News

Construction Industry Rebounds Faster Than Any Industry

  • Among the effects of the pandemic, the construction industry has shown promising and rapid growth. By the end of July, the businesses recovered 59% of total jobs lost. Infrastructure alone grew by 40% in August, and backlog for many contractors looks promising. These numbers indicate significant development and growth over any other industry in the U.S.  Construction is an essential industry and one that has maintained momentum during the government shut down. The industry’s unemployment rate is 8.9%, which is lower than the national average of 10.2%. Of the 40% in infrastructure, including $184.4 billion worth of work in which nearly reversed any decline we saw in the previous months. Environmental public work shows an 89% gain, as well as highways and bridgework, show a 13% gain. Construction is continuing to move forward and shows significant advances moving forward into 2021.
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Environmental Resources Legislation and Potential Impacts on Transportation

Governor Ron DeSantis created an initiative, Order 19-12, which directed the Florida Department of Environmental Protection (FDEP) to secure a tremendous amount of environmental funding for 2019. This funding was an aim against the huge amount of harmful algae blooms growing around the state. Now, new legislation has been created called the “Clean Waterways Act”.  A bill often referred to as the “governor’s environmental bill” will help implement the Blue Green Algae Task Force and its significant contributions. The Clean Water Ways Act will affect transportation and construction industries, local governments, public and private utilities, as well as landowners.

For example:  

  • Stormwater: By July 1, 2021 FDEP will update “stormwater design and operation regulations using the most recent scientific information” this means including low-impact designs and management practices. Also conducting additional inspections to facilities and creating a stormwater program that contains large target nutrient reduction practices and green infrastructure.  
  • Septic Tanks: The septic tank regulation program aims to add more nutrient pollution prevention while implementing a fast-track approval process for “NSF 245” approved nutrient reducing septic tanks. As well as, transferring the onsite sewage treatment and disposal system (OSTDS) and all associated personnel from the Florida Department of Health to FDEP by July 1, 2021. This will also add “septic to sewer” projects to the annual water resource assessment conducted by the legislature’s Office of Economic and Demographic Research.
  • Wastewater and Biosolids: Provides a new grant program that will upgrade sewer treatment facilities to “advanced waste treatment” (AWT), connect septic tanks to sewer systems, and create septic tanks into nutrient reducing systems. This will also direct FDEP to adopt all new biosolids management rules. As well as double FDEP penalties for wastewater violations and failure to survey portions of sewer collection systems, while taking steps to reduce sanitary sewer overflows.
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State of the Water Industry (SOTWI)

  • On an annual basis, the American Water Works Association (AWWA) conducts the SOTWI survey to understand important issues within the public water sector. The survey transmits critical self-measurements of the industry, protection of the environment, ways to strengthen communities, and how to support water community practices to provide safer water.
  • Three primary objectives of this survey are to:
    • Develop valuable insights regarding key water industry issues
    • Identify important issues not being adequately addressed to raise awareness and assign a higher industry priority for these issues
    • Identify and track significant industry trends
  • Over 3,300 participants were surveyed between October and November 2019. Respondents came primarily from utilities, combined water and wastewater, water wholesalers, and reusable utility scope of work. Demographics varied from 20 years of experience (45%) as well as those under the age of 35 (14%), with 88% coming from public utility work.

Respondents rated the overall health of the water sector today, as well as their expectations 5 years from now. The water sector was rated 5.22 (n= 3,098) five years into the future while the projected soundness in the region is 5.10. The survey showed several results that were more enthusiastic this year than the past 16 years.

The water sector weighs in on major concerns for the industry. The top 10 issues facing the community are similar to the past year’s results.  The most significant impact is infrastructure renewal and replacement topping. In addition, financing these capital improvements is a major concern, especially with the existing state of the economy, however, these results were done before the current pandemic. Extreme weather events have consistently identified as the large-scale anticipated impact on the water community. About 90% of the respondents indicated their plans to impalement emergency readiness plans and about 69% have already or in the process of developing a community risk and resilience assessment.

The main goal of the water industry is to find more efficient ways to use our water resources safely. In this recent study, the top three cost-recovery needs for sales and consumption indicated fee modifications, changes to the growing population, and increasing financial reserves. On the other hand, protecting resources requires a critical implementation to safeguard the water source. Utility respondents indicated 76% have or in the process of implementing Source Water Protection (SWP).

Water professionals face relatively the same challenges from year to year. However, there is a positive shift when it comes to recognizing the importance of reusable water programs. As well as a positive shift to fully cover costs now to provide utility services now. These cost recovery systems allow utility professionals to provide communities with safe and clean reusable water. The water sector was stated to be the most soundness it has been in over 16 years, showing progression in challenges, concerns, and progress.

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AEC Proposal Activity at Lowest Level in a Decade

For the second quarter of 2020, the proposed activity for architecture, engineering, and construction was at its lowest level in over a decade. COVID-19 has reduced backlog and diminished revenue for businesses across the country. PSMJ Resources has reported a record low of its Net Plus/Minus Index (NPMI) of negative 22 percent, down from 17 percent in the first quarter. The NPMI shows the difference between the percentage of firms reporting an increase in activity and decrease.

 New data shows that “we’re clearly still a long way from being out of the woods,” said PSMJ consultant Greg Hart in a press statement. “This is the third-lowest quarterly NPMI for proposal activity in the 17-year history of our survey, and while some of the markets and submarkets have remained relatively healthy, most are still struggling.”

The American Institute of Architects’ Billing Index reports historic decreases in demand for U.S. design services in the latest months, showed a huge drop for architecture services. Projected revenue for the third quarter jumped to -5% from -49%, meaning that about as many firms expect an increase in revenue as expect a decrease.

A few construction sectors showed net growth in proposal activity in the second quarter of the report. These markets are:

  • Water/Wastewater 20%
  • Energy/Utilities 15%
  • Healthcare 10%
  • Housing 2%
  • Environmental 0%

Market sectors with the least proposal activity are:

  • Education -30%
  • Heavy Industry -26%
  • Government Buildings -13%
  • Transportation -10%