the flush beam) were pre-formed in each piece of Lite Deck.
“My crew thought I was crazy to use the foam for under-forming,” stated Bartley. “But once the first floor was poured, they were believers.”
Bartley’s standard basement aluminum forming system was used for all the vertical concrete on the first floor. Scaffold brackets were installed for safety and the rest was a walk in the park for the crew. The process was quicker on the second floor without contention of a patio slab with intersecting beams at different levels. The typical tubing and block-outs were installed and the pour went without a hitch.
“I worked closely with the subcontractors in the planning process prior to construction,” Bartley explained. “Their ideas and good workmanship made this house a success.”
In two months and eleven days “the box” was complete.
THE TRADES’ TURN
A 2-inch metal stud wall was installed inside the perimeter concrete walls and 4-inch metal stud interior walls were installed to frame interior partitions. The only walls not padded out and drywalled were the stairway walls and columns. Textured paint gave them a stucco appearance.
The installation of the electrical, HVAC and plumbing were similar to working on a woodframed house because of the exterior walls. The differences, however, presented challenges. A fair amount of foam underforming had to be removed to accommodate recessed lights, ducts and pipes. Items that cross from one floor to another had to pass through a previously placed opening.
All systems were conventional except for the HVAC. The house is cooled using two zones – one in the basement and the second in the attic. Each zone uses an air handler and heat pump, which also provide a backup heating system. In addition, each zone has a heat recovery ventilator that periodically exchanges the air inside the house without changing the interior temperature. A concrete home is much tighter than a frame house. The lack of air movement makes a concrete home more energy efficient. Air exchange is necessary to keep the air fresh when the house is closed up.
Insulation is a critical element of any house, and Bartley chose a twofold approach. R-13 Batt insulation was installed in the stud walls at the perimeter. 1 1/2” foam insulation was attached to the concrete walls prior to applying EIFS (a stucco-like epoxy coating) to the exterior.
INTERIOR
The first floor was 1500 sq. ft. and had to accommodate all needs for daytime living – cooking, eating, studying, and socializing. The kitchen, breakfast room/ mudroom, dining room, family/living room, entry foyer and study were ingeniously connected to exterior porches and patios that visually increase the first floor. A palate of earthy tones blended the interior with the naturally wood exterior. Stain concrete floors, stone, slate, granite and stucco-textured paints brought the outside in.
The second floor greets you with stucco/painted columns and stained concrete floors. It contains the master bedroom as well as bedrooms for the children and guests. One feature that proved to be a challenge was the master bathroom. In a 7 x 15 foot space, Margarita had to fit a shower, tub, toilet, linen cabinet, double sink and vanity desk without sacrifice the openness of the room. To overcome the long skinny feeling, the bathtub/shower was closed in with floor-to-ceiling glass. The end result is light, open and well arranged.
Construction of the home took eight months from start to finish. The total cost to build was $465,000. The Bartley Corp. built the concrete shell and then the trades came in and finished the job.
LIVING IN A CONCRETE HOME
The roller coaster ride of building a home was over on November 13, 2004 – the day we moved in, and not a moment too soon! Working full-time and building a concrete house was an awesome experience that I never want to relive. After being here five months, I am convinced I will never again live in a wood-framed house.
In a concrete house, the floors don’t creak or bounce. Even the bounce of wood stairway doesn’t exist because the top and bottom are attached to concrete. Concrete and metal don’t burn or rot, and neither one is a food source for mold. Termites walk away in disgust. Our deck will never warp and there are no nails to pop. Fuel prices are up, and we spent less to heat our 4200 square foot concrete house than our previous 1900 square foot woodframed house. The house is quiet (unless the kids are in the same room). The floors are warm and give very even heat with no draft. Since I am not a fan of home maintenance, this house should pay dividends for years to come.
Margarita is in house heaven. She is able to live in a home that she designed. Growing up in Ecuador, she is accustomed to concrete and masonry homes. Moving into a wood house took her some getting used to. Being back in a concrete house is like coming home.
Jim Bartley
Talia J. Nelson, Local Chapters Coordinator tnelson@cfawalls.orgGetting Customers Stuck On YOU
Voice mail, email, snail-mail, direct mail, in person calls – there’s never been more possible ways to reach and grow customers. Then why all the sad faces? You know – unreturned calls, emails, direct mailers flushed down the circular file. Are your methods not working like they used to? Buyers are too busy to win over using old approaches! Effective sales and marketing requires getting customers stuck on you like white on rice. Want to increase your stickiness? Here’s how:
STICK OUT IN SALES
Being a “robo-salesperson” or having a “robo-sales force” (using the same methods as everyone else) is death. Let’s face it, robotics work in building cars, not in sales! When’s the last time you’ve seen a group of prospects moving uniformly down your “potential new customer assembly line” waiting to be worked on by your automated selling approach? Ridiculous, of course. You need the courage to stick out as you develop relationships – moving a prospect into a customer, eventually to a repeat client. Here’s some ways to stick out:
• Stop Selling Lime-Green Jackets to People Looking for Tan Blazers – There’s something I have to confess. I’m colorblind. Several years ago (before I had the guts to stick out) I went in alone to a men’s clothing store looking for a tan blazer and navy blue pants. The sales rep enthusiastically said, “I have just the thing for you.” After I put on his recommended jacket and pants combination my wife Rose walks in, looks me over and says, “That’s interesting, Michael.” I didn’t know what she meant by “interesting” until she told me I was wearing a lime-green jacket with navy pants! The sales rep in his zeal to make a sale did not ask me where I would be wearing the jacket (in this case for a business event), or anything about my tastes (I’m just not a lime-green jacket kind of guy). Sticking out in sales today requires you to dialogue before you monologue – asking questions before selling product (in this case the slow-turn lime green jacket). Do you or your sales team have a good list of questions you ask before you prescribe your solution? Do these questions need to be revised to fit today’s more educated customer?
• Become a Resource – We all love people who put our interests first and help us achieve our goals. Start asking these 3 questions:
1. What are your goals? 2. What are the areas you are looking to improve on (your challenges)? 3. How else can I serve you – even outside the scope of my products?Identify specific ways you can help with these questions. Your tenacious efforts to help the customer with their agenda will develop the super-glue for a profitable relationship with you.
• Ask, “Am I nuts, or do these ideas make sense?” – Give your prospects permission before you present to tell you what ideas they like or don’t like. Listen, take notes, and report back how you’ve used these insights.
• Use “The Brass” for More Than Just Fixtures – Customers love to feel special – to be worthy of interactions with “top players” in your organization. Get senior leadership involved to grow relationships and sales (ask leaders to write a thank you letter, attend or speak at a meeting, make a phone call, sales call, or service call to see how things are going).
STICK TOGETHER WITH MARKETING
To repackage a familiar saying, “Customers of a feather stick together.” The goal is not to sell everyone it is to find the right someone’s! Work to become the recognized expert – the undisputed champion – in the market niche(s) with the best sales and profits for you. Here’s how:
• Look for Love in All the Right Places – Identify your best, most profitable prospect. Locate where they “hang out” (i.e. associations, meetings etc.). Read and get involved in their world (note: for more information on this topic read article “Looking for Love in All the Right Places” at www.leadershipbuilders.com).
• Speak Up – Look for opportunities to speak at industry functions. Try to “stack the room” with your best customers. Get an industry influencer to introduce you to maximize your credibility. Not comfortable speaking? Join a Toastmasters group to build confidence.
• Create “Stars” in the Press – Identify a customer who has gone out on the edge to use your product in a new or exciting way. Contact trade publications and media outlets who might like to report on this innovation. Give them the contact information for your customer. Goal – get positive press to build customer loyalty and sales within a specific industry.
STICK WITH IT – EFFECTIVE EFFORT
Having the courage to stick out in sales and the marketing focus to stick together with the right customers is good, but they are still not enough. Getting time in your targeted customer’s day still requires sweat equity and “organized determination.” Here’s two ways to get the most out of your work:
1 Think Donatos – Respect the Process – Winners prepare and deliver for customers consistently. Do the following:
• Before an appointment – Develop an agenda, call objectives, and customer-specific questions that will allow you to dig deeper into needs you think might exist from your pre-call research.
• At the end of an appointment – Get agreement on the next actions, time frames, and people responsible.
• After the appointment – Have one (and only one) follow up system to ensure delivery on your agreed steps. Remember, trust is built through flaw-less follow up.
2 Get Your Team Involved – Get your inside staff to stay in contact with smaller accounts. Stay in touch to win business.
YOUR STICKINESS ASSIGNMENT
Step back from your current grind. Grade yourself from “A to F” on the following:
1. Is your marketing focused on the most profitable group of customers?
2. How customer-oriented are the questions your sales reps ask before they start selling? Does your sales team get honest feedback and serve as a resource to the customer?
3. Beyond your “salepeople” how involved are senior leaders and inside staff with customers?
If you’re not an “A” today you’re in a potentially vulnerable competitive position. Identify the training, market focus, and new responsibilities you need your people to take to get more customers stuck on you tomorrow!
Martinson Construction Provides T-MASS System Basement Demo
Energy performance is becoming increasingly important in residential construction. A critical component in this effort is insulation of the basement or foundation. Several systems exist to accomplish this including interior furring with insulation and exterior insulation. The Thermomass Sandwich wall system has been used for nearly twenty years with traditional modular forming systems but this is the first application using the BEP gang-forming system. The biggest advantage of this system is that the thermal loss attributable to the steel form ties can be eliminated.
In May, Martinson Construction, the largest concrete contractor in the Waterloo/Cedar Falls, IA area, provided a demonstration pour using BEP forms with the STYROFOAM* T-MASS* Residential Poured-in-Place Insulation System in Dunkerton, Iowa.
Martinson used 9′ tall Vertical-Textured B.E.P. forms, with widths ranging from 6′ to 21′ long plus various corners and fillers. The walls formed were 10″ thick and the job was approximately 2000 sq. ft. The STYROFOAM* T-MASS* Residential Poured-in-Place Insulation System improves the energy efficiency of poured foundations by sandwiching the insulation between the concrete. This reduces the need for interior and exterior finishes that are typically required when foam insulation is exposed. The system combines energy-efficient STYROFOAM brand insulation and special connectors that can be used with any poured-in-place concrete form system.
“The process proved quite simple,” Jennie Peacock, vice president of B.E.P. Forming Systems, Inc. “With the use of B.E.P. Forms and the reusable POWER Taper Tie System the foam was easily secured in the middle of the wall unlike the tedious process with standard wall ties that are left in the wall.”
As the forms were being crane set, and the insulation was positioned in the forms, a 1 1/4″ drill through the taper tie hole to penetrate through the insulation was all that was needed. Then the taper ties further secured the insulation.
Even though it was Martinson Construction’s first time using the T-Mass system, the crew of approximately six, with the help of a few highly-seasoned professionals such as Bob Speed of Twin Cities Concrete Systems, Inc in MN, set and poured the wall, without any hindrance, in a timely manner. The pour took just over an hour.
“The guys were a bit skeptical at first,” states Dave Martinson, vice president of Martinson Construction, “but the application was easier than anticipated and they are willing to do it again.”
After stripping the forms, the taper ties are removed from the wall, which will prevent thermal transfer or residual hardware rust – a very important factor in insulating walls.
Several CFA members attended the demonstration including B.E.P.; Dalaco; Tom Brown of TJ Construction Unlimited, Inc.; and Bob Speed of Twin Cities Concrete Systems, Inc. Composite Technologies, who sponsored the event, provided lunch for everyone who attended.
Martinson Construction completes 257 to 300 foundations per year in addition to their commercial business. They have been active members of the CFA since 1993.
For more information about the STYROFOAM* T-MASS* Residential Poured-in-Place Insulation System, visit: www.thermomass.com/construction/pouredinplace.htm or www.styrofoam.com/pouredinplace or www.bepformingsystems.com Talia J. Nelson, Local Chapter Coordinator tnelson@cfawalls.orgSaving the Environment
CFA MEMBERS NETWORK AS THEY DO THEIR PART TO SAVE THE ENVIRONMENT
Snow Geese have multiplied to a point they are destroying the Arctic breeding grounds for other wildlife. So four CFA members felt it was their obligation to help control the snow goose population by going on a Spring Snow Goose Hunt. Maybe they got a little enjoyment out of it too.
One of the many benefits of the CFA is the friendships you gain with people who are working in the same line of work as you. This was evident in South Dakota recently, when four CFA members from across the country met to go Snow Goose hunting. CFA members Kirby Justesen from Utah, Steve Esker from Illinois, and Barry and Mike Herbert from Georgia journeyed to South Dakota for the spring snow goose hunt. It proved to be a very successful hunt with the four of them taking over thirty birds.
As usual whenever CFA members get together, the main topic of conversation was concrete and pouring walls.
The CFA – Then and Now
Our little company first joined the old Poured Concrete Wall Contractors Association (PCWCA) I think in 1978. The meeting was in Cambridge, Mass., and my boss, Dan Lavy, and I flew out to see what this was all about. It was a fairly small group then, it seems to me that there weren’t more than 30 or 40 guys there, if that many. When I say guys, this is exactly what I mean, I don’t recall that families were a prominent feature at all.
I do remember some of the names and faces, little did this 26-year-old kid know that I was “hangin” with such icons to our industry as Buck Sweet, Hap Anderson, Stub Hedrick, Bob Sawyer, and the Meyers father-son team. I might have been more impressed at the time that the Doobie Brothers were staying in our Hotel. I could tell by the stories I heard, there were much bigger, better and more innovative companies in this group than ours.
A couple of the hot topics at this early meeting was the threat of treated plywood basements and form theft. The first never became much of a problem in our area, the latter still is.
The simple fact is that this group was formed by true visionaries. These folks knew that this was a lonely business, and to be able to network (the word wasn’t invented for another 18 or 20 years!) with others in the industry would be a great thing.
My hat is off to these pioneers and the other members who were smart enough to join back then and maintain their memberships through all these years. I hope I haven’t missed anyone, but here is a list of companies that were members then (before 1980) and still are now:
March 1975 ——– Perma-Structo Inc. March 1977 ——– Don Andrew Concrete April 1977 ———- The Bartley Corp Swearingin Construction June 1977 ———- Grimmius Inc. Aug 1977 ———– Picasso Concrete Jan 1978 ———– Van Wycks Inc. Wall Ties & Forms March 1978 ——– Precise Forms April 1978 ———- Balmer Bros Concrete Aug 1978 ———– Formco Foundations Sept 1978 ———– TriState Concrete Services Nov 1978 ———– Clark Foundation Co. Dec 1978 ———– Oostburg Concrete Products May 1979 ———-Menke Brothers Construction.The next time you see one of these folks, thank them for their continued support of our group. They are the foundation we have grown on. The advice, ideas, and inspiration they have shared with the rest of us, is priceless.
Terry Lavy, CFA President Lavy Concrete Construction Inc. terry@lavyconcrete.comLooking Back – CFA Celebrates 30 Years
The Concrete Foundations Association will celebrate its 30th Anniversary at this summer’s meeting in San Francisco. What’s even harder to believe is that I will have been with the Association for nearly half of those years (14 to be exact). There have been a lot of changes in the industry and the Association during the past 14 years – most of them good.
The poured wall industry continues to grow and expand. Areas experiencing the biggest growth are areas where concrete masonry was once the material of choice. The poured wall industry has become more mechanized with boom trucks, conveyors, concrete pumps, stone shooters and a host of other labor saving devices. Concrete blocks must still be laid one at a time.
Technology has also had an impact on the industry. CAD systems enable contractors to enter basic details about the foundation and receive a printout that modulates the forms, calculates the concrete volume and provides data for layout. CAD systems, coupled with robotic layout systems have enabled foundation contractors to layout a foundation quicker, with fewer person-hours, and with much greater accuracy.
Cell phone technology has advanced, making communications easier. Global positioning systems allow a dispatcher sitting in his office to know where every one of his vehicles is at any given time. Digital photography allows you to take inexpensive, portable, and quality photos of a job site or job conditions. Web cameras allow you to track what’s happening on your job site 24 hours per day while sitting in the comfort of your office – or living room if you prefer. Web-based information systems allow you to do structural calculations on the wall and share project information.
The Association has also changed. Total membership has more than doubled, to over 350 members. The CFA’s publication, once a drab, 4-page, intermittently published newsletter, is now published 6 times per year in full color, and is regularly 32 pages or more. We spearhead research and represent the industry on a variety of national code and regulatory bodies. Several CFA chapters have been born and we now have regional meetings (scaled down versions of our summer meetings) twice a year.
The members themselves are also changing. I see numerous second-generation businesses where sons and daughters are taking over where mom and dad left off. Younger members are more technologically savvy and are open to new ideas but they work just as hard as their mentors.
One thing that hasn’t changed, however, is what has made the CFA great. It’s the kindness, openness, and friendliness of the members. Members have always been willing to share their ideas and knowledge, their triumphs and their failures, and their opinions, all for the better of the industry. The networking, both formal and informal between members, and the friendships that have developed as a result in participation in the CFA, remains the primary reason people belong. Let’s hope that is one thing that never changes.
Ed Sauter, Executive Director, CFA esauter@cfawalls.orgOkay, So Tell Me How to Implement the Data…
Jim Baty, CFA Technical DirectorYou’ve received your copy of the CFA Cold Weather Research Report, read it cover to cover and now you sit back in your chair and think to yourself…What do I do now? There is an incredible amount of data in our research report, however, like most reports of such a technical nature, even with the best intentions in mind, it is not always crystal clear what the next step should be for immediate implementation.Fortunately, the weather is warming up and cold weather is one of the last things on our minds. It is now the perfect time to begin considering what your plan is for next year’s cold weather needs. Let me suggest a few ways to make our report impact your decisions for those plans.
Let’s begin with the very basic first step. At the end of the report,there are a series of pages providing summaries of the results and recommendations for contractors, concrete suppliers and code officials. It is in everyone’s best interests for you to develop a thorough understanding for the performance of the concrete that will be used during cold weather conditions and the imperative details for consideration in practicing good cold weather concrete. Following these guidelines, the performance of most mix designs can already be proven successful.
The next step in the process is to understand the mixes that you currently work with and what, if any, modifications you should make to your plans for mix designs for varying conditions. This is perhaps a bit more detailed of a step at first glance, however, with the effort that has been produced to this point and the results stemming from the three year program summarized in the report, you have a distinct opportunity to quickly validate the anticipated performance of your own mix designs. This is the real meat of our research that you should strongly consider employing through these next couple of months.
A great start begins with your ready mix supplier. The partnership that can be created between the professional that creates the mix and the professional that creates the wall can be a major key to the success of cold weather concrete foundations. It is the business of the ready mix supplier to know the performance of concrete mixes and the maturity that should be expected from a given mix. Although there are 36 mix designs that you could produce from our models, they may not be the most economical for your market or may not reflect specific components that are delivered economically to you. For this reason, an analysis of the mix designs you douse, or your producer does recommend, should take place.
Analyzing a mix design without going through the extensive submission to cold or frozen temperatures takes place with the aid of a maturity pro Maturity testing with a computer allows you to extrapolate the data from these standard cylinder breaks to other temperatures. For instance, from the research completed we can deduce that concrete does indeed cure at cold temperatures, albeit slowly, as long as it does not freeze. Once it freezes, curing stops and as long as the maturity has reached approximately 500 psi before that point, there will be no significant or appreciable impact to the concrete. We also know that the maturity system accurately tracks the strength gain rate. We showed that if cylinders are cured at warmer temps (our research used 50F but it works at any temp within reason) the maturity curves remain valid and especially so at low concrete temperatures. Therefore, if you have cylinder breaks made at 70°F, then you create a maturity curve based on that temperature. This information is then introduced into the maturity system in the field where ambient temps, for instance, may be in the 15-20°F range, the system would accurately predict the strengths attained during those actual conditions within an acceptable margin of error for such low strength concrete.
However, remember that what we are talking about is concrete temperatures. At a concrete temperature of 10°F the concrete will absolutely be frozen and thus worthless if it hasn’t first reached the approximate minimum maturity of 500psi. But at an ambient (air) temperature of 10°F (or lower, even) the internal concrete temperature may be more like 33-35°F. A key statement to this fact in the report is that ambient temperature really means nothing or very little if anything other than the setting the base for drawing heat from a warm body like our concrete at a given rate.
There will be temperatures at which you cannot place concrete, or at least you should not place concrete. There are mixes that have been proven to perform at sub-zero ambient temperatures yet we all know that it is not to our advantage as owners to push our crews to that level of performance. Still, armed with this information, change can occur.
An example of this success has been found recently in Anchorage, Alaska. From the report, you can see the extensive protection systems that this market was forced to employ at very conservative ambient temperatures. Through the efforts of our research, a very concerned builder, CFA foundation contractor and a local HBA representative, the information from the Cold Weather Research Report was presented to the local jurisdiction. Let me quote the builder in that market from a recent email to the CFA Headquarters:
Just wanted to let you guys know that we now have a new policy in Anchorage. We can now place Mix # 29 and # 34 down to 20 degrees F with no tenting or heat. We are replacing calcium with nonchloride accelerators (NCAs). This a dream come true. My last tent that I did last April, when it was 35 degrees out, cost about $2,700. What a waste! We definitely have been brain washed about this matter for way too long. Thanks again for all your hard work.
Can you be successful employing this process in your local jurisdiction? Absolutely! Will it take extensive efforts on your part to provide the information necessary and the proof that your mix designs, or those from our research will work? Very likely not. I encourage you to dig into this report. Contact CFA Headquarters to discuss its application to your market. Touch base with key individuals from the research team like Brad Barnes, Terry Lavy and John Gnaedinger. This is a great example of the impact membership in our Association can have on your business and it is up to you to put it to work for you.
GOOD LUCK AND HAPPY COLD WEATHER CONCRETING.
Record Starts in 2004
How did your building business do last year? The market for all new home construction in the United States hit an all-time high in 2004, reaching a stunning total of 1.953 million housing starts. This is a 5.7% increase from the 1.848 million starts in 2003.
On the single-family side, U.S. home builders started 1.6 million homes. This is a 7.3% increase over the 1.5 million single-family homes built in 2003.
For the year, starts were up 9.2% in the West, 8.3% in the South and 6.6% in the Northeast; starts declined 4.8% in the Midwest.
“The nations home builders continue to move forward to meet the strong housing demand that has characterized the marketplace for some time, and we are confident that 2005 will be another excellent year for housing,” says NAHB President David Wilson, a custom home builder from Ketchum, ID.
Wilson notes that the industry was helped last year by persistently low mortgage interest rates, but that ongoing gains this year in jobs and household income should help offset the slow but steady rise in mortgage interest rates anticipated as a result of Federal Reserve policy. “We are geared up for another big housing year,” Wilson says, “although we don’t expect to be building at quite the break-neck pace of 2004.”
For the month of December, housing starts climbed 10.9% to a seasonally adjusted annual rate of 2.004 million, according to the Commerce Department’s monthly report on residential construction. Furthermore, the backlog of unused permits rose in December, providing forward momentum for housing production starting off the new year.
Multifamily housing starts were up 0.6% in December, at a seasonally adjusted annual rate of 326,000; they were down a scant 1% for the year, slipping to 345,000 units from 349,000 units in 2003.
“Home building in December was absolutely solid, finishing up the year nicely after some softening in November that was related to bad weather,” says David Seiders, chief economist of NAHB. “The level of unused building permits moved up last month, and that is a favorable sign for starts activity as we move forward this year.” He says builders polled in this month’s NAHB/Wells Fargo Housing Market Index (HMI) expressed a high degree of optimism about housing market conditions currently and over the next six months.
Seiders sees a modest decline of 3% to 4% in new home construction this year as the result of higher mortgage rates, which re projected to average about 6.3% on fixed-rate loans, up from 5.8% last year.
Mantel of Leadership in Construction Shifting
OIL PRICES PLAY THE WILDCARD IN FALL ECONOMIC FORECAST
Higher oil prices will slow overall economic activity, delaying a recovery in nonresidential and public construction. In addition, a continuation of low mortgage rates will prolong the boom in residential construction. According to the latest economic forecast from the Portland Cement Association (PCA), consumer spending will be partially compromised, inflation will run stronger, job gains will be smaller, and sentiment in both the consumer and business areas will be more sedated.
“The level and composition of construction spending is shifting,” says PCA chief economist Ed Sullivan. “In retrospect, 2004 represented a year of transition for the U.S. construction market. The strengthening economy and an increase in interest rates have set the stage for a recovery in public and nonresidential activity. The wildcard in PCA’s forecast is oil prices.”
A scenario of higher oil prices and slower economic growth translates into three key considerations to PCA’s forecast. First, slower overall economic growth implies a more gradual recovery in capacity utilization and vacancy rates, and generally lowers the expected return on investment for most commercial properties. This consideration puts PCA’s estimated gains in nonresidential construction at 9.9 percent in 2005.
Finally, mortgage rates will continue to rise, but slowly. PCA considers a mortgage rate of 6.5 percent the tripping rate – the rate that will exert enough pressure on home affordability to result in significant declines in single family construction activity. The tripping rate is not expected to materialize until the end of the first quarter of 2005, thereby adding legs to the already strong single family construction run. Overall residential construction should decrease slightly by 0.3 percent.
For 2005, construction spending is expected to reach an inflation adjusted level of $745 billion or 2.9 percent growth. Through 2008, nonresidential and public spending are expected to assume the mantel of growth leadership and residential activity will step down to become the growth laggard (although maintaining historically strong levels). Real GDP is Forecast at 3.5 percent for 2005.
CEMENT INTENSITIES IN CONSTRUCTION
PCA has incorporated an upward adjustment in cement intensities for most nonresidential and some public construction sectors. Cement intensities measure the amount of cement used per level of construction spending. The increase in cement intensities is based on an improvement in the competitive conditions of concrete, which has not run up as much in price, relative to steel.
CEMENT SHORTAGE ASSESSMENT UPDATE
Tight cement supply conditions now prevail in portions of 35 states; however, not all portions of each state are characterized by tight supplies. The methodology used in the PCA shortage map tends to exaggerate the national shortage assessment. Where cement is in short supply, the reasons are typically twofold: strong cement demand has materialized due largely to strong residential construction activity, and not enough ships are available to bring in imported cement.
PCA forecasts Portland cement consumption of 112 million tons this year, a 4.4 percent gain from last year. Gains of 2.9 percent and 2.1 percent are forecast for 2005 and 2006, respectively.
To obtain a copy of PCA’s Fall Forecast contact Ryan Puckett at rpuckett@cement.org or Ed Sullivan at esullivan@cement.org.
ABOUT PCA
Based in Skokie, Ill., the Portland Cement Association represents cement companies in the United States and Canada. It conducts market development, engineering research, education, and public affairs programs.
John C. Maxwell to Give Keynote Address at ASCC CEO Forum
The American Society of Concrete Contractors, St. Louis, Mo., will hold its CEO Forum June 23-25, 2005 at The American Club, Kohler, Wis. John C. Maxwell, known as “America’s expert on leadership,’ will present the keynote address at 7:30 p.m. June 23.
The ASCC CEO Forum is a three-day event for CEOs, presidents and other top managers of concrete contracting firms. Through speakers, round table discussions and networking, contractors of various sizes and areas of specialization explore business topics of immediate and long range interest to their companies.
Maxwell speaks to hundreds of thousands of people each year, including Fortune 500 companies, the U.S. Military Academy at West Point, the NCAA, the NBA, and the NFL. He is the founder of several leadership organizations, including Maximum Impact, and the author of more than thirty books, including Today Matters, Thinking for a Change, There’s No Such Thing as “Business” Ethics, and The 21 Irrefutable Laws of Leadership, which has sold over one million copies. Maxwell’s latest book is “Winning with People.”
Additional Forum speakers include William Casey, president, Access Investment Advisors; David Hoyt, director of business development, Maximum Impact; Chris Kruegger, president, Zerah Services, Inc.: Bruce Suprenant, president, Concrete Engineering Specialists, LLC; and Ward Malisch, senior managing director, American Concrete Institute.
The ASSC produces this annual event in conjunction with its partners, the American Concrete Institute and Hanley Wood. The ASSC is a non-profit organization dedicated to enhancing the capabilities of those who build with concrete, and to providing them a unified voice in the construction industry. For more information about ASSC, visit www.ascconline.org or call 1-866-788-2722.
