Subscribe to our newsletters & stay updated
Construction jobs at the end of the first half of the year showed more strength than during the first quarter and at the beginning of the second quarter. The latest Bureau of Labor Statistics jobs report released July 5 shows that 21,000 additional jobs were created during June compared to only 5,000 added in May.
The best jobs results for construction came in the specialty trade contractors’ sector, which added 13,300 positions in June. Building construction added 6,100 and the heavy construction sector workforce expanded by 1,500 new jobs.
Construction earnings were up 3.2 percent in June to an average hourly wage of $30.73. For the 12 months ended June 30, 2019, the total construction industry employment was up by 224,000, or 3.2 percent.
Activity in the PVF industry has slowed during the first half of the year as all sectors have reported a softening in the market. The recent reduction in pricing for domestic forged carbon steel flanges is a reflection of the soft market and the continued influx of low-cost offshore flanges.
Caution should be taken when considering investing in low-cost offshore material as deceptive reporting and substandard materials have been exposed in the marketplace. The underlying liability exposure to all channels in the market supplying and installing these products should offset the price differential. What is the ultimate cost of procurement?
Northeast/New England starts
Predicated on the announcement of new projects set for construction starts in the third quarter, the PVF industry should experience an upbeat in market activity as the quarter progresses.
The Northeast and New England regions are set to see $2.6 billion in industrial manufacturing project starts in the third quarter. The Northeast region includes Delaware, New Jersey, New York and Pennsylvania. The New England region includes Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont.
New Jersey leads with more than $983 million in planned projects. The largest of these projects is the New Jersey Transit Corp.’s microgrid project in Newark. The generating plant will be natural-gas-fired with a generating capacity of 104 to 140 megawatts. This facility will provide reliable power to New Jersey Transit and Amtrak operations between New York’s Penn Station and northeastern New Jersey when the centralized power grid is impaired. The total investment value (TIV) is estimated to be more than $577 million.
In New England, General Dynamics Electric Boat Corp.’s plans to upgrade and retool its submarine components and shipyard manufacturing plants in Connecticut and Rhode Island. The projects have a combined TIV of $1 billion.
New York-based Global Foundries intends to renovate and expand its manufacturing facility in Hopewell Junction. This project is expected to last about three and a half years with an estimated TIV of $290 million.
Mid-Atlantic/Southeast power, automotive plants
The Mid-Atlantic region is expecting $3.1 billion in third-quarter power projects. It consists of Maryland, North Carolina, South Carolina, Virginia, West Virginia and the District of Columbia. Virginia leads the region in planned project starts with more than $895 million in value.
Among the more significant projects planned for startup is Energy Solutions Consortium’s 630 MW Harrison County Generating Station in West Virginia. This facility is a combined-cycle plant that is intended to begin this summer with completion scheduled for 2022. The project has a TIV of $600 million.
The Southeast region includes Alabama, Florida, Georgia, Tennessee and Puerto Rico. This region has become the hotbed of projects in the automotive sector.
Chicago-based Clayco, a design and build firm, has some of the largest projects. One is Nolan Tyres’ grassroots tire production plant in Dayton, Tenn. This facility will produce tires for automobiles, sport utility vehicles and light trucks. The plant will include a 250,000-square-foot mixing building and a 400,000-square-foot product facility. The project has already begun and has a TIV of $360 million. The scheduled completion date is in early 2020.
Midwest data center facilities
The Midwest region, consisting of Kansas, Minnesota, Missouri, North Dakota, South Dakota and Iowa, is poised to see $2 billion in startups in the manufacturing industry with 21 planned projects.
Data center construction is happening throughout the country and the Midwest is getting its share. One of the more significant projects is Apollo’s grassroots data center located in Waukee, Iowa. This 400,000-square-foot center will house two data halls and systems to support Apple’s Siri, FaceTime and iMessage systems.
Facebook also is expanding in Iowa with phase six of its data center in Altoona, Iowa. This project consists of two buildings with a combined square footage of 1 million. The construction project will add 60 MW of power generation.
Not to be left out, Amazon is planning on constructing a facility in Brooklyn, Minn., on a 72-acre tract in the NorthPark Business Center. The distribution center will consist of a four-story building with a footprint of 647,500 square feet.
Northern Tool + Equipment plans to begin construction on a distribution center in Ankeny, Iowa. This 600,000 square foot facility will enable the company to serve more than 100 retail stores plus online customers.
Trinity Rail Group is constructing a railcar manufacturing and maintenance plant in Shell Rock, Iowa. The facility will manufacture, repair, maintain, inspect and test rail cars.
Rocky Mountain pipeline, beer projects
The Rocky Mountain region — Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming — is seeing $2.4 billion in projects set to kick off in the third quarter.
Among these projects is Molson Coors Brewing Co.’s rebuilding of boiler Nos. 4 and 5 (each having a capacity of 20.4 MW) at the plant to improve efficiency.
Phillips 66 and Plains All American Pipeline are in a joint venture that is moving forward with construction of the Red Oak Pipeline, a $2.5 billion TIV project. The pipeline will move crude oil from a storage terminal in Cushing, Okla., to various destinations in Texas: Beaumont, Houston, Corpus Christi and Ingleside.
Based on current market conditions, pending litigations and possible tariffs (pending negotiations), it is recommended that you keep in close contact with your suppliers regarding pricing and availability.
The U.S. Commerce Department announced it would again apply tariffs on fabricated steel imports from Mexico. A statement released by the Commerce Department said the decision was made after an exhaustive investigation into government subsidies assisting companies that export fabricated structural steel from Mexico, China and Canada. It was determined that Canadian exports did not warrant the tariff; however, those from Mexico and China do.
This is a view of some of the many projects in the planning stages for kickoffs in the third quarter of the year. Again, this should generate an uptick in PVF activity as we move forward in the third quarter.
The next networking meeting of the PVF Roundtable is scheduled for Aug. 13, 2019, beginning at 4:30 p.m. at The Bell Tower on 34th in Houston.
PVF Roundtable’s board of directors urges you, and your associates, to attend the networking meetings. This platform provides opportunities to keep up with current market conditions and developing opportunities/trends, as well as expanding your network of valuable contacts.
Refer to the PVF Roundtable website (www.pvf.org) to register early for this top-rated event.