February 22, 2007

INDUSTRY ACCESS*

Potential Changes for Home Depot, Inc.

The Home Depot Inc. said it will consider shedding its division serving contractors, homebuilders and other business customers. Its shares rose on the news. Some analysts said the decision to possibly sell Home Depot Supply could benefit the company by allowing it to focus on generating value for shareholders. However, others suggested it could put the onus back on the company's retail side, where it faces tough competition from Lowe's, reported The Contra Costa Times. Full Story

HD Supply reported sales of $12.1 billion in fiscal 2006, an increase of 161.6% over 2005, mostly due to acquisition activity. Full Story

The Street summarizes a Feb. 20 investor conference call with Home Depot CEO, Frank Blake, who elaborated on plans to explore strategic options for the company's supply business. Full Story

Click here for more Industry Access news including recent new hires, merger & acquisition activity and who's offering new products.

* DHI Members may submit news releases to be considered for inclusion in DHI's IndustryWatch. Send to: jmadden@dhi.org.

BUSINESS UPDATE

The value of U.S. construction starts, excluding residential projects, totaled $26.5 billion in January 2007, 28.7% more than in January 2006, according to Reed Construction Data. Starts increased 3.8% from December 2006 on top of an 18.2% monthly increase in the previous month. Full Story

The Architecture Billings Index (ABI) showed positive conditions across all geographic regions and market sectors in January. With an approximate nine to twelve month lag time between architecture billings and construction spending, the forecast remains favorable for the nonresidential construction market throughout 2007. The American Institute of Architects (AIA) reported the January ABI rating was 57.9 (any score above 50 indicates an increase in billings), compared to a score of 57.6 in December. Full Story

FMI Corporation's 2007 U.S. Markets Construction Overview predicts continued growth for the industry with an optimistic forecast of 2.2% increase for total construction put in place in 2007. FMI estimates that growth for non-residential construction markets may reach as high as 9.0% overall and that almost all sectors, with the exception of religious buildings, will be well ahead of the growth rate for GDP in 2007. Full Story

The January Producer Price Index for Wood Doors (flush & panel, interior & exterior) was up 2.7% from 2006 and the Other Wood Doors (Incl. garage, screen, storm, etc.) PPI was up 2.2% compared to a year earlier. Compared to December, 2006 the unadjusted January PPI was down 0.1% for Wood Doors and the PPI for Other Wood Doors was up 0.5%, according to the Bureau of Labor Statistics. The PPI for Metal Doors, Sash & Trim was up 0.7% from December and up 2.8% from January 2006. The January PPI for Door locks, locksets & locktrim was up 1.6% from December, and was up 8.8% from 2006. Click here to view the full January Producer Price Index report. (PDF file - Wood Door information is on page 12, Lock data and Metal Door data is on page 17)

A group of Stanford engineers is rethinking the life cycle of today’s building materials. They are demonstrating how new "biocomposite" materials could cycle through landfills much more quickly than wood, minimizing waste, providing energy, preserving perhaps thousands of acres of trees and maybe even helping slow global warming, reported Exduco. Full Story

A year and a half after Hurricane Katrina devastated the Gulf Coast, destroying schools and displacing students, school leaders are still struggling to rebuild damaged facilities and technology infrastructures, reported eSchool News. Full Story

The Association for the Advancement of Sustainability in Higher Education (AASHE) has established a policy requiring all campus construction be built to the U.S. Green Building Council’s (USGBC) LEED Silver standard as part of AASHE’s support of the American College & University Presidents Climate Commitment. The Presidents Climate Commitment is an effort to make campuses more sustainable and address global climate change, reported Building Design and Construction. Full Story

CONSTRUCTION & DESIGN

Monthly spending on health care construction projects is currently 20% higher than a year ago. The growth rate is expected to ebb to about 15% by the end of 2008. The project pipeline is full. Construction starts, measured by Reed Construction Data, increased 25% last year. A further 35% rise is expected in 2007-2008. Full Story

Building Design and Construction interviewed leading architects and researchers to determine what patient safety designs they advocate and what issues they face when designing healthcare facilities. Their top three patient safety design concepts: 1) design for the caregiving process; 2) design for standardization; and 3) decentralize nursing stations. Full Story

An updated version of the Green Guide for Health Care has been recently released, marking the end of the pilot program. The Green Guide for Health Care, the first and only sustainable design toolkit tailored to the health care industry, launched a new updated version that includes more tips and tools for adding healing design features, energy and water efficiency strategies, and safer materials to the health care setting, reported FacilitiesNet. Full Story

While the emergence of building information modeling is no doubt providing huge advantages in cost and time savings on all types of projects, perhaps no other building type stands to benefit more from BIM than healthcare facilities, where cost and schedule are crucial and where quality control can literally be a matter of life and death, reported Building Design and Construction. Full Story

School Construction News profiles a renovation project at the Sidwell Friends School — a historic pre-kindergarten through 12th grade private school in Washington, DC. The work on the middle school building on the 15-acre campus included 70,000 sq. ft. of renovated and new space with enough sustainable-design concepts to make it a contender for LEED platinum certification — the highest level of certification from the U.S. Green Building Council. Full Story

The Energy Efficiency in Buildings Project, which envisions a world where buildings consume zero net energy took the next step forward in achieving its goals. An initiative of the World Business Council for Sustainable Development (WBCSD), the EEB project announced the formation of the EEB Assurance Group, which will be to oversee and validate the research and conclusions of the EEB project, reported Greener Buildings. Full Story

SECURITY & SAFETY

Beginning this year, Daylight Savings Time (DST) has been extended by the U.S. government by a month, begging the question: Are you prepared? Security and fire alarm systems, access controls systems, and a host of other vital operations have real-time clock chips that timestamp log openings, closings, trouble signals, alarms, etc. If these chips were installed without the new DST rules, vital information could end up inaccurate and access control systems on the wrong schedule during the extended weeks, reported Security Sales & Integration. Full Story

Sales of biometric technologies are growing by 200% per year, according to Walter Hamilton, vice president of Kirkland, WA-based Saflink Corp., and chair of the International Biometric Industry Association in Washington, DC. "But the category hasn't reached critical mass yet. In the commercial markets, research suggests that only 5% of companies have installed biometrics," reported Access Control & Security Systems. Full Story

Off-the-shelf products and existing enterprise systems can form the foundation of a seamlessly integrated security system. Facility executives have many building systems to keep track of. Most buildings have an access control system, a badging system, a visitor management system, a parking management system, and a CCTV system with video recording, as well as a fire system and a building management system for HVAC/AC power. Each system requires a database, communication links, and software/hardware to operate, and is typically managed on its own PC. Integrating these systems can allow for a more streamlined security management system, reported FacilitiesNet. Full Story

GOVERNMENT AFFAIRS

AIA President RK Stewart, FAIA, testified before the Subcommittee on Energy of the Senate Committee on Energy and Natural Resources on the issue of energy efficiency in buildings. He explained the pivotal role that buildings play in contributing to climate change and recommended that Congress pass legislation committing the federal government to meeting aggressive energy efficiency requirements for federal buildings. Specifically, it is the AIA’s recommendation that all new buildings and major renovations owned or leased by the federal government should immediately meet fossil fuel generated energy consumption targets that represent a 50% reduction from that of similar federal buildings in 2003. In 2010, this target would increase to a 60% reduction. The targets would increase thereafter at five year intervals until 2030 when new federal buildings and major renovations would be carbon neutral. Full Story

Legislators are pushing for Maryland to start constructing more energy-efficient buildings, a plan backers believe will protect the environment and save the state money, reported The Baltimore Sun. Full Story

The Fire Sprinkler Incentive Act has been introduced in the U.S. Senate by a new lead sponsor, Sen. Gordon Smith (R-Ore.), but the most exciting news, say supporters, is the reduction in the estimated cost of the bill. The bill (S-582) was introduced Feb. 14. It would give tax breaks to those who retrofit homes or businesses with sprinklers. The estimated cost of the bill, called the "score," was reduced from $2.2 billion over 10 years to $884 million over 10 years, reported Security System News. Full Story

SMALL BUSINESS NEWS

Minimum Wage Increase Still Under Consideration

The House is again considering an increase to the minimum wage. As with the Senate bill, H.R. 976 extends tax code Section 179 small business expensing for an additional year through 2010. However, the House bill increases the limit from $112,000 to $125,000. The bill also expands the Work Opportunity Tax Credit (WOTC), as did the Senate's bill, but only extends it for one year instead of the five-year extension in the Senate version.

However, H.R. 976 differs from the Senate's bill in several substantial ways. First, it includes a tip credit enhancement. It also waives the individual and corporate alternative minimum tax (AMT) limitations on the WOTC and the tip credits. Significantly, H.R. 976 will also allow unincorporated businesses owned jointly by a married couple to file as a sole proprietorship so that they both receive credit for paying Social Security and Medicare taxes (currently, only the filing spouse receives this credit).

Alternatively, the House bill does not include the Senate's provision that allows retailers that own their buildings to temporarily depreciate improvements to their building over 15 years instead of 39 years. Nor does it include any language allowing businesses to simplify their bookkeeping by allowing them to use the cash method of accounting for tax purposes. Finally, it does not establish a certification program for employee-leasing companies that provide and oversee employees for other corporations.

The House bill and the Senate bill also have different methods for raising revenue. The Senate bill would raise money chiefly by disallowing future losses on foreign tax-exempt property related to sale-in, lease-out (SILO) transactions. It would also set the effective date of a prohibition on certain inversion transactions about one year earlier, making the effective date March 4, 2002.

The House bill raises money by denying the lowest capital gains and dividend rate for dependents younger than 24 who do not earn more than half of their own income. It also increases, from 18 to 22 months, the time that the Internal Revenue Service (IRS) has to notify taxpayers of failure to comply with tax obligations before the IRS is required to suspend interest and penalties. Finally, for three months in 2012, this bill increases the corporate tax on businesses that are worth over $1 billion.

FOUNDATION NEWS

Foundation meets with staff of Senator Lugar (R-IN)

Representatives of the Foundation for the Advancement of Life Safety and Security meet with senior staffers for Senator Richard Lugar (R-IN) to discuss and provide educational information on the role that the door and hardware industry provides for life safety and security.

The Foundation proposed similar projects that are taking place in California and scheduled to take place in Connecticut. These projects include working with a local elementary school to inspect and provide opportunities for security upgrades as well as working with local Head Start Centers to provide similar upgrades.

Foundation's New Website

The Foundation's new website was created to give individuals and organizations, outside of the door and hardware industry, a better understanding of what role the Foundation is playing in raising the awareness level of life safety and security through education and goodwill programs.

For the latest Foundation news and programs, please visit www.lifesafetysecurity.org

DHI NEWS

HURRY! TIME IS RUNNING OUT to Register for Upcoming DHI Education!
March 11-16, 2007 in Pittsburgh, PA

Don't miss DHI Education in Pittsburgh, PA featuring a wide variety of classes designed to meet your education needs. DHI Education is for EVERYONE! For a complete course listing and to build your own schedule, go to www.dhi.org/education. Not sure which classes to take? Call us at 703-222-2010 and we can help you select the right course for YOU!

Join DHI And Be Part Of The Association Advancing YOUR Industry!

Not Already a DHI Member? Know Someone Who Could Benefit From DHI? DHI not only offers extensive career advancement opportunities, but it also continues to advocate for the advancement of life safety and security in the built environment!

To find out more about how DHI members benefit from:

Being part of a professional organization dedicated to advancing the future of YOUR industry
Increasing and honing technical expertise through extensive education opportunities
Networking with other successful industry leaders both nationally and locally

Go online to www.dhi.org/membership or call 703-222-2010!

*DHI membership cycle is from July to June each year

INDUSTRY EVENT — 2003 IBC - Solving Means of Egress Issues In Commercial Buildings

DHI's Arizona Chapter is hosting a full day code seminar on Friday, March 30th, 2007. This seminar is designed to provide knowledge of building code requirements for means of egress. The class will include problem solving from a set of plans for a 4-story commercial building related to each egress issue. Priced at only $120, this is an affordable way to hone your understanding of the codes used for our industry. The seminar will be followed by DHI Arizona Chapter's annual golf tournament on Saturday, March 31st, 2007.

Reservations are on a first come, first served basis and MUST be made by March 14th, 2007 to hold space and receive workbooks.

For a registration form, go to www.arizonadhi.org. Questions? Contact David Ortega directly at 602-882-0398 or e-mail DVOAHC@aol.com.