The Associated and Builders Contractors of America has posted their latest construction back log indicator. This is a relatively new key economic indicator for the construction industry. It measures construction dollar spending outside of the other key economic indicator of “new home” construction or residential construction. This measure is key to signaling potential economic recovery and growth as it focuses on Commercial and Industrial projects key to the economy showing recovery.

It should be noted that this is only an indicator… your results may vary.

The good news for those of us in the Northeast USA is that the backlog/ activity appears to be strongest in our marketplace.

Currently, we are seeing a good amount of activity around the Marcellus Shale play and traditional industries in our marketplace such as powder metal and timber seem to be chugging along. However, due to their most recent reduced production levels, capacity does not appear to be a problem.

We look forward to the Marcellus Play opportunities for our area as they bring gas exploration and construction to production and the midstream operations. This should provide opportunities in the midstream for pipeline construction, compressor stations, pump and metering shelters etc.

www.abc.org/ backlog indicator

Carbone of America in St. Marys, PA recently awarded a new building project to Kessel Construction.  This project is for a 31,250 square foot pre-engineered metal building system that will be used for the industrial sector.  We are excited to start this project in the near future and are looking forward to building for Carbone again.

Additional signs that the economy is moving in the right direction;

major foreign companies looking to buy our resources. The kind of resources to produce big stuff like… steel and energy.

Coal is known as two types;

- metallurgic- used to heat generate the high heat/ energy needed for steel production

- thermal- used by energy plants to produce energy/ electricity

The most recent is real close to home in the Central Appalachian region. An Indian company is looking to buy a US coal company in order to control a key resource needed to produce coal. The same firm is a major producer of steel to global market.

This comes after hearing recently that foreign interests are also looking to buy “Coke “ operations a key raw material in making steel.

Let’s hope that these are good signs for the economy as a key material for industry production and growth, steel is being produced. Additionally, the raw materials and resources to produce steel and energy are seeing activity.

by TimAsinger 20. January 2010 23:52

ABC's www.abc.comConstruction Backlog Indicator Shows New Construction Activity Down 18 Percent in the Last Year

Despite Major Impact of Stimulus Package in 2009, New Construction Dramatically Declined

WASHINGTON, D.C. (January 20, 2010) - Associated Builders and Contractors (ABC) today released its Construction Backlog Indicator (CBI) highlighting a full year's worth of data in commercial, industrial, institutional and infrastructure construction. The most recent CBI of 5.8 months from November 2009 is down 18 percent from November 2008. CBI is a forward-looking measurement of the amount of construction work currently contracted to be completed in the future.

"You can summarize three important points from the recent CBI data – the worst is over for the construction industry as a whole; the recovery may not be a sustained one; and the United States is rebuilding its infrastructure capacity," said ABC Chief Economist Anirban Basu.

"Throughout 2009, the CBI for the infrastructure category has risen as stimulus spending began to flow, and that is now the healthiest average backlog at 10.9 months. However, despite the massive amount of federal dollars involved, smaller construction firms continue to suffer abnormally short backlogs, and there is very little evidence of improvement in backlog within the commercial and institutional category," Basu added.

ABC's CBI represents the only reliable leading economic indicator focused on the U.S. commercial, institutional, industrial and infrastructure construction industries at this level of detail. The indicator is published bi-monthly and data are collected from ABC members on an ongoing basis.

Regional Highlights

o Backlog in November 2009 in all four regions remains below levels from November 2008.

o November 2009 average backlog, compared to October 2009, expanded in the South and Middle States while declining in the West and Northeast. This is consistent with broader economic data that indicate the most forceful economic recoveries are taking place in commodity-intensive states such as Nebraska, South Dakota, Louisiana and Mississippi.

o The average backlog in the South is now 6.5 months, the longest of any region.

o Despite recent improvement, the Middle States continue to suffer the shortest average backlog at 4.9 months, largely a reflection of the ongoing economic malaise impacting the upper Midwest.

CBI Map of Regions, November 2008 v. September 2009

Regional Analysis

"There is ample evidence that the worst period of decline for nonresidential construction across the United States is now behind us. Though backlog remains well below levels from November 2008, backlog has bounced back from its cyclical low in each region of the nation," said Basu. "For instance in February 2009, backlog in the Northeast stood at 4.7 months. Since that time, backlog has increased by more than four weeks. This pattern is repeated in all other geographies that ABC monitors. While this trend in encouraging, we cannot assume ongoing improvement will be sustained. Once stimulus monies begin to run out, backlog could begin to trend lower again."

2009 Industry Highlights

o In November 2009, the heavy industrial CBI category, at 7.53 months, experienced massive improvement in average backlog. Backlog has not been this high in this category since January 2009.

o The commercial and institutional category was the only segment that sustained a decline in backlog compared to November of 2008.

o Average backlog in the infrastructure category bounced back toward 11 months after weaker performance in September and October.

Industry Analysis

"Improving confidence in the domestic and global economies, expanding exports, and rising inventory investment, as well as some thawing in credit markets, are likely responsible for the CBI's increase," said Basu. "America is rebuilding its capacity. Though the commercial and institutional category remains weak due to still sluggish labor markets, rising office vacancy rates and declining hotel occupancy rates, renewed investment in the heavy industrial and infrastructure categories indicates a brighter future for this sector."

2009 Company Size Highlights

o ABC monitors five firm size categories (less than $30 million; $30 million to $50 million; $50 million to $75 million; $75 million to $100 million; and more than $100 million). Of the five categories, three experienced an expansion in backlog in November 2009 from October 2009.

o With the exception of firms in the $50 million to $75 million category, firms in the remaining categories have seen average backlog below November 2008 levels.

o Larger companies, which are also often the most closely aligned to heavy industrial and infrastructure-related construction, continue to enjoy the longest average backlog at 8.5 months.

o By contrast, firms with revenues between $10 million and $30 million report average backlog of roughly 5 months, and firms with revenues between $30 million and $50 million report backlog of less than 5 months.

Company Size Analysis

"Although CBI reflects a generally improving climate for nonresidential construction, it is apparent that many firms continue to struggle," said Basu. "For instance, average backlog is now lower in the $30 million to $50 million annual business revenue category than it has been during any CBI survey period."

About the CBI

Construction backlog is the amount of work, measured in dollars, that companies are contracted to complete in the future. A high backlog value (measured in months) indicates abundant work projects are due to begin in the near term, with predictable overall economic benefits. Conversely, a low backlog indicates fewer work projects are under contract, leading to more uncertain economic impact. Excessively small backlogs mean contractors are running low on available work and need to identify and secure additional sources of future revenues.

The formula ABC uses to convert reported backlogs measured in dollars into months of available work is: current month's level of backlogs (reported in dollars) ÷ Fiscal Year 2008 revenues (base year) × 12 = total months of forward-looking work under contract. To maximize the comparability of one month versus another, ABC has worked to maximize consistent reporting among survey sample participants. The effort has been supported by the longstanding relationships between ABC and its members, as well as carefully crafted communications with those responsible for responding to each monthly survey.

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Associated Builders and Contractors (ABC) is a national association with 77 chapters representing 25,000 merit shop construction and construction-related firms with two million employees. Visit us at www.abc.org.

Winter is here, and with winter comes snow.  Heavy snows or repeated snow storms can cause excessive packed snow or ice on a pre-engineered metal building roof which can impose unusual and excessive loads on any building structure.  Blowing and drifting snow as well as rain on snow can also produce significant and potentially dangerous load increases on a building.  An excessive accumulation of ice, snow or snow mixed with rain can cause a building to be loaded beyond its design capacity which creates a risk of building damage or collapse.

Be aware of warning signs inside a building that may indicate excessive snow or ice accumulation, including purlin deflection, the popping of ceiling tiles in dropped ceilings, and unusual noises.  If any of these situations occur, you should contact Kessel Construction immediately for assistance.  As a general contractor, we are able to assist you in remedying these situations.  If a roof is in danger of collapsing, the building should be evacuated immediately.

There are certain procedures for proper snow and ice removal from a building that must be followed.  In addition, if there is any building damage or collapse due to excessive snow there are measures that need to be followed as well.  Butler Manufacturing Company has specific protocols to adhere to should you encounter either of these scenarios.

Most importantly, safety should be number one on everyone’s list when dealing with excessive snow buildup on a roof.

As 2009 comes ro a close there are a lot of industrial and commercial businesses that are breathing a collective sigh of relief as they have survived the worst economic conditions in arguably 30 years.

The interesting times are still ahead. It seems most businesses in the area kept saying lets get through 2009, let's get through Q1 of 2010, it's gotta get better by Q2 2010. Anyone got a crystal ball?

What's going to happen here is anyone's guess. What does seem to be a consensus is that things have gotten as bad as they can and should start getting better.

One bright spot in the Northern Tier of PA and Southern Tier of NY is the Marcellus Shale Gas play. Should this prove to be as big as all the indicators suggest, there will be a lot of activity and peripheral businesses will grow and/ or be developed. One recent development that brought more positive news to the area was the ANF ruling in favor or Minard Run Oil and additional plaintiffs which allows Oil & Gas development in the Allegany National Forest to the holders of land leaes amd mineral rights and other permissions to the subsurface development of the valuable gas and minerals below. Basically, this gave back to the developers the rights they previously held prior to an earlier court ruling preventing them from developing the commodities below the surface.

The first two quarters of 2010 should still hold plenty of opportunity for businesses that want to build with depressed materials pricing. Currently, steel is still flat, concrete suppliers are indicating that while prices jumped from 2008 to 2009, they are holding 2009 pricing going into to 2010. Unfortunately, while the economy chugged along last year at a sluggish pace many suppliers did not replenish inventories due to the poor economic outlook. Due to this fact many commodities are at very low levels and as demand comes back the suppliers are looking to get more for thier products; - steel - lumber - insulation - membrane roofing products etc

Currently, many of the same folks that thought the first quarter of 2010 held so much promise are now wondering what it was that was going to magically change and bring better times. The indicators are still not there just yet.