Braden Black CEO
“Skilled Trades is a skilled personnel provider to the industrial, commercial, and energy construction\maintenance industry. If you would like to learn more about how we can help your business maximize productivity and minimize employment risk, please click on your state below for a Market Manager in your area.”
Wednesday, July 6, 2011
State of the Industry
The non-residential construction market typically follows the residential construction market by 6 to 12 months, both into the recession and coming out of the recession. Well, this time around it was not the case.
But I can make a prediction that if the residential market can turn the corner and improve their prospects, then those of us in the non-residential market should see some increased ability to both increase our profit margins and build quality products at a solid negotiated price.
The most recent financial study information from Shinn Consulting shows home builders are beginning to turn the corner toward profitability and gives indications of the effect of their decisions throughout the downturn. (This is great news for the non-residential market!)
Since 1993, Shinn Consulting has been collecting and analyzing financial data about their home builder clients, who have some of the best-run companies in the industry. The trends and benchmarks that Chuck and Emma Shinn have established from this research and other work have become industry standards.
Below is a recap of the results for their most recent study, from a webinar titled “Building Profitability in a Downturn: The Shinn Group's 18th Annual Financial and Operations Study Results.”
If you are in the non-residential market, get ready to follow our home builder brethren’s example and turn the corner to profitability and growth.
But I can make a prediction that if the residential market can turn the corner and improve their prospects, then those of us in the non-residential market should see some increased ability to both increase our profit margins and build quality products at a solid negotiated price.
The most recent financial study information from Shinn Consulting shows home builders are beginning to turn the corner toward profitability and gives indications of the effect of their decisions throughout the downturn. (This is great news for the non-residential market!)
Since 1993, Shinn Consulting has been collecting and analyzing financial data about their home builder clients, who have some of the best-run companies in the industry. The trends and benchmarks that Chuck and Emma Shinn have established from this research and other work have become industry standards.
Below is a recap of the results for their most recent study, from a webinar titled “Building Profitability in a Downturn: The Shinn Group's 18th Annual Financial and Operations Study Results.”
- Most of their builders made the right decisions early on, but they faced a couple of problems. They could not move fast enough and nobody expected the downturn to last 5 years.
- From 1993 (when they began collecting information) until 2006, Shinn Group clients saw increases in profitability by becoming more efficient and by being able to raise prices above the cost increases.
- In 2006, the pressure for pricing began, which marked the beginning of the stall in profits. 2007 was saved because of the backlog that was still in place during the first half of the year. 2008 was the first year of full downturn and began the precipitous decline in profits.
- Builders were able to get rid of land, but they were stuck with their existing product. The downturn was so steep that they couldn’t get new product onto the market. So, in order to sell, they had to discount existing product. As a result, they took hits on volume and gross profit. 2009 was almost a duplicate of 2008 with a slight decline. Finally, in 2010 we begin to see a recovery on the profitability front.
- The losses were fueled by two components: Direct Costs and Operating Expenses. Nobody expected the downturn to last this long, so they held on to staff. Many of the builders held on even until last year. So, their operating expenses went from 18% to 25%. Many builders admitted that shedding staff was the hardest thing they had to do, and they especially wanted to keep their core group around.
- During 2008 and 2009, the pressure on prices continued, and the builders tried to reduce cost by negotiating with trades. But they are still building the same product. (There is a limit on how much cost you can cut on those houses.)
- The builders pay a big price for holding onto staff. Now, sales volumes have declined significantly, and the percentage of cost to sales continued to increase because of the down push on prices and the failure to cut cost from the trades while building the same houses as in the past.
- Because sales revenues decline significantly and the builders are maintaining the same levels of staff, they get a double whammy. Operating expenses go totally out of kilter, rising to almost 25%.
- In the end of 2009 and beginning of 2010, the builders were able to make changes to their overhead and get new product in place. In 2010, we finally see the results of some hard choices made by the builders. There is a significant increase in gross profits, which is a result of redesigning the product to meet the new price ceilings adjusting for cost of the structure and specs.
- On the operating side, the builders are closer to reaching a balance between their operating expenses and their sales revenue. Staff has been cut to the levels required to sustain the new volumes. These costs are still above our target as builders are trying to protect their core management team but there has been a significant adjustment from 2009 to 2010.
If you are in the non-residential market, get ready to follow our home builder brethren’s example and turn the corner to profitability and growth.
Labels: Commercial, Construction Industry, Construction Labor, Economy, Industrial
Thursday, June 16, 2011
Healthcare Waivers
Depending on your political leanings, the 1,400 waivers granted is either proof the Obama administration’s Patient Protection and Affordable Care Act is flexible or evidence that it harbors a fatal flaw. And with so many high-profile businesses, labor unions and health insurance companies gobbling up waivers, construction company owners naturally are wondering what’s in it for them.
Waivers, temporary permission not to participate in PPACA, ostensibly are issued to organizations that offer “mini-med” insurance plans that cost employees little and offer severely limited benefits. The thinking is, an inferior plan is better than no plan. But these programs do little to allay workers’ liability if they become seriously ill. These limited benefits are why the government banned mini-meds effective 2014, with mandates that benefits rise until that effective date. Waiver applicants want to keep their minimal plans, arguing they can’t afford to increase payouts. It’s interesting that more than half the workers exempted so far are union members, while unions represent far less than 15 percent of America’s workforce.
Congressmen Mike Rogers (R-Mich.) and Dan Boren (D-Okla.) introduced the Health Care Waiver Fairness Act that would allow every small-business owner and even individual citizens to apply for a waiver from the new health care law. Until that bill becomes law, the federal Department of Health and Human Services says a group health plan or health insurance issuer may apply for a waiver. Here’s how to apply:
Send the following in an email to healthinsurance@hhs.gov (use “waiver” as the subject of the email):
1. The terms of the plan or policy form(s) for which a waiver is sought;
2. The number of individuals covered by the plan or policy form(s) submitted;
3. The annual limit(s) and rates applicable to the plan or policy form(s) submitted;
4. A brief description of why compliance with the interim final regulations would result in a significant decrease in access to benefits for those currently covered by such plans or policies, or significant increase in premiums paid by those covered by such plans or policies, along with any supporting documentation; and
5. An attestation, signed by the plan administrator or Chief Executive Officer of the issuer of the coverage, certifying 1) that the plan was in force prior to September 23, 2010; and 2) that the application of restricted annual limits to such plans or policies would result in a significant decrease in access to benefits for those currently covered by such plans or policies, or a significant increase in premiums paid by those covered by such plans or policies.
Employers with more than 50 workers are required by the act to offer health insurance to their employees or pay a fine for each worker who buys coverage on his or her own.
In applying for a waiver from the employer mandate, companies may benefit from taking a page from business groups arguing for a wholesale repeal of the provision. Companies can tailor their waiver request to their own situation. Waiver-seekers could argue that because workers are compensated through both wages and benefits, an artificial – that is, non-market-driven – increase in one (health care benefits) necessarily must result in the decrease in the other (wages).
As Brian Blase, political analyst at the Center for Health Policy Studies at The Heritage Foundation notes, “Productivity gains, not acts of Congress, are required to increase worker compensation over time. The Congressional Budget Office estimates that the employer mandate will cost businesses $52 billion in penalties from 2014 to 2019.”
A similar decrease in wages not only hurts working families, but also stymies economic activity and leaves huge gaps in state and federal tax revenue.
It also can be asserted that the mandate retards hiring practices at a time when the economy is just beginning to recover. Because the rule covers employers of 50 or more workers, those businesses hovering near the threshold will be chary to make hires that make them subject to the mandatory coverage. This will be especially true for low-skilled and low-wage workers, where the cost of providing health care coverage represents a disproportionally high cost.
Finally, applicants can show that the cost of additional health care coverage, or conversely the penalties for not providing it, will be shifted to consumers. Blase notes, “who actually pays the tax is determined by the market forces of supply and demand, not by where Congress ‘places’ the tax. Therefore, a significant part of the cost increase will be passed on to businesses’ customers in the form of higher prices.
On a lighter note, if your company is large enough to be affected, it is unlikely that as a non-union company, your health care package (unlike those of the unions, apparently, given all the waivers organized labor has received) falls into the woefully inadequate mini-med category, John Hayward, a writer at the Conservative-leaning Human Events, offers a few tongue-in-cheek suggestions on how to obtain a waiver. Among his advice is to join a union; work for a health care company, a big company, or the government; better yet, live in a district or state represented by a friend of Barack (it has been well-documented that businesses in Nancy Pelosi’s district have received a metric truckload of waivers and that the entire state of Nevada, represented by Senate Majority Leader Harry Reid, has secured a waiver as well).
Waivers, temporary permission not to participate in PPACA, ostensibly are issued to organizations that offer “mini-med” insurance plans that cost employees little and offer severely limited benefits. The thinking is, an inferior plan is better than no plan. But these programs do little to allay workers’ liability if they become seriously ill. These limited benefits are why the government banned mini-meds effective 2014, with mandates that benefits rise until that effective date. Waiver applicants want to keep their minimal plans, arguing they can’t afford to increase payouts. It’s interesting that more than half the workers exempted so far are union members, while unions represent far less than 15 percent of America’s workforce.
Congressmen Mike Rogers (R-Mich.) and Dan Boren (D-Okla.) introduced the Health Care Waiver Fairness Act that would allow every small-business owner and even individual citizens to apply for a waiver from the new health care law. Until that bill becomes law, the federal Department of Health and Human Services says a group health plan or health insurance issuer may apply for a waiver. Here’s how to apply:
Send the following in an email to healthinsurance@hhs.gov (use “waiver” as the subject of the email):
1. The terms of the plan or policy form(s) for which a waiver is sought;
2. The number of individuals covered by the plan or policy form(s) submitted;
3. The annual limit(s) and rates applicable to the plan or policy form(s) submitted;
4. A brief description of why compliance with the interim final regulations would result in a significant decrease in access to benefits for those currently covered by such plans or policies, or significant increase in premiums paid by those covered by such plans or policies, along with any supporting documentation; and
5. An attestation, signed by the plan administrator or Chief Executive Officer of the issuer of the coverage, certifying 1) that the plan was in force prior to September 23, 2010; and 2) that the application of restricted annual limits to such plans or policies would result in a significant decrease in access to benefits for those currently covered by such plans or policies, or a significant increase in premiums paid by those covered by such plans or policies.
In applying for a waiver from the employer mandate, companies may benefit from taking a page from business groups arguing for a wholesale repeal of the provision. Companies can tailor their waiver request to their own situation. Waiver-seekers could argue that because workers are compensated through both wages and benefits, an artificial – that is, non-market-driven – increase in one (health care benefits) necessarily must result in the decrease in the other (wages).
As Brian Blase, political analyst at the Center for Health Policy Studies at The Heritage Foundation notes, “Productivity gains, not acts of Congress, are required to increase worker compensation over time. The Congressional Budget Office estimates that the employer mandate will cost businesses $52 billion in penalties from 2014 to 2019.”
A similar decrease in wages not only hurts working families, but also stymies economic activity and leaves huge gaps in state and federal tax revenue.
It also can be asserted that the mandate retards hiring practices at a time when the economy is just beginning to recover. Because the rule covers employers of 50 or more workers, those businesses hovering near the threshold will be chary to make hires that make them subject to the mandatory coverage. This will be especially true for low-skilled and low-wage workers, where the cost of providing health care coverage represents a disproportionally high cost.
Finally, applicants can show that the cost of additional health care coverage, or conversely the penalties for not providing it, will be shifted to consumers. Blase notes, “who actually pays the tax is determined by the market forces of supply and demand, not by where Congress ‘places’ the tax. Therefore, a significant part of the cost increase will be passed on to businesses’ customers in the form of higher prices.
On a lighter note, if your company is large enough to be affected, it is unlikely that as a non-union company, your health care package (unlike those of the unions, apparently, given all the waivers organized labor has received) falls into the woefully inadequate mini-med category, John Hayward, a writer at the Conservative-leaning Human Events, offers a few tongue-in-cheek suggestions on how to obtain a waiver. Among his advice is to join a union; work for a health care company, a big company, or the government; better yet, live in a district or state represented by a friend of Barack (it has been well-documented that businesses in Nancy Pelosi’s district have received a metric truckload of waivers and that the entire state of Nevada, represented by Senate Majority Leader Harry Reid, has secured a waiver as well).
Labels: Commercial, Construction Industry, Healthcare, Industrial
Friday, May 20, 2011
Policies That May Help Prevent Union Salting
As organized labor struggles to remain relevant in the 21st century, unions are using ever more aggressive tactics. Salting is a tried and true method that construction unions continue to use to tilt the level playing field of America’s free market system.
Unions may use salting to achieve two different goals: either to “infiltrate” a non-union company in order to organize its workforce, or to goad a construction company into committing an unfair labor practice. The tactics haven’t changed much over the years because they’re effective and because bad public policy protects the methods used. Typically, a “salt” (so named because one or a few of them among your loyal workforce has the same effect as sodium chloride in your well) under the auspices of the local trade union, will visit the contractor’s headquarters to apply for a job, usually without revealing his or her union affiliation. While on the job the salt will sneak around the jobsite, ferreting out as much information about the company and its employees as possible.
While union organizers often publicly caution their salts never to commit sabotage, steal, lie, or cheat, as does one local of the International Brotherhood of Electrical Workers, they are just as likely to provide tips on exactly how to go about committing these reprehensible acts. The same website advises salts to “get a list of all employees, or make one of your own. If you can, try to include home addresses and telephone numbers.” Where is the spy likely to find this information? In the company’s confidential personnel files, of course.
When applying for the job, the union says the mole should “avoid obvious references to Union jobs in your resume…. If it’s obvious that you’ve worked at a union company, be prepared to give a believable explanation as to why you’re applying for a non-Union job.”
Notice the accepted union plan is to provide plausible explanations and to purposefully omit relevant information; that is, to find ways around the truth.
Perhaps in acknowledgement of unions’ status among loyal, hardworking employees, the site also advises salts, “Don’t tell your co-workers that you’re a Union member or a salt. You want to be seen as being an ordinary worker” rather than someone whose goal is to boost union membership rolls and coffers instead of putting in a fair day’s work for a fair day’s pay.”
More typically, the union’s plan in a salting campaign is to make a case for an unfair labor practice charge against a target non-union company. That is, to harass the company and its management simply for being in the vast majority and choosing to remain an open shop. To do this, the union might send a member to apply for a job while making it obvious she or he is affiliated with the union. The applicant may wear a union shirt or hardhat sticker, may even state outright his intention or may include union organizing experience on her job application. If the applicant is not hired for any reason, the union takes its case to the National Labor Relations Board accusing the company of discrimination based on union membership.
Incredibly, these schemes are protected, despite common sense arguments against that protection. Why should an employer be forced to hire someone whose stated or covert objective is to work counter to the employer’s desires? Refusing to hire a salt would not infringe on current employees’ rights to organize. Nevertheless, given the current law, there are some measures non –union contractors can take to protect their open-shop status.
While not intended as legal advice to prevent salting (always consult a labor attorney) some companies have instituted policies that have met with varying degrees of success while not running afoul of union rights. Here are some ideas worth considering:
• Insist all employment applications be completed on site or in front of an officer of the company. This will prevent a salt from making dozens of copies, distributing them to fellow salts for completion, and flooding the company with union-affiliated applicants, increasing the potential for unfair labor practice accusations.
• Prohibit disclosure of information not requested. Make it clear that just like religious affiliation, ethnic background, etc., you do not want to know about an applicant’s “volunteer” union organizing work history.
• Make it a policy not to accept photocopied or faxed applications in place of the application.
• Keep accurate records of interviews so legitimate reasons for not hiring an applicant can be cited (acceptable reasons may include poor hygiene, insubordinate attitude, etc., which union lackeys may effect to ensure they don’t get the job.)
As organized labor struggles to remain relevant in the 21st century, unions are using ever more aggressive tactics. Salting is a tried and true method that construction unions continue to use to tilt the level playing field of America’s free market system.
Unions may use salting to achieve two different goals: either to “infiltrate” a non-union company in order to organize its workforce, or to goad a construction company into committing an unfair labor practice. The tactics haven’t changed much over the years because they’re effective and because bad public policy protects the methods used. Typically, a “salt” (so named because one or a few of them among your loyal workforce has the same effect as sodium chloride in your well) under the auspices of the local trade union, will visit the contractor’s headquarters to apply for a job, usually without revealing his or her union affiliation. While on the job the salt will sneak around the jobsite, ferreting out as much information about the company and its employees as possible.
While union organizers often publicly caution their salts never to commit sabotage, steal, lie, or cheat, as does one local of the International Brotherhood of Electrical Workers, they are just as likely to provide tips on exactly how to go about committing these reprehensible acts. The same website advises salts to “get a list of all employees, or make one of your own. If you can, try to include home addresses and telephone numbers.” Where is the spy likely to find this information? In the company’s confidential personnel files, of course.
When applying for the job, the union says the mole should “avoid obvious references to Union jobs in your resume…. If it’s obvious that you’ve worked at a union company, be prepared to give a believable explanation as to why you’re applying for a non-Union job.”
Notice the accepted union plan is to provide plausible explanations and to purposefully omit relevant information; that is, to find ways around the truth.
Perhaps in acknowledgement of unions’ status among loyal, hardworking employees, the site also advises salts, “Don’t tell your co-workers that you’re a Union member or a salt. You want to be seen as being an ordinary worker” rather than someone whose goal is to boost union membership rolls and coffers instead of putting in a fair day’s work for a fair day’s pay.”
More typically, the union’s plan in a salting campaign is to make a case for an unfair labor practice charge against a target non-union company. That is, to harass the company and its management simply for being in the vast majority and choosing to remain an open shop. To do this, the union might send a member to apply for a job while making it obvious she or he is affiliated with the union. The applicant may wear a union shirt or hardhat sticker, may even state outright his intention or may include union organizing experience on her job application. If the applicant is not hired for any reason, the union takes its case to the National Labor Relations Board accusing the company of discrimination based on union membership.
Incredibly, these schemes are protected, despite common sense arguments against that protection. Why should an employer be forced to hire someone whose stated or covert objective is to work counter to the employer’s desires? Refusing to hire a salt would not infringe on current employees’ rights to organize. Nevertheless, given the current law, there are some measures non –union contractors can take to protect their open-shop status.
While not intended as legal advice to prevent salting (always consult a labor attorney) some companies have instituted policies that have met with varying degrees of success while not running afoul of union rights. Here are some ideas worth considering:
• Insist all employment applications be completed on site or in front of an officer of the company. This will prevent a salt from making dozens of copies, distributing them to fellow salts for completion, and flooding the company with union-affiliated applicants, increasing the potential for unfair labor practice accusations.
• Prohibit disclosure of information not requested. Make it clear that just like religious affiliation, ethnic background, etc., you do not want to know about an applicant’s “volunteer” union organizing work history.
• Make it a policy not to accept photocopied or faxed applications in place of the application.
• Keep accurate records of interviews so legitimate reasons for not hiring an applicant can be cited (acceptable reasons may include poor hygiene, insubordinate attitude, etc., which union lackeys may effect to ensure they don’t get the job.)
Labels: Commercial, Construction Industry, Construction Labor
Wednesday, April 27, 2011
"Construction Sloooowly Increases"
The lead paragraph in many national news stories about the country’s economic trends are starting to paint much rosier pictures. But as we continue to read toward the point of the stories’ inverted pyramid, it becomes clear that those three words should appear in the lead.
Raymond James’ almost-giddy April 4-8 Market Commentary is a perfect example:
“Happy days are here again….The job market is now adding jobs at a pace stronger than population growth…. It’s been clear for some time that large-scale job losses are far behind us….Small and medium-size firms have begun to add jobs in recent months….”
The fact is the recession that ended for everyone else nearly two years ago continues to plague the construction industry. Employment rolls remain down; spending for building projects is slow. The construction industry stands at a seasonally adjusted 5,514,000 – about 29 percent lower than it was in April 2006. Just as sad, today’s construction workforce is identical to what it was six months ago. It has been left at the terminal while the rest of the economy takes off on a solid recovery.
The industry’s unemployment rate stands at 20 percent, more than double the overall rate.
“The ongoing drop in construction employment in March, combined with the news that construction spending hit an 11-year low in February, is doubly distressing,” said Ken Simonson, chief economist for the Associated General Contractors of America. “Despite a few signs of an upturn, the industry as a whole has yet to touch bottom five full years after the peak in employment and spending.”
Even the few bright spots for construction, as highlighted in economic reports, come with asterisks. Private commercial construction spending increased 0.9 percent in February, according to a report by the U.S. Census Bureau. That’s welcome news, concedes Anirban Basu, chief economist for the Associated Builders and Contractors. He says the report confirms the beginning of a transition period in the industry from public – especially stimulus package-generated – projects to more private building. But ABC notes the February uptick does little to offset the prolonged downturn. Private nonresidential construction spending is down 13.2 percent in the last 12 months. And total nonresidential construction spending – public and private – is down 6.3 percent for the trailing 12 months. Private building simply is not picking up the slack as federal, state and local government investment in construction dries up.
“As the impact of federal stimulus wanes, and the broader economy continues to recover at a respectable clip, the volume of privately financed construction is now edging higher,” Basu said. “However, for the time being, that slender growth is being more than offset by decreases in publicly financed construction. This pattern is likely to continue into the summer. Demand for privately financed construction will probably expand only gradually due to an excess supply of hotel rooms, office space, retail space and industrial space in many markets. In contrast, the recent decline of construction activity in segments heavily financed by state and local governments will likely continue on that path.”
A combination of intense public construction and policies to stimulate private construction are required to persuade owners hesitant to pull the string on new projects. Here are some suggestions. On the public front:
• Eliminate Davis Bacon on public construction projects thus giving local and state government more bang for their buck in this tight government receipts environment.
• Remove restrictions and limitations on public-private partnerships that would allow construction of optional toll roads and other projects which require little initial outlay of public money.
• Expedite approval processes, environmental impact reviews, licensing, inspections and other red tape to fast track crucial infrastructure projects. While we’re at it, let’s revoke any legislation that requires consideration of project labor agreements.
Getting the private sector building again is the key to a real recovery, however. To jumpstart this vital component to the nation’s good health, we must create private-sector jobs and get money flowing by boosting demand for real estate, manufactured goods, services, travel, etc. Several steps can start us in the right direction:
• Knock down barriers to foreign trade, thereby reducing the cost of imported materials and opening overseas markets to American goods. This will create demand for manufacturing facilities, transportation centers, ports, etc.
• Free up the money supply by not raising taxes, returning retention monies withheld from contractors.
AGC’s “Building a Stronger Future” calls for several of these initiatives, and notes their many benefits: 1. An increase in construction activity will create many new jobs in communities large and small; 2. New construction will increase demand for manufactured goods while boosting global competitiveness. 3. Improved public infrastructure and private buildings will make U.S. businesses more competitive, more efficient and more successful, boosting employment, the economy and overall tax revenue.
The lead paragraph in many national news stories about the country’s economic trends are starting to paint much rosier pictures. But as we continue to read toward the point of the stories’ inverted pyramid, it becomes clear that those three words should appear in the lead.
Raymond James’ almost-giddy April 4-8 Market Commentary is a perfect example:
“Happy days are here again….The job market is now adding jobs at a pace stronger than population growth…. It’s been clear for some time that large-scale job losses are far behind us….Small and medium-size firms have begun to add jobs in recent months….”
The fact is the recession that ended for everyone else nearly two years ago continues to plague the construction industry. Employment rolls remain down; spending for building projects is slow. The construction industry stands at a seasonally adjusted 5,514,000 – about 29 percent lower than it was in April 2006. Just as sad, today’s construction workforce is identical to what it was six months ago. It has been left at the terminal while the rest of the economy takes off on a solid recovery.
The industry’s unemployment rate stands at 20 percent, more than double the overall rate.
“The ongoing drop in construction employment in March, combined with the news that construction spending hit an 11-year low in February, is doubly distressing,” said Ken Simonson, chief economist for the Associated General Contractors of America. “Despite a few signs of an upturn, the industry as a whole has yet to touch bottom five full years after the peak in employment and spending.”
Even the few bright spots for construction, as highlighted in economic reports, come with asterisks. Private commercial construction spending increased 0.9 percent in February, according to a report by the U.S. Census Bureau. That’s welcome news, concedes Anirban Basu, chief economist for the Associated Builders and Contractors. He says the report confirms the beginning of a transition period in the industry from public – especially stimulus package-generated – projects to more private building. But ABC notes the February uptick does little to offset the prolonged downturn. Private nonresidential construction spending is down 13.2 percent in the last 12 months. And total nonresidential construction spending – public and private – is down 6.3 percent for the trailing 12 months. Private building simply is not picking up the slack as federal, state and local government investment in construction dries up.
“As the impact of federal stimulus wanes, and the broader economy continues to recover at a respectable clip, the volume of privately financed construction is now edging higher,” Basu said. “However, for the time being, that slender growth is being more than offset by decreases in publicly financed construction. This pattern is likely to continue into the summer. Demand for privately financed construction will probably expand only gradually due to an excess supply of hotel rooms, office space, retail space and industrial space in many markets. In contrast, the recent decline of construction activity in segments heavily financed by state and local governments will likely continue on that path.”
A combination of intense public construction and policies to stimulate private construction are required to persuade owners hesitant to pull the string on new projects. Here are some suggestions. On the public front:
• Eliminate Davis Bacon on public construction projects thus giving local and state government more bang for their buck in this tight government receipts environment.
• Remove restrictions and limitations on public-private partnerships that would allow construction of optional toll roads and other projects which require little initial outlay of public money.
• Expedite approval processes, environmental impact reviews, licensing, inspections and other red tape to fast track crucial infrastructure projects. While we’re at it, let’s revoke any legislation that requires consideration of project labor agreements.
Getting the private sector building again is the key to a real recovery, however. To jumpstart this vital component to the nation’s good health, we must create private-sector jobs and get money flowing by boosting demand for real estate, manufactured goods, services, travel, etc. Several steps can start us in the right direction:
• Knock down barriers to foreign trade, thereby reducing the cost of imported materials and opening overseas markets to American goods. This will create demand for manufacturing facilities, transportation centers, ports, etc.
• Free up the money supply by not raising taxes, returning retention monies withheld from contractors.
AGC’s “Building a Stronger Future” calls for several of these initiatives, and notes their many benefits: 1. An increase in construction activity will create many new jobs in communities large and small; 2. New construction will increase demand for manufactured goods while boosting global competitiveness. 3. Improved public infrastructure and private buildings will make U.S. businesses more competitive, more efficient and more successful, boosting employment, the economy and overall tax revenue.
Labels: Commercial, Construction Industry, Industrial
Tuesday, April 5, 2011
When Will Commodity Prices Fall?
Contractors, especially those in the retail sector, have for months watched helplessly as building costs have escalated. A glut of resale homes and empty office space and American consumers’ bunker mentality on their purse strings as they wait out the economic siege have left contractors powerless to pass the creeping price increases along to consumers. Meanwhile, their wafer-thin profit margins get shaved even closer.
The culprit is commodity prices. In fact, residential construction costs have fallen significantly from their highs in September 2008, according to National Association of Home Builders Senior Economist Bernard Markstein. That crumb, tossed to builders by the recession as it gluttonously gobbled up job opportunities, sustained contractors throughout the worst of the downturn. Construction costs remain well below those 2008 levels, no thanks to lumber, steel, copper, and most of the other raw materials that go into houses, apartments, schools, and bagel shops. Still, “hard” construction costs represent almost 60 percent of a new home’s sticker price, up from 50 percent less than a decade ago. Markstein noted. Commodities are the blame for more than 100 percent of that increase. In fact, with slackened demand driving land costs lower, competition for a slice of the shrinking pie forcing commissions paid to realtors lower, and bare-bones operating budgets – including marketing – streamlining overhead costs, nearly every other component of a house’s selling price has plunged since 2002.
Profits have not been immune. Markstein says contractors earn less than 9 percent profit on their home sales today, compared with about 12 percent in 2002, as they absorbed the commodity price increases caused by soaring global demand, labor issues and natural and political events that limited supply, conservative development policy, speculation, and more.
The common and easy explanation for the inflationary nation of commodities is that China, Indonesia, India and other developing countries are sucking up the world’s steel and concrete as they modernize their infrastructure and their citizens develop more Western – read consumer-oriented – sensibilities. There is much truth to this analysis. But it only goes so far in explaining how construction commodities, especially those produced in the United States, have seen their prices rise in an environment of stagnated markets.
Investment advisors Goldman Sachs provides another part of the reason – one it identified in a report a year and a half ago in suggesting investors dive into the commodities market:
[T]he commodity problem is, at heart, a supply shortage due to decades of suboptimal investment, which has been exacerbated over the past year by the sharp drop in prices and tight credit conditions. As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the markets balanced.
This would point to price increases being temporary, as basic economic principle takes hold and quantity is regulated upward as dictated by the availability of excess profits. When mines, mills, factories, and farms believe demand for their products is sustainable, Markstein writes, they will reopen shuttered plants and increase their production capacities; prices will return to normal. Currently that confidence does not exist.
On the other hand, a recent Economist story points out disturbing evidence that the current commodity price cycle could last well into the next decade. The premise is that “the current surge in commodity prices, at a time of spare economic capacity in the rich world, suggests [e]ither the needs of the developing world are causing demand growth to outstrip supply for an extended period, or new sources of supply can be found only at higher cost. Both explanations add weight to the idea of a “commodity supercycle”, a long-term surge in prices that might last for 15-20 years.”
Still another reason for the confounding commodity inflation is Wall Street’s willingness to take Goldman Sach’s advice and play the market. The Federal Reserve Bank gave this investment strategy a boost late last year with its quantitative easement policy announced late last year. That effectively drove investors out of the bond market. Seeking alternatives, many planted their money in commodities. Increased demand = higher prices.
Anirban Basu, chief economist for the Associated Builders and Contractors, reports that all these causes are putting additional continuous pressure on contractors in their efforts to ride out the economic storm. “With the cost of construction rising in many instances, developers and others may choose to further delay construction starts. This, of course, represents bad news for an industry already associated with an unemployment rate above 20 percent and spending volumes that are nearly 25 percent below late-2008 levels. The hope is that speculators will not continue to pour money into commodities and that material prices will be better behaved in the months ahead,” Basu said.
Whether the current surge in commodity prices is temporary, caused by low production capacity or the beginning of a long-term “supercycle,” contractors who can adapt will be in positions of competitive advantage by finding viable material alternatives and using scarce resources more efficiently.
Contractors, especially those in the retail sector, have for months watched helplessly as building costs have escalated. A glut of resale homes and empty office space and American consumers’ bunker mentality on their purse strings as they wait out the economic siege have left contractors powerless to pass the creeping price increases along to consumers. Meanwhile, their wafer-thin profit margins get shaved even closer.
The culprit is commodity prices. In fact, residential construction costs have fallen significantly from their highs in September 2008, according to National Association of Home Builders Senior Economist Bernard Markstein. That crumb, tossed to builders by the recession as it gluttonously gobbled up job opportunities, sustained contractors throughout the worst of the downturn. Construction costs remain well below those 2008 levels, no thanks to lumber, steel, copper, and most of the other raw materials that go into houses, apartments, schools, and bagel shops. Still, “hard” construction costs represent almost 60 percent of a new home’s sticker price, up from 50 percent less than a decade ago. Markstein noted. Commodities are the blame for more than 100 percent of that increase. In fact, with slackened demand driving land costs lower, competition for a slice of the shrinking pie forcing commissions paid to realtors lower, and bare-bones operating budgets – including marketing – streamlining overhead costs, nearly every other component of a house’s selling price has plunged since 2002.
Profits have not been immune. Markstein says contractors earn less than 9 percent profit on their home sales today, compared with about 12 percent in 2002, as they absorbed the commodity price increases caused by soaring global demand, labor issues and natural and political events that limited supply, conservative development policy, speculation, and more.
The common and easy explanation for the inflationary nation of commodities is that China, Indonesia, India and other developing countries are sucking up the world’s steel and concrete as they modernize their infrastructure and their citizens develop more Western – read consumer-oriented – sensibilities. There is much truth to this analysis. But it only goes so far in explaining how construction commodities, especially those produced in the United States, have seen their prices rise in an environment of stagnated markets.
Investment advisors Goldman Sachs provides another part of the reason – one it identified in a report a year and a half ago in suggesting investors dive into the commodities market:
[T]he commodity problem is, at heart, a supply shortage due to decades of suboptimal investment, which has been exacerbated over the past year by the sharp drop in prices and tight credit conditions. As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the markets balanced.
This would point to price increases being temporary, as basic economic principle takes hold and quantity is regulated upward as dictated by the availability of excess profits. When mines, mills, factories, and farms believe demand for their products is sustainable, Markstein writes, they will reopen shuttered plants and increase their production capacities; prices will return to normal. Currently that confidence does not exist.
On the other hand, a recent Economist story points out disturbing evidence that the current commodity price cycle could last well into the next decade. The premise is that “the current surge in commodity prices, at a time of spare economic capacity in the rich world, suggests [e]ither the needs of the developing world are causing demand growth to outstrip supply for an extended period, or new sources of supply can be found only at higher cost. Both explanations add weight to the idea of a “commodity supercycle”, a long-term surge in prices that might last for 15-20 years.”
Still another reason for the confounding commodity inflation is Wall Street’s willingness to take Goldman Sach’s advice and play the market. The Federal Reserve Bank gave this investment strategy a boost late last year with its quantitative easement policy announced late last year. That effectively drove investors out of the bond market. Seeking alternatives, many planted their money in commodities. Increased demand = higher prices.
Anirban Basu, chief economist for the Associated Builders and Contractors, reports that all these causes are putting additional continuous pressure on contractors in their efforts to ride out the economic storm. “With the cost of construction rising in many instances, developers and others may choose to further delay construction starts. This, of course, represents bad news for an industry already associated with an unemployment rate above 20 percent and spending volumes that are nearly 25 percent below late-2008 levels. The hope is that speculators will not continue to pour money into commodities and that material prices will be better behaved in the months ahead,” Basu said.
Whether the current surge in commodity prices is temporary, caused by low production capacity or the beginning of a long-term “supercycle,” contractors who can adapt will be in positions of competitive advantage by finding viable material alternatives and using scarce resources more efficiently.
Labels: Commercial, Construction Industry, Industrial
Thursday, March 3, 2011
Opportunities Exist in Transmission Line Construction
Economic stagnation, national security concerns, geopolitics, national security and environmentalism make strange bedfellows, but all have come together to create perhaps the next big thing for America’s contractors. They’re all factors that make electrical transmission line construction one of the bright spots on an otherwise mediocre horizon. It’s a source of optimism for construction company owners and executives watching helplessly as private-sector projects are slowly getting back on the architects drawing boards and as craft workers keep filling the unemployment lines. Reinvigorated interest in environmental stewardship as well as a renewed desire for less dependence on foreign oil (along with an unreasonable fear of nuclear power, it seems) has catalyzed the movement for development of renewable fuel options.
Whether it’s photovoltaic collectors in the Nevada outback, wind farms covering the Texas plains, or geothermal power plants scattered throughout the West, 33 out of 50 states have some kind established “renewable portfolio standards” – policies that require electricity providers to secure a certain percentage of their power from renewable energy resources by a certain date. These standards have sent utilities scrambling to build generation facilities. Add to this talk of state renewable energy standards – which experts seem to think 12 to 20 percent is an achievable figure – and the country will need some 300 gigawatts of new renewable production capacity.
One limitation solar and wind power, at least, have in common, is that they must be placed in vast, open spaces in order to achieve the economies of scale required to make them economically feasible and to generate enough power to make a difference. By definition, however, these vast, open spaces are empty, far from much human activity – the kind of activity that will consume the electricity generated at these alternate-fuel production facilities.
That’s welcome news for contractors with the institutional knowledge and the field staff know-how to construct the infrastructure that will bring electricity from its remote generation facilities to the cities and other load centers that need it. Act now to take advantage of this blooming specialty within the construction field. For some contractors, it may be the only viable option. After all, non-building construction in December 2010 rose 29 percent, almost exclusively on the back of “exceptionally strong amount of new electric utility projects,” according to McGraw-Hill Construction, which calculated the sector’s growth at 227 percent.
Indeed, according the Associated General Contractors, “power-focused” public construction offered a bright spot, finishing with a seasonally adjusted annual rate of $95.7 billion, up 7 percent from the previous month and 6.3 percent higher on an annual basis, again, the result of “a mix of oil and gas-fired power plants, renewable power projects such as solar and wind generation, and transmission lines,” a trend it says will continue well beyond 2011.
Ah, the transmission line.
According to Martin W. Gross, president and chief executive officer of ABB Lummus Global Inc., “Transmission capacity for this new and mostly remote generation…does not exist. With an average construction schedule of 60 months to 72 months for a 500 [megawatt], 345 [kilovolt] transmission line, it could take well beyond 2025 to build the needed transmission lines.”
Can you say job security?
The Tres Amigas project slated to begin construction in 2012 in Clovis, N.M., near the border with the Texas Panhandle, is designed to link what Phillip G. Harris, the project’s chairman and chief executive officer and Jack McCall, director of high temperature superconductor transmission and distribution systems for American Superconductor, call America’s “balkanized” power grid. Their article in Mechanical Engineering Magazine notes that the Eastern, Western, and Texas interconnections are almost exclusively independent, with “only relatively small, bilateral [direct current] links…between any two interconnections—a mere 2,000 megawatts of combined power transfer. And the three interconnections have never been integrated.”
The Tres Amigas project aims to break the logjam along the country’s electrical stream, allowing utilities to purchase energy from both renewable and conventional sources through a power marketing hub capable of supporting 5,000 megawatts of power transfer capacity. This ability to transmit power in bulk is the key to overcoming the cost and efficiency handcuffs that are retarding the development of renewable energy generation. While many renewable power sources’ intermittent nature creates challenges for grid reliability, proven, readily-available and cost-effective transmission technologies exist to mitigate their impact, Gross contends. These include high voltage direct current (HVDC) transmission systems such as those scheduled for deployment at Tres Amigas, and flexible AC transmission systems (FACTS).
Tres Amigas is a year away from initiation of construction, but several other major projects are on line as well, mostly in California (the leader in renewable energy generation), Texas, Wyoming, Idaho, Montana, Nevada, and elsewhere in the West.
Economic stagnation, national security concerns, geopolitics, national security and environmentalism make strange bedfellows, but all have come together to create perhaps the next big thing for America’s contractors. They’re all factors that make electrical transmission line construction one of the bright spots on an otherwise mediocre horizon. It’s a source of optimism for construction company owners and executives watching helplessly as private-sector projects are slowly getting back on the architects drawing boards and as craft workers keep filling the unemployment lines. Reinvigorated interest in environmental stewardship as well as a renewed desire for less dependence on foreign oil (along with an unreasonable fear of nuclear power, it seems) has catalyzed the movement for development of renewable fuel options.
Whether it’s photovoltaic collectors in the Nevada outback, wind farms covering the Texas plains, or geothermal power plants scattered throughout the West, 33 out of 50 states have some kind established “renewable portfolio standards” – policies that require electricity providers to secure a certain percentage of their power from renewable energy resources by a certain date. These standards have sent utilities scrambling to build generation facilities. Add to this talk of state renewable energy standards – which experts seem to think 12 to 20 percent is an achievable figure – and the country will need some 300 gigawatts of new renewable production capacity.
One limitation solar and wind power, at least, have in common, is that they must be placed in vast, open spaces in order to achieve the economies of scale required to make them economically feasible and to generate enough power to make a difference. By definition, however, these vast, open spaces are empty, far from much human activity – the kind of activity that will consume the electricity generated at these alternate-fuel production facilities.
That’s welcome news for contractors with the institutional knowledge and the field staff know-how to construct the infrastructure that will bring electricity from its remote generation facilities to the cities and other load centers that need it. Act now to take advantage of this blooming specialty within the construction field. For some contractors, it may be the only viable option. After all, non-building construction in December 2010 rose 29 percent, almost exclusively on the back of “exceptionally strong amount of new electric utility projects,” according to McGraw-Hill Construction, which calculated the sector’s growth at 227 percent.
Indeed, according the Associated General Contractors, “power-focused” public construction offered a bright spot, finishing with a seasonally adjusted annual rate of $95.7 billion, up 7 percent from the previous month and 6.3 percent higher on an annual basis, again, the result of “a mix of oil and gas-fired power plants, renewable power projects such as solar and wind generation, and transmission lines,” a trend it says will continue well beyond 2011.
Ah, the transmission line.
According to Martin W. Gross, president and chief executive officer of ABB Lummus Global Inc., “Transmission capacity for this new and mostly remote generation…does not exist. With an average construction schedule of 60 months to 72 months for a 500 [megawatt], 345 [kilovolt] transmission line, it could take well beyond 2025 to build the needed transmission lines.”
Can you say job security?
The Tres Amigas project slated to begin construction in 2012 in Clovis, N.M., near the border with the Texas Panhandle, is designed to link what Phillip G. Harris, the project’s chairman and chief executive officer and Jack McCall, director of high temperature superconductor transmission and distribution systems for American Superconductor, call America’s “balkanized” power grid. Their article in Mechanical Engineering Magazine notes that the Eastern, Western, and Texas interconnections are almost exclusively independent, with “only relatively small, bilateral [direct current] links…between any two interconnections—a mere 2,000 megawatts of combined power transfer. And the three interconnections have never been integrated.”
The Tres Amigas project aims to break the logjam along the country’s electrical stream, allowing utilities to purchase energy from both renewable and conventional sources through a power marketing hub capable of supporting 5,000 megawatts of power transfer capacity. This ability to transmit power in bulk is the key to overcoming the cost and efficiency handcuffs that are retarding the development of renewable energy generation. While many renewable power sources’ intermittent nature creates challenges for grid reliability, proven, readily-available and cost-effective transmission technologies exist to mitigate their impact, Gross contends. These include high voltage direct current (HVDC) transmission systems such as those scheduled for deployment at Tres Amigas, and flexible AC transmission systems (FACTS).
Tres Amigas is a year away from initiation of construction, but several other major projects are on line as well, mostly in California (the leader in renewable energy generation), Texas, Wyoming, Idaho, Montana, Nevada, and elsewhere in the West.
Labels: Commercial, Construction Industry, Energy, Industrial
Friday, February 4, 2011
Personal Protective Equipment
Workers and management don’t always see eye to eye on every issue, but the importance of proper and properly used safety equipment is universally acknowledged. Still, confusion can arise when it comes to determining exactly what constitutes proper equipment, when it must be used, and whose job it is to determine these guidelines. The following suggestions will go a long way toward ensuring no safety considerations fall through the cracks because someone though someone else was taking care of it.
The person in charge of safety on the jobsite, whether a safety director or manager in a large construction company or the designated safety person, should develop, implement, and administer the firm’s site-specific safety standards, including the personal protective equipment policies. A big part of this responsibility involves assessing the jobsite and cataloging the potential safety hazards in order to choose the safety equipment that will mitigate the hazards. Working with supervisors and the project manager, the safety person should walk the jobsite prior to construction, the first day on the job, and at intervals throughout the project, especially when a new construction phase begins, new equipment is put into use, or an accident or near miss occurs.
The safety person then should evaluate the hazards identified in the walkthroughs to fully understand the risk in order to consider the types of PPE that are available to deal with them, and the pros and cons of each option. It’s this person’s responsibility also to ensure his or her choice is effective, made for the specific hazard and working conditions, and, of course, OSHA approved.
Once she has obtained the correct equipment, the safety person will inform the specific employees who will be required to use it, instruct them on the proper usage, fitting, maintenance and reasons for its use.
Supervisors, in addition to assisting the designated safety person with the hazard-assessment walkthrough must ensure the appropriate PPE is available on site and employees are fully trained in its use. This should include much more than “eyeballing” a worker as he dons his safety equipment and giving a thumb’s up, “good to go” approval. Formal training is required, and it must be documented. Each person who receives training should sign a company form to that effect, to be collected and filed by the safety professional. As the ranking company employee at the jobsite daily, the supervisor also must serve as a liaison with the safety professional, ensuring he knows when new hazards are created on or brought to the site, when safety equipment must be replaced or supplemented and enforcing PPE usage policies and all safety procedures.
Though they’re the ones with the most to lose, employees are not always the most conscientious when it comes to safety and use of PPE, especially when they’re performing tasks that have become mundane and routine. Because of this tendency toward complacency toward, even contempt for, safety, construction companies should adopt a zero tolerance toward blatant disregard for PPE. But even the threat of disciplinary action, comprehensive training, and the constant drilling into their heads on the possible tragic consequences of disregarding safety equipment may not be enough to ensure compliance with company policy.
Foremen, Supervisors, and managers must insist employees adhere to the policies, which should be in writing. PPE policies should demand employees wear PPE when required and in the proper manner; attend mandatory sessions to learn when, where, and how the equipment should be used; Maintain and clean equipment as necessary, and inform supervisors when equipment is in need of replacement. Incidentally, it’s a good policy for the employer to supply all safety equipment to ensure it complies with OSHA regulations. Only doctor-ordered equipment should be supplied by the worker, and the employer’s equipment should be housed in the company office or in locked storage facilities at the jobsite.
By including penalties for failure to comply with proper PPE use, contractors deliver the message that they consider safe work practices a prerequisite for employment. A serious accident can devastate a family, but it also can ruin a business. Owners and CEOs owe it to themselves to insist their workers abide by the safety policy. Enforcement often requires both the carrot and the stick. Companies can host outings or lunches for crews who maintain safe standards, but they also must punish workers who thumb their noses at safety policies. A reasonable disciplinary policy might include:
1. An oral reprimand delivered by a company supervisor as soon as the violation is discovered, for a first offense.
2. A formal, written reprimand to be included in the employee’s personnel folder, for a second violation.
3. Time off or termination in the event of a third serious violation.
Remember that PPE is considered safety’s last resort. Other jobsite measures should be used whenever possible to mitigate risks. PPE only protects the person wearing it; measures controlling the risk at source protect everyone in the workplace.
Workers and management don’t always see eye to eye on every issue, but the importance of proper and properly used safety equipment is universally acknowledged. Still, confusion can arise when it comes to determining exactly what constitutes proper equipment, when it must be used, and whose job it is to determine these guidelines. The following suggestions will go a long way toward ensuring no safety considerations fall through the cracks because someone though someone else was taking care of it.
The person in charge of safety on the jobsite, whether a safety director or manager in a large construction company or the designated safety person, should develop, implement, and administer the firm’s site-specific safety standards, including the personal protective equipment policies. A big part of this responsibility involves assessing the jobsite and cataloging the potential safety hazards in order to choose the safety equipment that will mitigate the hazards. Working with supervisors and the project manager, the safety person should walk the jobsite prior to construction, the first day on the job, and at intervals throughout the project, especially when a new construction phase begins, new equipment is put into use, or an accident or near miss occurs.
The safety person then should evaluate the hazards identified in the walkthroughs to fully understand the risk in order to consider the types of PPE that are available to deal with them, and the pros and cons of each option. It’s this person’s responsibility also to ensure his or her choice is effective, made for the specific hazard and working conditions, and, of course, OSHA approved.
Once she has obtained the correct equipment, the safety person will inform the specific employees who will be required to use it, instruct them on the proper usage, fitting, maintenance and reasons for its use.
Supervisors, in addition to assisting the designated safety person with the hazard-assessment walkthrough must ensure the appropriate PPE is available on site and employees are fully trained in its use. This should include much more than “eyeballing” a worker as he dons his safety equipment and giving a thumb’s up, “good to go” approval. Formal training is required, and it must be documented. Each person who receives training should sign a company form to that effect, to be collected and filed by the safety professional. As the ranking company employee at the jobsite daily, the supervisor also must serve as a liaison with the safety professional, ensuring he knows when new hazards are created on or brought to the site, when safety equipment must be replaced or supplemented and enforcing PPE usage policies and all safety procedures.
Though they’re the ones with the most to lose, employees are not always the most conscientious when it comes to safety and use of PPE, especially when they’re performing tasks that have become mundane and routine. Because of this tendency toward complacency toward, even contempt for, safety, construction companies should adopt a zero tolerance toward blatant disregard for PPE. But even the threat of disciplinary action, comprehensive training, and the constant drilling into their heads on the possible tragic consequences of disregarding safety equipment may not be enough to ensure compliance with company policy.
Foremen, Supervisors, and managers must insist employees adhere to the policies, which should be in writing. PPE policies should demand employees wear PPE when required and in the proper manner; attend mandatory sessions to learn when, where, and how the equipment should be used; Maintain and clean equipment as necessary, and inform supervisors when equipment is in need of replacement. Incidentally, it’s a good policy for the employer to supply all safety equipment to ensure it complies with OSHA regulations. Only doctor-ordered equipment should be supplied by the worker, and the employer’s equipment should be housed in the company office or in locked storage facilities at the jobsite.
By including penalties for failure to comply with proper PPE use, contractors deliver the message that they consider safe work practices a prerequisite for employment. A serious accident can devastate a family, but it also can ruin a business. Owners and CEOs owe it to themselves to insist their workers abide by the safety policy. Enforcement often requires both the carrot and the stick. Companies can host outings or lunches for crews who maintain safe standards, but they also must punish workers who thumb their noses at safety policies. A reasonable disciplinary policy might include:
1. An oral reprimand delivered by a company supervisor as soon as the violation is discovered, for a first offense.
2. A formal, written reprimand to be included in the employee’s personnel folder, for a second violation.
3. Time off or termination in the event of a third serious violation.
Remember that PPE is considered safety’s last resort. Other jobsite measures should be used whenever possible to mitigate risks. PPE only protects the person wearing it; measures controlling the risk at source protect everyone in the workplace.
Labels: Commercial, Construction Industry, Industrial