Category: Construction + Economy

NEMA Creates Federal Infrastructure Project Portal

The Infrastructure Investment and Jobs Act  (IIJA), signed into law in late 2021, represents a significant milestone in the transformation of U.S. infrastructure toward an accessible and electrified transportation system, modernized buildings and lighting, a more resilient grid, and a more efficient and expanded domestic manufacturing sector.

The IIJA

The Infrastructure Investment and Jobs Act  (IIJA), signed into law in late 2021, represents a significant milestone in the transformation of U.S. infrastructure toward an accessible and electrified transportation system, modernized buildings and lighting, a more resilient grid, and a more efficient and expanded domestic manufacturing sector.

The IIJA’s nearly $450 billion investment in energy and electrification projects will unlock huge opportunities for American businesses and workers—including the more than 370,000 men and women employed by U.S. electrical manufacturers—spurring economic growth and innovation that will define the next chapter of our nation’s history.

Lighting

As the lighting market continues its shift toward more efficient, low-energy consuming products, the IIJA will accelerate existing market trends and invigorate new opportunities for the lighting industry.

The IIJA will also provide the opportunity to significantly upgrade the nation’s roadway lighting by installing connected light-emitting diode (LED) roadway lights, which will help create safer driving conditions and smart roads. Furthermore, NEMA expects the same LED-connected systems to be a key part of the EV charging network that the IIJA will help build across the country.

From funding for energy efficiency upgrades, connected roadway lights, to support for the latest in building code improvements, NEMA will track closely the implementation of these funds as they move through federal agencies, program offices, states, and specific program opportunities.

NEMA’s Infographic Detailing $450 Billion Of Infrastructure Funding For The Electrical Industry

The infographic download is available here.

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Survey Of 1,000+ Contractors Foresees Growing New Construction Demand And Hiring

Construction contractors expect increasing demand for numerous types of projects in 2022 despite ongoing supply chain and labor challenges, as most firms plan to add workers this year, according to survey results released today by the Associated General Contractors of America and Sage.

Construction contractors expect increasing demand for numerous types of projects in 2022 despite ongoing supply chain and labor challenges, as most firms plan to add workers this year, according to survey results released today by the Associated General Contractors of America and Sage. The findings are detailed in Expecting Growth While Coping with the Lingering Impacts of the Pandemic: The 2022 Construction Hiring & Business Outlook.

The percentage of respondents who expect a market segment to expand exceeds the percentage who expect it to contract – known as the net reading – in 15 of the 17 categories of projects included in the survey. Contractors are most optimistic about the market for highway and bridge construction, which has a net reading of positive 57 percent. They are similarly optimistic about transit, rail, and airports projects, with a net reading of 51 percent, and water and sewer projects, with a net reading of 50 percent.

These segments all stand to see increased federal investments because of the recently passed Bipartisan Infrastructure bill. Contractors are also upbeat about demand for federal construction projects, with a net reading of 37 percent, and power construction, with a net reading of 29 percent.

The highest expectations among predominantly private-sector categories, with a net reading of 41 percent each, are for warehouses and other healthcare facilities, which includes clinics, testing facilities and medical labs. The outlook for hospital construction is also strong, with a net reading of 38 percent.

Contractors were also optimistic about multifamily residential construction, with a net reading of 32 percent, and manufacturing construction, with a net reading of 27 percent. Expectations were more subdued, however, for public buildings, with a net reading of 20 percent; kindergarten through 12th grade school construction, with a net reading of 19 percent; higher education facilities, with a 16 percent net reading; and lodging, with a 6 percent net reading. Only two categories received negative net readings, both of -8 percent: retail and private office construction.

Optimism about the growing demand for many types of construction projects is leading many firms to plan to hire workers this year. Seventy-four percent of respondents expect their firms will expand headcount in 2022, compared to just 9 percent who expect a decrease. Forty-seven percent of firms expect to increase their headcount by 10 percent or less. However, 22 percent say their headcount will grow by 11 to 25 percent and 5 percent anticipate an increase of more than 25 percent.

Adding those workers will be a challenge, however. An overwhelming 83 percent report they are having a hard time filling some or all salaried or hourly craft positions, compared to only 8 percent who say they are having no difficulty. And three-fourths of respondents say it will continue to be hard to hire or will become harder to hire this year.

The pandemic continues to impact the construction industry, association officials noted. Eighty-four percent of respondents report costs have been higher than anticipated, while 72 percent say projects have taken longer than anticipated because of the pandemic. As a result, 69 percent have put higher prices into bids or contracts, while 44 percent have specified longer completion times.

Supply chain bottlenecks are also impacting construction. Only 10 percent of firms report they have not had any significant supply chain problems. Sixty-one percent have turned to alternative suppliers for materials and 48 percent have specified alternative materials or products.

Rising construction costs and slowing schedules have contributed to a significant number of project delays and cancellations. Forty-six percent of contractors report having a project delayed in 2021 but rescheduled, while 32 percent had a project postponed or canceled that has not been rescheduled.

The full article is available here.

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LCA Publishes 2022 Construction Forecast With Summary of 2021 Economic Indicators

Craig DiLouie authored an LCA article summarizing major 2021 economic indicators and forecasting “Promising” nonresidential construction, looking forward.

Craig DiLouie authored an LCA article summarizing major 2021 economic indicators and forecasting “Promising” nonresidential construction, looking forward. In 2021, the U.S. rebounded from 2020’s short but devastating pandemic recession with the strongest economic growth in nearly forty years. In 2021, the nation’s gross domestic product (GDP) grew 5.7%, ending the year with a quarterly expansion of 6.9%, according to the Commerce Department. During 2021, current-dollar GDP increased 10%, or $2.1 trillion, to a level of nearly $23 trillion, compared to a decrease of 2.2%, or about $480 billion, in 2020.

A major contributor to the economy is construction, which overall similarly rebounded with 9.3% growth in 2021. The rebound was uneven, however, driven primarily by residential construction spending.

The outlook for 2022 is even more positive, particularly for nonresidential, with significant and more balanced growth expected across this sector. If current trends continue, this positive outlook looks to accelerate in 2023. According to the AIA Construction Consensus Forecast Panel of leading economic forecasters, nonresidential building construction spending is expected to expand 5.4% in 2022 and strengthen to a 6.1% expansion in 2023.

Significant and well-known risks remain, however, notably supply chain disruption, inflation, labor challenges, and the lingering pandemic. As a result, the economy is expected to slow this year. The International Monetary Fund has forecasted U.S. GDP growth will slow to 4% in 2022. These risks also extend to the construction industry, producing higher costs and project delays.

The full article is available here.

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The Architecture Billings Index Closed Out 2021 Strong, But Hiring Questions Linger

The American Institute of Architects (AIA) has released its final Architecture Billings Index (ABI) report of 2021, and while the composite index ultimately ended the year strong, questions of whether a labor shortage will continue through 2022 still linger.

The American Institute of Architects (AIA) has released its final Architecture Billings Index (ABI) report of 2021, and while the composite index ultimately ended the year strong, questions of whether a labor shortage will continue through 2022 still linger.

 

Despite ongoing hiring difficulties, material and manpower shortages, and the rampant spread of COVID’s Omicron variant dampening construction, the ABI for December 2021 came in at 52.0. (As a reminder, anything over 50 is an increase from the month before, anything under a decrease.) That’s a slight improvement from the already positive 51.0 recorded in November of 2021, and suggests that the bull run seen over the last 11 months isn’t dead yet.

“Since demand for design projects has been healthy over the last year, recruiting architectural staff to keep up with project workloads has been a growing concern for firms,” said AIA Chief Economist, Kermit Baker, in the release announcement. “Architecture is one of the few industries where payrolls have already surpassed their pre-pandemic high, so meeting future staffing needs is a challenge that most firms will need to confront.”

See the full article here.

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AIA Projects Non-Resi Construction Spending To Increase In 2022 & 2023

According to a new report from the American Institute of Architects (AIA), the nonresidential building sector is expected to see a healthy rebound through next year after failing to recover with the broader economy last year.

According to a new report from the American Institute of Architects (AIA), the nonresidential building sector is expected to see a healthy rebound through next year after failing to recover with the broader economy last year.

The AIA’s Consensus Construction Forecast panel—comprising leading economic forecasters—expects spending on nonresidential building construction to increase by 5.4 percent in 2022, and accelerate to an additional 6.1 percent increase in 2023. With a five percent decline in construction spending on buildings last year, only retail and other commercial, industrial, and health care facilities managed spending increases. This year, only the hotel, religious, and public safety sectors are expected to continue to decline. By 2023, all the major commercial, industrial, and institutional categories are projected to see at least reasonably healthy gains.

The full AIA Report can be found here.

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Q4 Pulse Of Lighting Report Shows Industry Growth, Despite The Pandemic

Last month Electrical Trends conducted the quarterly Pulse of Lighting Survey. Over 200 individuals from the electrical distribution channel – electrical distributors, manufacturer reps, lighting agents, and manufacturers – participated.

Last month Electrical Trends conducted the quarterly Pulse of Lighting Survey. Over 200 individuals from the electrical distribution channel – electrical distributors, manufacturer reps, lighting agents, and manufacturers – participated.

Highlights included:

  1. Distributors, manufacturers, and reps reported high-single-digit growth, with distributors reporting the highest percentage, however, their reporting includes their margins whereas the other audiences are based upon their COGS.
  2. This MSD was a modest acceleration in sales growth from Q3 Pulse of Lighting Report findings, which could relate to energy-oriented (rebate) programs or the need to complete projects by the end of a year.
  3. 73% of the distributors reported growth of more than 5%, which is more than reported similarly in Q3
  4. The market is still driven by small to mid-sized projects, but there are starting to be more “new” projects in these segments. The large project pipeline is very geographic, and sporadic, in nature.
  5. Brands seem to be taking share from unfamiliar brands. The big reason is inventory and “trust.” The smaller companies are more impacted by supply chain issues.
  6. Distributor backlogs are strong. Some customers are buying in advance of price increases. In many instances, it is the supply chain issue.
  7. All audiences expect price increases in Q1 and companies such as GE Current have already announced price increases for lamps as well as fixtures. There is also a significant difference between “announced” price increases and “realized” price increases.
  8. Distributors are seeking alternatives to support their customers due to supply chain delays so that projects can be completed. Much like the adage “cash is king,” nowadays “inventory is king.”
  9. In looking towards 2022, the lighting channel is expected “high-single digit” growth with several respondents expecting double-digit growth. The growth is expected to be driven by price increases, warehouses, data centers, a stronger economy, education, healthcare, and new products, according to respondents. But there are concerns … the same ones as 2021 – supply chain, price increases, COVID, and its impact on the economy.

For the full article, click here.

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World’s First Carbon Streaming Investment Vehicle For LED Lighting And Retrofits Launched

DevvESG Streaming, a carbon streaming investment company, and LED Green Light International (“LEDGLI”), a designer and manufacturer of advanced LED lighting products, today announced the launch of the first carbon streaming initiative to provide investments into large-scale LED lighting deployments, worldwide.

DevvESG Streaming, a carbon streaming investment company, and LED Green Light International (“LEDGLI”), a designer and manufacturer of advanced LED lighting products, today announced the launch of the first carbon streaming initiative to provide investments into large-scale LED lighting deployments, worldwide. The joint initiative takes a unique approach, offering upfront funding for both new and retrofit LED installation projects in exchange for rights to the carbon credits generated by those projects.

The initiative’s goal is to offer corporations, cities and nations the initial capital required to launch green projects that improve businesses and communities, while simultaneously managing the process of carbon credit generation and certification upon the work’s completion. In addition to LED lighting deployments, DevvESG Streaming also invests in other large-scale sustainability projects that generate renewable energy, reduce greenhouse gas emissions, or sequester atmospheric carbon dioxide. Funding is currently available, with a range of new projects already under evaluation.

The full article is here.

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National Building Stock Study Reveals Ongoing Lighting Upgrade Opportunity

Commercial buildings in the United States are trending larger and more commonly feature LED lighting and occupancy sensors. While traditional light sources have declined in use, they remain prevalent in the nation’s estimated 5.9 million buildings, spelling a significant continuing upgrade opportunity, particularly in older buildings that have not been upgraded.

Below is my contribution to the December 2021 issue of tED Magazine, offering another take on the new Commercial Buildings Energy Consumption Survey recently published by the Department of Energy. Reprinted with permission.

Commercial buildings in the United States are trending larger and more commonly feature LED lighting and occupancy sensors. While traditional light sources have declined in use, they remain prevalent in the nation’s estimated 5.9 million buildings, spelling a significant continuing upgrade opportunity, particularly in older buildings that have not been upgraded.

These are just some of the conclusions drawn from the U.S. Energy Information Administration’s latest Commercial Buildings Energy Consumption Survey (CBECS), which has periodically profiled the national building stock since 1979 using a survey-based approach. Published in September 2021, the 2018 report provides estimates for commercial building characteristics such as region, activity, size, age, and equipment. It follows the 2012 report, which provides an historical benchmark.

In this article, we will dig into the data to produce salient findings in two key areas: commercial building characters and lighting and controls adoption.

Buildings

Between 2012 and 2018, the population of commercial buildings grew 6 percent to 5.9 million buildings, and total floorspace grew 11 percent to 97 billion sq.ft. During that time, 357,000 buildings and 7.5 billion sq.ft. were added to the national building stock. Since 1979, the amount of commercial floorspace has nearly doubled.

Other key findings:

  • By floorspace, the largest markets were office, mercantile, warehouse and storage, and education. The most common commercial building types were warehouse and storage, office, and service, representing 48 percent of buildings and 42 percent of floorspace. While common, service buildings constituted only 7 percent of floorspace.
  • The population of education, lodging, warehouse and storage, public assembly, worship, and service buildings increased. Other markets, such as office, healthcare, food sales/service, and mercantile decreased.
  • The largest population of commercial buildings and floorspace was in the South Census Region. The second was the Midwest, followed by the West (populated by buildings of the largest median size), and Northeast (smallest population of buildings, oldest in median years).
  • Newer commercial buildings tended to be larger than older buildings. In 2018, the median building size was 5,400 sq.ft., up from 5,000 sq.ft. in 2012. Seventy percent of buildings were 10,000 sq.ft. or smaller in 2018, down from about 75 percent in 2012.
  • The largest buildings were a small fraction of the building population but a third of floorspace. Buildings larger than 100,000 sq.ft. constituted only 2.4 percent of the building population but 34 percent of floorspace. In contrast, the smallest buildings—1,001 to 5,000 sq.ft.—represented nearly half of buildings but only 8 percent of floorspace.
  • The median year of construction for all U.S. commercial buildings was 1982, producing a median age of 36 years. Seventy-five percent of buildings were built on or before 2000, representing 71 percent of floorspace. Forty-six percent of all buildings, accounting for 41 percent of all floorspace, were built before 1980.
  • A total of 86 million people worked in U.S. commercial buildings. This translated to a median floorspace of 1,175 sq.ft. per worker, a 14 percent increase in space over 2012.

Lighting and controls

Compared to the 2012 survey, the 2018 CBECS shows a remarkable technological shift toward LED adoption at the expense of traditional lighting. It also reveals growing adoption of automatic lighting controls, notably occupancy sensors. Nonetheless, the continuing prevalence of traditional and uncontrolled lighting produces a snapshot of a continuing market opportunity to upgrade older lighting systems.

Key findings:

  • Adoption of LED lighting grew significantly between 2012 and 2018 in commercial buildings to become the second-most common light source. In 2018, LED lighting was used in 44 percent of commercial buildings and 64 percent of floorspace, up from 9 percent of buildings and 25 percent of floorspace in 2012. By 2018, LED was installed in 2.6 million buildings, more than five times more buildings than in 2012, and covered 62 billion sq.ft., more than two and a half times the floorspace. Looking at five major building types, adoption was highest in healthcare, mercantile, and office, as shown in Table 1.
  • Standard fluorescent remained dominant but was in decline. In 2018, standard fluorescent lighting was used in 68 percent of commercial buildings and 76 percent of total floorspace, a decline from 84 percent of buildings and 92 percent of floorspace in 2012.
  • Other traditional sources showed sharp declines in use. From 2012 to 2018, incandescent declined from 33 to 19 percent of buildings, compact fluorescent from 41 to 19 percent, halogen from 16 to 9 percent, and high-intensity discharge (HID) from 9 to 4 percent. In terms of floorspace, from 2012 to 2018, incandescent declined from 44 to 22 percent, compact fluorescent from 62 to 35 percent, halogen from 32 to 15 percent, and HID from 27 to 12 percent.

Table 1. Lighting equipment adoption in 2018 by major building type, expressed as a percentage of floorspace in that vertical market.

Warehouse
and
storage
Office Mercantile Education All health care
Incandescent 10% 21% 35% 17% 33%
Standard fluorescent 66% 79% 83% 83% 84%
Compact fluorescent 17% 44% 52% 31% 59%
High-intensity discharge (HID) 11% 10% 9% 14% 21%
Halogen 7% 13% 35% 12% 27%
LED 47% 74% 75% 63% 77%
  • Occupancy sensor adoption significantly increased. In 2018, occupancy sensors were installed in more than 44 billion sq.ft. in more than 1 million buildings, 26 percent more buildings than in 2012 and 24 percent more floorspace. In 2018, occupancy sensors controlled lighting in 17 percent of buildings but 46 percent of total floorspace, up from and 15 percent of buildings and 41 percent of floorspace in 2012.
  • Adoption of other lighting control equipment was a mixed bag. Daylight harvesting increased from 7 to 7.5 percent of floorspace, increasing from 6.1 to 7.2 billion sq.ft. in 138,000 buildings, but remained flat at about 7 percent of floorspace. Building automation systems for lighting increased from 14 to 17 percent of floorspace, increasing from 12 to 16.7 billion sq.ft. in 317,000 buildings. Light scheduling remained flat at about 35 percent of floorspace. Multilevel lighting and dimming declined from 17 to 15 percent of floorspace, which is somewhat surprising due to the inherent controllability of LED lighting and its utility. Demand-responsive lighting significantly declined from 5 to 2 percent of floorspace. Look at the major building types in Table 2, however, adoption is nonetheless substantial for many of these equipment types in terms of controlled floorspace.
  • Plug load control remained relatively rare. In 2018, for the first time CBECS included plug load control, which showed adoption in less than 1 percent of buildings and around 2 percent of floorspace. This is expected to increase due to this strategy being included in the latest generation of commercial building energy codes.

Table 2. Lighting controls adoption in 2018 by major building type, expressed as a percentage of floorspace in that vertical market.

Warehouse
and
storage
Office Mercantile Education Health care
Light scheduling 16% 46% 65% 35% 44%
Occupancy sensors 40% 62% 49% 57% 70%
Multi-level lighting or dimming 4% 21% 16% 15% 29%
Daylight harvesting 2% 15% 13% 6% 14%
Building automation system (BAS) for lighting 5% 22% 40% 24% 22%

While these adoption gains are impressive from an energy efficiency standpoint, inverting these numbers reveals a strong ongoing lighting upgrade opportunity, particularly in the lighting controls space.

Separately, CBECS estimated buildings and square footage that received a lighting upgrade as a renovation since 2000, around the birth of the LED revolution. Looking at buildings built since 2012, around when LED began achieving mass adoption in general lighting, 82 percent of buildings and 67 percent of floorspace have not received a lighting upgrade since 2000.

This number seems odd due to the significant adoption of LED, suggesting at least some form of upgrade has taken place. At a minimum, we can look to the continuing prevalence of traditional lighting, notably standard fluorescent still in the number one spot. If every standard fluorescent lamp were suitable for upgrade, this alone would represent lighting covering four out of five square feet in seven out of 10 buildings.

All of this leads to a simple conclusion that a substantial portion of the building stock remains untapped for LED and controls upgrades.

Check out CBECS

The 2018 CBECS is available for free online as XLS files at the Energy Information Administration’s website, offering insights into the building market that can be useful for business planning. How many warehouse and storage buildings are in the South? What is the average office floorspace per worker? In what building types is LED adoption greatest?

CBECS offers an estimate for these and many other questions here.

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Dodge Momentum Index Declines in November 2021

The Dodge Momentum Index fell 4% in November to 171.7 (2000=100) — down from the revised October reading of 178.1. The Momentum Index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. In November, commercial planning fell 8% while institutional planning moved 5% higher.

The Dodge Momentum Index fell 4% in November to 171.7 (2000=100) — down from the revised October reading of 178.1. The Momentum Index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. In November, commercial planning fell 8% while institutional planning moved 5% higher.

The value of nonresidential building projects continues to move in a sawtooth pattern, alternating between a month of gains followed by a loss. Since the pandemic began, nonresidential building projects entering planning have been more volatile than in past cycles, likely driven by increased challenges from higher prices and lack of labor.

Despite these issues and a lack of underlying demand for some building types such as offices and hotels, the Momentum Index remains near a 14-year high. Compared to November 2020, the Momentum Index was 44% higher in November 2021. The commercial planning component was 45% higher, and institutional was 41% higher.

A total of 10 projects with a value of $100 million or more entered planning in November. The leading commercial projects were a $240 million Seefried Industrial Properties warehouse in Mesa, AZ, and a $158 million Prologis warehouse in Lebanon, TN. The leading institutional projects were the $450 million Wake Forest Baptist Medical Center in Winston-Salem, NC, and the $241 million Hoboken High School in Hoboken, NJ.

Planning data continues to suggest a healthy level of construction to come in 2022. However, due to higher prices and shortages of labor, actual growth is expected to be modest. The new Omicron variant for COVID-19, and its potential impact on economic growth, highlights the tremendous uncertainly the construction sector will face over the coming year.

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NEMA: Electrobusiness Industry Current Business Conditions Bounce Back

Current electroindustry business conditions have improved, according to the National Electrical Manufacturers Association (NEMA), which recorded a score of 63.3 for its Electroindustry Business Conditions Index (EBCI) in November 2021.

Current electroindustry business conditions have improved, according to the National Electrical Manufacturers Association (NEMA), which recorded a score of 63.3 for its Electroindustry Business Conditions Index (EBCI) in November 2021.

This reversed course from last month, when the EBCI dipped into negative territory, and posted the highest score since June.

The future conditions component of the index (6 months from now) was less optimistic, with a score of 53.3.

NEMA:

The gauge’s movement to well into expansion territory came in spite of commentary perhaps best labeled as cautious. The “broken record,” as framed by one commenter, of supply chain and hiring woes continued as the focus of discussion among respondents. Another comment described the “discombobulated and complicated market environment” presenting a mix of peril and opportunity.

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