December 13, 2007

Editor's Note - Industry Watch will not be published on Dec. 27. The entire DHI and Foundation staff wish you and your family a happy and safe holiday season.

INDUSTRY ACCESS*

Ingersoll Rand Security Technologies Names Tim Eckersley President, Commercial Americas

Ingersoll Rand Security Technologies announced that Tim Eckersley has joined the sector as president, Commercial Americas. In his new leadership position, Eckersley has the overall responsibility for the profit and loss for all commercial products and channels. He is also accountable for the development and execution of new business strategies and will be continuing the increased focus on delivering innovative new products and services that exceed customer expectations.

Eckersley will report directly to Ingersoll Rand's senior vice president and Security Technologies' president Mike Lamach and is based at the sector's global headquarters in Carmel, IN. For more information, visit www.ingersollrand.com.

JELD-WEN, Brosco Strengthen Partnership, Capitalize on Fiberglass Door Industry Growth

JELD-WEN, the world’s largest manufacturer of reliable windows and doors, announced that the company has become the sole supplier of fiberglass doors for Brockway–Smith Company, known as BROSCO, one of the leading door distributors on the East Coast. 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 November Producer Price Index for Wood Doors (flush & panel, interior & exterior) was down 0.1% from 2006 and the Other Wood Doors (Incl. garage, screen, storm, etc.) PPI was up 2.1% compared to a year earlier. Compared to October, the unadjusted November PPI for Wood Doors was up 0.3%, while the PPI for Other Wood Doors was unchanged, according to the Bureau of Labor Statistics. The PPI for Metal Doors, Sash & Trim was down 0.1% from October and up 1.6% from a year ago. Click here to view the full November Producer Price Index report. (PDF file - Wood Door information is on page 12 and Metal Door data is on page 17)

A new report says that by the year 2030, Canadian commercial buildings - offices, institutional and public service facilities, hospitality, entertainment, retail and wholesale trade spaces - can achieve a 50% energy reduction over their lifecycles. The report was released by Sustainable Development Technology Canada (SDTC), a not-for-profit Ottawa-based foundation that finances and supports clean technology use and development, reported Business Edge News. Full Story

Many commercial real estate players think they may not see a major turnaround throughout most of the country during the new year. "Uncertainty and challenges characterize 2008, with greater downside risk than real estate markets have faced in close to two decades," concluded the Emerging Trends in Real Estate report by PricewaterhouseCoopers and the Urban Land Institute. Even though the commercial sector was faring better than housing, the biggest concerns for the respondents were economic: job growth, construction costs, interest rate changes, income and wage growth and inflation. And not surprisingly, 78% said they expected underwriting standards for commercial and multifamily mortgages to be more stringent in 2008, compared with 70% surveyed last year and just 37% in 2005, reported the New York Times on the Web. Full Story

Reed Construction Data has authored a brief primer on construction costs. Full Story

Construction costs have weakened quickly in the last few months under pressure from the 10% drop in construction activity since the February 2006 peak level. The 40% drop in single family construction spending has more than offset still rising nonresidential construction spending. Residential labor rates and margins and prices for materials heavily used in residential construction have fallen significantly but labor rates and margins for nonresidential buildings and heavy projects have yet to weaken although some modest weakening is expected in the next year, according to Reed Construction Data. Full Story

The U.S. Green Building Council (USGBC) and the Green Guide for Health Care recently announced their agreement to work together on tools, educational programs and activities to support green health care building. USGBC provides the LEED for Healthcare rating system, available for inpatient care facilities, licensed outpatient and long-tern care facilities, medical offices, assisted-living centers, and medical education and research facilities, reported GreenerBuildings.com. Full Story

Recent declines in both short-term and long-term interest rates should help to put some canceled remodeling projects back on track, according to Kermit Baker, director of the Remodeling Futures Program of the Joint Center for Housing Studies at Harvard University. But what the market really needs are homes that are appreciating in value. He notes, "Nothing indicates that there will be a quick turnaround" in that department, reported Kiplinger.com. Full Story Click here (Pdf file) to read Harvard's study A Long-Term Outlook for Homeowner Remodeling Activity.

The American Society of Interior Designers Foundation and the U.S. Green Building Council have partnered to create the first nationwide green residential remodeling guidelines for existing homes. The guidelines, comprised of best practices using a "whole-house" approach, will be supplemented by learning programs and print and electronic resources for building professionals and homeowners as part of the REGREEN program. Full Story

CONSTRUCTION & DESIGN

The surge in office development is ebbing, but office construction spending will expand 12% in both 2008 and 2009, on top of 19% gains experienced in the previous two years. While the value of office construction starts is up 27% year-to-date through October, monthly starts during the last four months have fallen below the late 2006/early 2007 peak. Rapid expansion of office-based industries, especially consulting, software, accounting, and insurance, is fueling the rising demand for office space. The pipeline of planned office projects is stuffed with the value of pending projects, triple the amount since the last building cycle bottomed out four years ago. An increasing share of these projects, however, will be substantially delayed or remain unbuilt because new office supply now matches office space demand, keeping the national vacancy rate at 14.8%, reported Building Design & Construction. Full Story

The Fourth Quarter 2007 Turner Building Cost Index value is 876, a 1.51% increase in construction costs over the Third Quarter 2007 and a 7.09% increase over the Fourth Quarter 2006 index, reported Building Design & Construction. S From the materials perspective, commodity prices have eased slightly over the past quarter, but global demand, especially from the emerging economies, continues to drive an upward trend in prices. Manufacturing and transportation cost increases, reflecting increased energy costs, have also added to the escalation of construction costs.” Full Story

In order to help offset rising homeowner utility costs and lengthening commuting times, homeowners are looking for neighborhoods and communities designed to include greater access to public transportation, recreation, commercial and entertainment options. Mixed-use developments are projects where residential units are blended with retail, dining and other commercial activities in the same facility. Infill housing, where smaller land parcels closer to urban centers are targeted for development, is also increasing as metropolitan areas are becoming more built-out according to the American Institute of Architects (AIA) Home Design Trends Survey from the third quarter of 2007. Full Story

SECURITY & SAFETY

All but 10 of West Virginia's 55 counties have submitted plans to become eligible for $10 million to provide new locks, doors and other safety improvements in West Virginia’s schools. School Building Authority Executive Director Mark Anthony Manchin said 31 county plans have been approved to date. Those that remain to be approved need "relatively minor changes," reported The Journal. Full Story

GOVERNMENT AFFAIRS

North Carolina's Building Code Council is considering changing the state's accessibility codes. At a recent public hearing at the Legislative Building most of the discussion centered on a proposal for the council to adopt the accessibility requirements of the International Building Code, with some state amendments. Currently, the state uses its own Accessibility Code. North Carolina is one of six states with a code that has been certified through the Americans with Disabilities Act guidelines. Insurance Commissioner and State Fire Marshal Jim Long says he's against abandoning the state's accessibility code for that of the IBC. Long says North Carolina has an advantage in dealing with complaints because of its code's compliance with ADA, reported NBC17.com. Full Story

By February, contractors in Jacksonville, FL committing to build environmentally friendly projects could get their permits faster than others waiting in line, if the City Council approves an ordinance offering this and other green building incentives. The City’s Environmental Protection Board recently finished a draft version of the ordinance creating an overall green program for new City construction and incentivizing green construction in the private sector, Jacksonville's Financial News and Daily Record. Full Story

Ten Midwestern U.S. and Canadian leaders signed a regional greenhouse gas-reduction accord. The accord will establish greenhouse gas-reduction targets and timeframes, develop a cap-and-trade mechanism and establish fuel standards and regional incentives and funding mechanisms, reported UPI. Full Story

SMALL BUSINESS NEWS

Energy Bill

Will Congress will pass an energy bill and/or will the President veto it? Lots of angles in this bill for small business, one of which is the Corporate Average Fuel Economy (CAFÉ) standards (aka miles per gallon.) For years, we have had different requirements for cars and light trucks. The initial push in this Congress was to have a single standard. The bill the House passed last week, and the Senate rejected, includes provisions that maintain distinctions.

Light truck fuel economy requirements were first established for Model Year (MY) 1979 (17.2 mpg for 2-wheel drive models; 15.8 mpg for 4-wheel drive). Standards for MY 1979 light trucks were established for vehicles with a gross vehicle weight rating (GVWR) of 6,000 pounds or less. Standards for MY 1980 and beyond are for light trucks with a GVWR of 8,500 pounds or less. On March 31, 2003, DOT issued new light truck fuel economy standards, setting a standard of 21.0 mpg for MY 2005, 21.6 mpg for MY 2006, and 22.2 mpg for MY 2007.

Now, under the House bill, as we understand it, it appears the weight class would be pushed up to 10,000 GVWR for “automobiles.” (Goodbye gas guzzling SUVs) There would be a separate definition for a “work truck” between 8,500 and 10,000 GVWR, and a definition for medium and heavy vehicles over 10,000 GVWR. The 35 mpg reported in the general media is for the automobiles and “not a work truck” under 10,000 GVWR by 2020 with minimum standards in the interim. The bill still leaves the determination for the truck categories to administrative rulemakings.

DHI's Jerry Heppes sits on the board of the Small Business Legislative Council. If you'd like more information on these or other issues affecting small businesses, feel free to contact him at jheppes@dhi.org.

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