The Impact of Rising Material Costs on Commercial Construction

November 1st, 2022 Posted by Uncategorized No Comment yet

With inflation reaching a forty-year high in recent months, everyone is now acutely aware of rising costs.

The consumer price index, which measures changes in the cost of food, housing, gasoline, utilities, and other goods, increased by 8.2% in the 12 months from September 2021 through August 2022.

The latest data from the Bureau of Labor Statistics (BLS) shows energy prices increased by 19.8% and gasoline by 18.2% over the last year.

Non-Residential Construction Material Costs

Rising costs in an inflationary period are not just impacting consumers. Global property services giant, CBRE(formerly REI Limited and CB Richard Ellis) forecasts a 14.1 percent year-over-year increase in U.S. construction costs by the end of this year due to the combination of labor shortages, inflation, supply chain disruptions, ongoing pandemic reverberations, and the war in Ukraine.

Let’s take a brief snapshot look at the last twelve-month increases in material costs according to the Producer Price Index from the Associated Builders and Contractors:

*Fabricated Structural Metal Products up 17.7%

*Softwood Lumber up 14.8%

*Concrete Products up 14.3%

*Prepared Asphalt, Tar, Roofing & Siding Products up 15.2%

*Nonferrous wire and cable up 6.1%

*Crude Petroleum up 38.8%

*Natural Gas up 118%

*Iron and Steel down 5.7%

*Steel Mill Products down 4.6%

The Impact

Deliveries of construction materials and equipment were disrupted not only due to severe labor shortages in factories but also shipping facility limitations. While some products were being manufactured, often they were waiting to be shipped for months at a time.

With such low resources and high requirements, construction material cost dramatically increased. Construction companies are reporting 10% to 30% increases in material costs from the time the bid is accepted to the time material orders are placed.

While many contractors may be considering passing on the material cost increases to project owners, they will likely find them resistant to the elevated charges due to increased borrowing costs and mounting recession concerns.

But it isn’t just the price of materials that is impacted; the lack of construction products also creates long waits for them to arrive and become available. These delays significantly affect contractors’ ability to meet their deadlines and complete a project as planned.

The increased costs of construction materials can greatly impact the construction industry, whether material price volatility is caused by an increase in demand for specific construction materials or supply chain disruptions are the culprit.

Be Proactive

While companies should always be proactive it is even more important to do so in an ever-changing economy. To prepare for rising inflation, companies should:

  • Analyze their market position and identify what prices should increase to align with competitors’ pricing.
  • Scrutinize product and service offerings to ascertain the highest cost increases with the lowest revenue potential and margins.
  • Minimize supply chain risk by diversifying orders based on the import source.
  • Research and detect products that have long lead times and strategize best practices to prevent products from being unavailable.

CREED LA is a non-profit coalition of labor organizations concerned about sustainable development in Southern California that comply with state and local laws. For more information on how LA Creed is having a positive impact on your community visit https://creedla.com.

Construction & Robotics

October 1st, 2022 Posted by Uncategorized No Comment yet

While robots will never eliminate the need for human workers in the construction industry, many robot applications can be used to make work on the construction site quicker, safer, easier, more stress-free, and less labor demanding. By utilizing robots to handle more repetitive jobs, such as bricklaying, hanging drywall, and moving heavy materials, construction firms can reduce the quantity of labor they need for a project. Since robots can typically complete their jobs faster than their human counterparts, work gets done quickly and with fewer errors.

Five Ways Robots are Helping Construction Companies

Addressing the Labor Shortage

The National Center for Construction Education & Research, reports that “41% of construction workers on the job today are planning to retire by 2031.” What makes matters even worse is that fewer younger individuals are pursuing careers in the trades. “The construction industry will need to attract nearly 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor,” according to a model developed by Associated Builders and Contractors. It is also important to note that autonomous robots don’t require breaks, don’t get a paycheck, don’t require worker’s compensation, and can work continuously overnight.

Cost Savings

Since most construction companies are already operating with razor-thin margins, every opportunity to lower costs makes a big difference to the bottom line. While autonomous robots do require ongoing maintenance, the amount of work they can produce compared to the recurring costs balances out on the plus side.

Improving Worker Safety

According to the U.S. Bureau of Labor Statistics, 21% of all workplace deaths in 2018 occurred in the construction industry. Repetitive motions put stress on the human body. Conversely, robots can make the same motion 24 hours a day. Many of the applications of construction firms deploying autonomous machinery are focused on these types of tasks, conserving their human labor for jobs that require more finesse and thinking.

Flexibility

Any disruption in a construction company’s worker availability can create a chain reaction that throws off an entire project schedule. Using automated robots to complement their workforce allows companies greater flexibility.

Efficiency Improvements

Some tasks in construction work traditionally require multiple human workers tied to assigned tasks until a given stage of the project is complete. A good example of this is the use of drones with a single human operator performing survey work.

A Few Real World Examples

TheBricklayingSAMSystemeliminates strenuous work by lifting the brick, applying mortar, and placing each brick in place. The mason is accountable for ensuring accurate placement of the bricks, cleaning up the surplus mortar, and overseeing the overall project is completed properly.

Canvas, a company that builds robots using artificial intelligence, has developed a four-wheeled robot the size of a kitchen stove that scans the unfinished walls of a construction site using lidar, then gets to work smoothing the surface before applying a near-perfect layer of drywall compound. The device was employed in the new Harvey Milk Terminal at San Francisco International Airport and an office building connected to the Chase Center arena in San Francisco.

Komatsuuses San Francisco-based Skycatch drones to survey job sites from the air and then upload images to computers to create 3D models of the terrain.

TheArroyoBridgeis a perfect example of what is possible. The innovative 80-foot pedestrian bridge perched over a ravine in the mountains of Los Angeles was designed by architecture students at the University of Southern California with 3D software and was fabricated out of hundreds of recycled steel parts by an advanced six-axis robotic arm.

Again, robots will never eliminate the need for human workers in the construction industry, but there are many applications robots can be used for!

Smart Cities

September 1st, 2022 Posted by Uncategorized No Comment yet

Wikipedia defines a Smart City “as a technologically modern urban area that uses different types of electronic methods and sensors to collect specific data. The information gained from that data is used to manage assets, resources, and services efficiently; in return, that data is used to improve operations across the city.”

What Makes a Smart City?

Empowering Technology
The fast-tracked development of new technologies including 5G, AI, cloud, and edge computing is helping to drive the evolution of Smart Cities.

Decarbonizing Building and Construction
The Paris agreement, an international treaty on climate change, adopted in 2015, requires all buildings to be net-zero carbon by 2050. Today, commercial buildings account for 20% of energy use in the US, 30% of which is wasted. Smart solutions can convert them into energy-efficient and sustainable buildings while automating the way they are managed.

Energy Efficiency
Transitioning to lower carbon energy systems is a priority. Analysts at Barclays Investment Bank expect to see significant financing in smart grids, next-generation energy transmission, and distribution networks that can automatically monitor energy flows and adjust to changes in supply and demand accordingly.

Other systems expected to drive the adoption of low-carbon energy will include smart meters, which allow utility companies to introduce price differentiation, microgrids for local sources of energy, and encourage lower consumer usage

Smart Water and Waste Management
Digital water technologies will innovate and drive new solutions in the water and wastewater industries. That’s according to an IDTechEx report titled “Digital Water Networks 2020-2030.”

Data provided by smart water meters will deliver real-time consumption patterns. Water demand response will be faster and thus help with pressure regulation throughout the network. In addition, sensors can measure a wide range of chemicals and pollution in real-time.

Smart Cities
Internationally Singapore, Zurich, Oslo, London, and Copenhagen topped the list of the world’s smartest cities on the 2021 Smart City Index. U.S. entries include New York, Boulder, Pittsburgh, San Francisco, Fresno, Cedar Rapids, Austin, and Louisville.

One example is found In Fresno’s CitiStat model to share and track data and improve transportation through an adaptive intelligent transportation system. Another is San Francisco’s many “green” initiatives for its smart parking system. On Austin’s dedicated smart city page on the website, they describe their transportation plans, which involve automated and connected vehicles, intelligent sensors, open data, and real-time traveler information. Fighting a decreasing population, the city of Pittsburgh has proposals in place for reinventing its infrastructure. They have developed MOVEPGH, their transportation improvement plan, which will make the city more bike and pedestrian friendly. The steel city also plans to rejuvenate the Almono steel site with a microgrid of solar and geothermal energy and render the city greener with LED streetlights and electric vehicle charging stations.”

Construction Safety

August 1st, 2022 Posted by Uncategorized No Comment yet

Construction is one of the most dangerous professions. The Occupational Safety and Health Administration (OSHA) reports that one in ten construction site workers are injured yearly.

Mitigate Safety Hazards

Employers and construction workers need to work together to mitigate safety hazards. This requires:

  • Awareness– Ensuring the safety of the construction workers and everyone on the site should be the number one priority of any construction manager. Understanding the perils of a construction site and sustaining a perpetual state of alertness is perhaps the number-one best way to prevent accidents.
  • Training– The Occupational Safety and Health Administration (OSHA) and other organizations publish resources to help businesses train new laborers on standard safety and security practices, including pamphlets, guides, training videos, and even on-site training.
  • Communication– Construction firms should equip workers with devices, like smartphones, walkie-talkies, or headsets, which allow fast and efficient communication among team members.
  • ProperEquipment– Not only should each piece of equipment on the job site be ideally suited to the task at hand, but construction firms need to ensure that all machinery and material are properly maintained.
  • ProperSupervision– Every construction site must have a strong supervisor who is willing and capable of enforcing safety standards with no exceptions. This construction supervisor must keep track of all site employees throughout the day and immediately correct those who fail to commit to proper construction site safety procedures.

OSHA’s Most Frequently Cited Standards in Construction

  • Electrical (wiring methods, design, and protection) – Check all electrical tools and equipment regularly for defects.
  • Excavations– Use a protective system for trenches of one foot deep or greater. A worker should never enter a trench that is unprotected.
  • Fall Protection – Consider using aerial lifts to provide safer working surfaces for elevated platforms.
  • GeneralSafetyandHealthProvisions– Construction workers should wear work boots with slip-resistant and puncture-resistant soles.
  • Hazard Communication – Make information accessible to employees at all times in multiple languages and formats.
  • Hazardous Substances — Use an effective employee training program for handling hazardous substances.
  • Head Protection – Use hard hats, safety nets, and body harnesses at all times.
  • Ladders – Avoid ladders with metal components near electrical work and power lines.
  • Scaffolding – Fall hazards can occur when scaffolds are not deployed properly.

The best way to reduce the number of construction accidents is to keep workers aware of safety issues, train them on safety, communicate safety plans, and continuously discuss innovative ways to improve safety. In addition to these steps, workers must be provided with the right equipment and proper supervision.

For more information on how LA Creed is having a positive impact on mitigating construction safety hazards in your community visit https://creedla.com.

Building Renovations: Compliance with Seismic and Fire Ordinances

July 1st, 2022 Posted by Uncategorized No Comment yet

Property owners in California are more susceptible to earthquakes and fire. California is second only to Alaska in experiencing the most earthquakes. In 1971 an earthquake hit the San Fernando Valley, just north of Los Angeles. The earthquake registered a 6.4 on the Richter scale, had a seismic moment of 6.7, and did tremendous damage to the area. Fifty-eight people were killed and an additional 2,543 suffered injuries. Two hospitals were destroyed, along with four freeways and overpasses which collapsed.

In addition, the LA Times reported on May 16, 2022, that in California, more than 4.6 million properties
— about 41% — have a .03% or greater chance of being involved in a wildfire this year.

Seismic Ordinances
Additional earthquake events over the next two decades led to the passage of tougher building code standards in California in 1981 including the required retrofitting of more than 8,000 unreinforced masonry buildings or “Soft Story” buildings with the highest collapse probability. Most cities have now identified which older buildings in their jurisdiction that are the most vulnerable to earthquakes, and these properties typically are subject to compulsory retrofitting.
The new code requirements compel buildings to adequately be able to resist two forces of nature:

  • Vertical Forces (gravity) – a building’s self-weight and the weight of its contents.
  • Horizontal Forces (lateral) – wind and earthquake.

Many buildings constructed before 1981 have a built-in structural weakness called “Soft Story”. A Soft Story (those having large wall openings on the ground floor including storefronts, windows, and garage doors) has less than 80% of the horizontal strength of the story above.

The impact of the improvements to building code became evident in the 1994 Northridge Quake. Los Angeles city officials reported over 200,000 people were living in retrofitted brick buildings when the Northridge Quake hit. No deaths or injuries occurred in more than 37,000 units in 1,300 retrofitted buildings. The structures that were built or enhanced under the new, stricter code experienced limited damage, while those structures not retrofitted suffered more considerable damage.

Fire Ordinances
The California Fire Code (CFC) details regulations consistent with nationally recognized and accepted practices for safeguarding life and property from the hazards of Fire and explosion. Dangerous conditions often arise from the storage, handling, and use of hazardous materials and devices. The most frequent code violations are:

  • The use of Extension cords
  • Blocked exits or fire doors
  • Missing Exit signs and faulty lighting
  • Improper storage
  • Blocked valves or exterior access points
  • Incorrect sprinkler system
  • Missing, uncharged, or uninspected fire extinguishers issues
  • Broken smoke detectors
  • Fire alarms or pull stations not working
  • Hanging items from sprinkler heads or pipes
  • Improper records

For more information on how Creed LA is having a positive impact on your community visit https://creedla.com.

LA 6th Street Viaduct Bridge Project June 2022

June 1st, 2022 Posted by Uncategorized No Comment yet

What Is the 6th Street Viaduct Bridge Project?

The Sixth Street Viaduct has long served as a vital connection between the arts district on the west side of the Los Angeles River and the historic neighborhood of Boyle Heights on the east side. The original bridge built in 1932 spanned nearly 3,500 feet across the river and was often used to represent Los Angeles’s more gritty side in countless movies, music videos, and TV commercials, including riverbed car chases. Unfortunately, due to seismic vulnerability and a rare chemical reaction in the cement supports, it was determined that the original Sixth Street Viaduct needed to be replaced.

Construction for the new $588 million viaduct began in 2015 following the demolition of the original. The design of the new replacement bridge, known as “The Ribbon of Light,” was created by HNTB and Los Angeles architect Michael Maltzan. The new span that crosses the 101 Freeway and Los Angeles River will feature 10 lighted sets of arches forming a “Ribbon of Light” along the viaduct. Construction is led by contractors Skanska Stacy and Witbeck. The design was selected by the Bureau of Engineering through an international design competition.

When Will the New Bridge Be Completed?

The 7-year project has created hundreds of jobs, adding to the economy of central Los Angeles and its neighbors. The new viaduct is expected to be completed in the Summer of 2022. It stretches across 18 sets of railroad tracks and will feature a new 12-acre park underneath the structure with access to the river and shoulder lanes in both directions for bicycles. Hargreaves Associates designed the new park space.

For more information on how Creed LA is having a positive impact on your community visit https://creedla.com.

Exploring Construction Management Software

May 1st, 2022 Posted by Uncategorized No Comment yet

Construction Management Software is designed to control a project’s cost, schedule, and quality. The main benefits are improved accountability, financial visibility, and improved collaboration.
We recognize there are dozens of viable solutions available, and it would be too big an undertaking to attempt to highlight them all here. We have therefore selected five popular solutions as a place to begin your due diligence.

Software Options & Features
BuilderTrend includes an integral customer relationship management (CRM) system, bid requests, and project proposals. Project management tools include scheduling, budgeting, and timesheets while customer management tools include change order and selection management, warranty requests, and payment processing. This software also exports to solutions such as QuickBooks and Xero.

Houzz Pro’s key features include project management, as well as lead management with client dashboards. In addition, the solution includes an integrated online payment system, mood boards for projects, and white labeling for communications. The software provides construction professionals the tools to manage clients and track progress for any project, from estimation to execution.

CoConstruct is a construction project management software that offers custom home builders and remodelers a set of tools for managing projects, financials, and clients. It allows users to synchronize data from estimates, specifications, selections, bids, change orders, and budgets with QuickBooks on their desktop or online. Builders can also manage their projects in the field using the mobile app.

Striven is a cloud-based enterprise resource planning (ERP) solution with features for accounting, inventory management, human resources, customer relationship management (CRM), and project management. The solution also contains business management tools including a company hub, calendar integration, an internal newsfeed with social media integration, dynamic feedback tools, external action triggers, dashboard customization, a resource navigator, and custom reporting. It also has tools for field service management, surveying, business analytics, and supports integrations with Google, Microsoft, Authorize.Net, Yodlee, and ShipStation.

Contractor Foreman is the most affordable all-in-one solution for small and medium trade and general contractors starting at $49 a month for the entire company. Rated as a Top App and Best Value, it easily integrates with QuickBooks. You can use it on the phone, tablet, or computer. The solution integrates timecards, estimates, online payments, daily Logs, and scheduling.

Final Thoughts
No matter which software solution you choose, you will want to ensure the solution can integrate and transfer data between four critical applications:

  • Takeoff is a pre-sale process in which the estimator measures construction plans to determine the number of materials and labor required for a job.
  • Estimating used to calculate the costs for the material and labor takeoff, and then produce detailed bid proposals from those estimates.
  • Bid management used by a contractor to solicit bids from subcontractors and suppliers before submitting a job quote to a building owner.
  • Accounting helps firms manage their job costing, core accounting, fixed asset accounting, and payroll.

For more information on how LA Creed is having a positive impact on the construction community visit https://creedla.com.

What is Green Construction?

April 1st, 2022 Posted by Uncategorized No Comment yet

Green construction is defined as both a structure and the application of processes that are environmentally responsible and resource-efficient throughout a building’s life cycle: from planning to design, construction, operation, maintenance, renovation, and demolition.

The seven essential components of Green Construction include:

  • Energy Efficiency and Renewable Energy
  • Water Efficiency
  • Environmentally Preferable Building Materials and Specifications
  • Waste Reduction
  • Toxics Reduction
  • Indoor Air Quality
  • Smart Growth and Sustainable Development

There are several ongoing 2022 projects with positive and significant environmental impacts:

The Grand

This mixed-use development spans three city blocks and employs a broad range of professionals to construct shopping, eating, and entertainment venues including a grocery store, a 20-story hotel, and a 39-story apartment building.

The Grand meets LEED-Silver certification or higher for implementing practical and measurable green building strategies. The Grand’s commitment to sustainability includes transit-oriented development and density; outdoor water reduction; optimal energy performance that achieves more than 20% energy savings; green materials selection; indoor environmental quality, as well and provisions for more than 75 EV charging stations.

West Edge

The West Edge project includes space for retail, dining, and fitness options, in addition to luxury apartments, landscaped terraces, and 200,000 square feet of office space on under half an acre. In the interest of furthering a car-free lifestyle, the West Edge is located next to public transit. The office building is registered to be LEED and WireScore Certified and is pursuing WELL Core & Shell Certification.

WELL Core and Shell Certified projects integrate fundamental WELL Building StandardTM (WELL) features into the base building design and operation.

The Metro Purple Extension

This massive transit project plans to open various sections in 2023, 2025, and 2027. According to LA Metro, this multibillion-dollar project is more complex than anything LA Metro Rail has constructed in its history due to the challenges of dense urban neighborhoods and extreme geological conditions. As one of LA’s busiest areas, the Westside is the region’s second-largest job center. The Metro Purple (D Line) Extension Transit Project, is nearer to connecting busy areas and improving travel for everyone who lives, works, and plays in LA County.

On-site compliance monitoring of construction activities during the day, night, and weekend work hours has taken place continuously throughout construction to monitor noise, work hours, traffic control, pedestrian access, and haul routes. Monitors filed regular daily reports and issued violations to assist contractors in avoiding non-compliance issues. Environmental compliance monitoring has helped to minimize impacts and ensure mitigation measures have been upheld throughout the project’s construction phase.

For more information on how Creed LA is having a positive impact on your community, visit https://creedla.com

Remote Worksites

March 1st, 2022 Posted by Uncategorized No Comment yet

While construction is a sector most people don’t associate with remote work, companies that adapt and thrive in this new home-based work environment will not only be successful today, but will have prepared their workforces for the better.

The construction industry is a late start to the application of remote work, but it is finding creative tools to allow many of the tasks traditionally done on-site in construction projects to be done remotely. Many of these new approaches do more than find the efficiency and cost reductions of remote work but offer increased value.

The most dramatic change is the use of remote imaging to replace onsite visits and to document everything from construction progress, to working conditions, to schedule, to safety practices.
The use of 360-degree cameras and drones allows virtual replicas of worksites to be tracked through time allowing management and inspection from remote locations. Digital recording with 360-degree images to create digital replicas of the job site can enable project managers, inspectors, and clients to digitally tour a job and track the progress of a construction project without having to visit the site.

Not only does digital recording allow remote observation; it can track and document progress over time and identify areas of delay.

It offers documented proof of completed work, including in concealed spaces, and can expedite the payment process. It also allows collaboration in project review among parties involved in the project who may be a great distance from the project. At the simplest level, it documents work completed and expedites payment processing. At its most elegant it provides multi-project management of human and equipment resources for substantial gains in efficiency. One survey reported that 44% of respondents ranked better site capture through 360° images, 3D laser scanning, and other tools as the most impactful trend in construction technology in 2021.

Construction management tools have emerged to allow remote functioning. Online, real-time communication tools allow project managers to hold virtual on-site meetings with workers and resolve issues as they arise. Real-time virtual meetings can include an array of those involved in a project without regard to their location or travel time to the site. Advanced project management software assures that team members are making decisions based on the same data and integrates automated site reports with plans and project schedules to anticipate and avoid delays. It allows communication between administration functions and on-site workers for inventory management, accounting, and payroll. Digital time tracking is both more effective and less intrusive.

While 360-degree cameras and drones have created remote work opportunities for project managers, inspectors, and others, the actual construction work is enhanced by a dramatic increase in modular construction. It offers a significant improvement in construction schedules. According to the Modular Building Institute, 35% of construction timelines are reduced by more than a month. There is a major reduction in construction waste and a 65% reduction in total project costs. The use of prefab components in building achieves efficient, high-quality construction along with greater worker safety. Modular construction offers a stable work location for many construction workers and saves on the travel to distant and changing work sites.

Using remote work site approaches the construction industry can become more attractive to young people choosing a career in offering stable, safe, technology-driven jobs with salaries fueled to match the required increases in technical skills and knowledge. Remote work is the wave of the future, and the construction industry is on the way forward.

Construction and Supply Chain Shortages

February 1st, 2022 Posted by Uncategorized No Comment yet

As we enter 2022, it’s clear that the California construction industry continues to face pandemic recovery challenges due to a confluence of rising material costs, worker shortages, and supply chain disruptions. In a recent NAHB study, an astonishing 87% of respondents reported a shortage of windows and doors while 90% reported a shortage of plywood. These material shortages, among others, inevitably lead to delayed projects and increased costs.

Worker Shortage

As we have previously reported, California construction has suffered and continues to suffer a worker shortage due to multiple aspects of Covid-19. However, it’s not only the construction industry that has been affected. The worker shortage has cut a broad swath through the rest of the economy contributing to supply chain disruption. Manufacturing plants, in general, have been operating with fewer employees and sometimes shorter hours, reducing production. Freight trucking companies have reported a shortage of qualified drivers, an increase in fuel prices, and at times a lack of working vehicles, forcing them to lease trucks to make deliveries – resulting in higher costs and fewer supply shipments.

Rising Costs

Material scarcity due to disruption in the supply system has fostered sometimes astronomical cost increases in a wide range of construction materials. Lumber and steel prices, for example, are at the highest level in years, although steel is still cheaper than lumber. Between April and August 2020, lumber prices shot up by about 130%. The increase is significant for builders as well as home buyers, as framing lumber comprises approximately 20% of the material cost of home construction.
Unfortunately, the lumber supply has been affected by more than Covid-related disruptions. About 83% of our imported lumber comes from British Columbia which has been severely impacted by proliferating pine beetles as well as torrential rains and flooding in 2021. As of November, weekly lumber shipments from Vancouver had fallen by at least 30%, adding to the ‘scarcity cost.’
Other notable increases in building supplies include steadily rising prices for gypsum and concrete. Semi-conductors have been unavailable, resulting in a shortage of appliances.

Alternate Materials

To minimize project delays, builders are sourcing alternate materials. Substitutions for everything from pipes to wood paneling can increase costs and complicate construction, which may still be a better option than delaying a project waiting for supplies. In a desperate and creative frenzy, builders have sourced everything from concrete planks, alternate insulating materials, cross-laminated timber, and bendable concrete to complete their projects.

Check out Creed LA’s mission today!

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