Subscribe to our newsletters & stay updated
This issue celebrates the 75th anniversary of The Wholesaler Magazine, which has evolved into the premier industry organ serving the plumbing, heating, ventilation, air conditioning (HVAC) and the pipe, valve and fitting (PVF) industries. Tom Brown’s vision to incorporate a full section of the magazine to PVF issues has expanded the coverage of all sectors of the commercial wholesale industry, especially for blended distributors serving the Plumbing, HVAC and PVF markets.
Members of the Brown family continue to provide responsible reporting and a quality product insuring the longevity of the magazine. Congratulations to all and to Tom Brown, a special friend.
October also is the start of the fourth quarter of 2020. The manufacturing sector of the economy is on track for a V-shaped recovery. The challenge now is sustaining this activity.
Data from IHS Markit and the Institute for Supply Management (ISM) both show a sharp rebound in the U.S. manufacturing sector. ISM’s purchasing managers’ index (PMI) rose to 56, a level indicating expansion in the manufacturing sector. IHS Markit PMI came in at 53.1, indicating the rebound in activity.
Even with the constraints and challenges ahead, the manufacturing sector is another part of the economy where a V-shape recovery is taking hold in the early stages of recovery.
How quickly the sector can continue this expansion amid supply, labor and inventory constraints, however, will be the challenge during the fourth quarter.
As of this writing, the U.S. jobless rate fell to 8.4 percent as payrolls increased by 1.4 million. This is the first time the unemployment rate has dropped below 10 percent since March as employees head back to work as the economy begins to recover from the pandemic. Still, the jobless rate remains too high, indicating we have a lot of work to do to return to the pre-pandemic rate of 3.5 percent.
COVID-19 has been the catalyst for project delays, layoffs and furloughs; however, most contractors find it difficult to find craft workers. According to a workforce survey conducted by the Associated General Contractors of America, 60 percent of respondents reported having at least one future project delayed or cancelled; 33 percent said projects already underway were halted. More than two-thirds of those reporting (44 percent) indicated that it is taking longer to complete projects, while 33 percent stated it costs more to complete ongoing projects due to the coronavirus.
Despite that, a shortage of labor remains. More than half of respondents (52 percent) reported having a difficult time in filling hourly craft workers and only 3 percent of firms were reducing pay, despite the downturn in business. Around 50 percent of the contractors stated they are not altering head count; 23 percent indicated they are adding employees.
Southwest Region Project Startups
The U.S. Southwest Region (Arkansas, Louisiana, Oklahoma and Texas) is poised for more than $4.4 billion in industrial manufacturing project startups during the fourth quarter.
Amazon is planning to start construction on distribution centers in Texas and Louisiana. In El Paso, Texas, the retail giant will build a 2.8-million-square-foot grassroot facility. Construction is scheduled for completion in one year. In Baton Rouge, La., Amazon will build a 1.1-million-square-foot distribution facility.
Digital Realty Trust is preparing to begin construction on Phase 1 of its grassroot data center. The project consists of a 280,000-square-foot, 32-megawatt data hall for a proposed multi-phase, 1.4-million-square-foot, 160 MW facility. Construction cycle is expected to be one year.
Linear Labs will begin a major renovation to a plant in Fort Worth, Texas, that will develop electric motors. The 500,000-square-foot structure is a former airplane maintenance facility. Construction is scheduled for completion in early 2022.
The largest project in the region is the expansion of a container terminal and distribution center at the Port of New Orleans, La. The project will be built on a 675-acre plot on undeveloped land to accommodate the growth rate (4.5 percent annual) and larger ships with a TIV of $1 billion.
Skydweller Aero will construct a grassroot aircraft assembly and testing facility in Ardmore, Okla. This will be a 55,000-square-foot facility, enabling the company to develop solutions for unmanned aircraft.
Great Lakes, Southeast Region Projects
The Great Lakes Region (Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin) has more than $2.5 billion in planned startups in power projects during the fourth quarter.
Competitive Power Ventures’ 1,146 MW Three Rivers Energy Center in Morris, Ill., is scheduled to start during the fourth quarter after being delayed from a summer start schedule due to the COVID-19 pandemic.
In Joppa, Ill., Vista Energy Corp. is planning to start boiler refurbishment on its coal-fired Unit 1 of the Joppa Generating Station.
The Southeast Region (Alabama, Florida, Georgia, Tennessee, Puerto Rico and the U.S. Virgin Islands) is home to $1.45 billion in steel mill projects. Alabama is the center of activity with $1 billion in project spend, driven by ArcelorMittal USA and a $500 million electric-arc furnace addition at its steel-processing plant in Calvert.
In Georgia, there are two projects for Gerdau Ameristeel North America at its steel and rolling mill located in Cartersville. They consist of a rolling mill upgrade scheduled for completion in January 2021, and an electric-arc furnace refractory 2020 quarterly rebuild.
PVF Roundtable News
The PVF industry provides the veins, arteries, regulators and pumps for the economy. There is not a product produced that at some point in the process does not require a piping system to deliver the media required to produce said product.
The PVF Roundtable’s mission is to recruit and provide education assistance to incentivize young people to enter our industry for the replacement of retiring skilled workers and managers.
In addition, the PVFRT provides a platform for the sharing of ideas, information and networking with associates from all sectors of the PVF industry.
As a member of the board of directors of the PVFRT, and I believe I speak for all, we thank all our sponsors, especially our key sponsors (Weldbend, Elite Supply, Gibson Products, Ferguson and MRC), all our volunteers and our membership for making our mission possible.
Several of our networking meetings and fund-raising events —including the golf tournament and TroutBlast — were canceled due to the weather and the devastating effects of the coronavirus pandemic.
The Christmas Toys for Tots and networking meeting is tentatively scheduled for December. Due to the restrictions on assembly generated by the COVID-19 pandemic, we suggest you regularly refer to the PVFRT website, www.pvf.org, for any announcements regarding the date and/or possible cancellation.