DOL Issues Final Rule to Clarify Rights to Employee Representation During OSHA Inspections
The U.S. Department of Labor announced a final rule clarifying the rights of employees to authorize a representative to accompany an Occupational Safety and Health Administration compliance officer during an inspection of their workplace. The final rule was published in the April 1 Federal Register and becomes effective May 31.
The Occupational Safety and Health Act gives the employer and employees the right to authorize a representative to accompany OSHA officials during a workplace inspection. The final rule clarifies that, consistent with the law, workers may authorize another employee to serve as their representative or select a non-employee.
For a non-employee representative to accompany the compliance officer in a workplace, they must be reasonably necessary to conduct an effective and thorough inspection.
Consistent with OSHA’s historic practice, the rule clarifies that a non-employee representative may be reasonably necessary based upon skills, knowledge or experience. This experience may include knowledge or experience with hazards or conditions in the workplace or similar workplaces, or language or communication skills to ensure an effective and thorough inspection. These revisions better align OSHA’s regulation with the OSH Act and enable the agency to conduct more effective inspections. OSHA regulations require no specific qualifications for employer representatives or for employee representatives who are employed by the employer.
The rule is in part a response to a 2017 court decision ruling the agency’s previous regulation, 29 CFR 1903.8(c), only permitted employees of the employer to be authorized as representatives. However, the court acknowledged that the OSH Act does not limit who can serve as an employee representative and that OSHA’s historic practice was a “persuasive and valid construction” of the OSH Act. The final rule is the culmination of notice and comment rulemaking that clarifies OSHA’s inspection regulation and aligns with OSHA’s longstanding construction of the act.
Construction Materials Prices Increase 0.4% in March
Construction input prices increased 0.4% in March compared to the previous month, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data released April 11. Nonresidential construction input prices also increased 0.4% for the month.
Both overall and nonresidential construction input prices are 1.7% higher than a year ago. Prices fell in all three energy subcategories last month. Natural gas prices were down 37%, while unprocessed energy materials and crude petroleum were down 6.9% and 0.8%, respectively.
“There has been growing evidence of resurfacing inflationary pressures in the nation’s nonresidential construction segment during the past two months,” said ABC Chief Economist Anirban Basu. “Were it not for declines in energy prices, the headline figure for construction input price dynamics would have been meaningfully higher. A new set of supply chain issues is emerging, including the cost of insuring ships and bottlenecks in the Red Sea, the Panama Canal and Baltimore.
“This is not especially good news for those who purchase construction services,” said Basu. “In addition to supply chain issues, there is an abundance of publicly and privately financed megaprojects around the nation, massively increasing demand for certain inputs, and a majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index. With continuing wage pressures and elevated borrowing costs, the implication is that financing construction projects will remain expensive relative to historic norms for the foreseeable future.”
Dodge Momentum Index Fell 9% in March
The Dodge Momentum Index, issued by Dodge Construction Network, fell 8.6% in March to 164.0 (2000=100) from the revised February reading of 179.5. Over the month, commercial planning fell 3.2% and institutional planning dropped 17.2%.
“In 2023, commercial planning decreased while institutional planning notably improved, sitting 29% above year-ago levels in February 2024. While strong market fundamentals should support institutional planning this year, this side of the index is more at risk for a substantive correction after last year’s growth,” stated Sarah Martin, associate director of forecasting for Dodge Construction Network. “Much of the decline on the institutional side is credited to lower levels of education planning. Between February 2023 and February 2024, life science and R&D laboratory projects account for roughly 34% of education planning value, with that share reaching 59% in some months. In March, however, that share dropped to 7%. The surge of lab construction in recent years may lead to decreased planning demand as the market absorbs new supply in 2024. Likely, lower lab volumes will result in education planning returning to its long-run, and more sustainable, average.”
On the commercial side, slower growth in office and hotel planning pulled down this portion of the index once again. Year over year, the DMI was 12% lower than in March 2023. The commercial segment was down 14% from year-ago levels, while the institutional segment was down 10% over the same period.
In March, a total of 14 projects valued at $100 million or more entered planning. The largest commercial projects included the $215 million Microsoft Data Center in San Antonio, Texas, and the $158 million Melrod Data Center Building B in Fredericksburg, Virginia. The largest institutional projects comprised the $277 million Trident Health Hospital in Johns Island, South Carolina and the $220 million Sunset Amphitheater in McKinney, Texas.
The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.
Construction Sector Adds 39,000 Jobs Between February and March
The construction industry added 39,000 jobs in March—the most since January 2023—with gains among all five types of residential and nonresidential categories, according to an analysis of new government data the Associated General Contractors of America released April 5. Association officials cautioned, however, that firms are still coping with significant labor shortages that are undermining broader growth in the sector.
“All types of construction firms were hiring in March,” said Ken Simonson, the association’s chief economist. “But the record number of construction job openings at the end of February indicates contractors would have hired even more workers if they were available to keep pace with demand.”
Construction employment in March totaled 8,211,000, seasonally adjusted, a gain of 39,000 from the upwardly revised February total. The sector has added 270,000 jobs during the past 12 months, a 3.4% increase. Residential builders added 2,300 employees in March, while residential specialty trade contractors added 8,900. Employment rose as well among nonresidential construction firms, by 6,000 at building construction firms, 16,300 at specialty trade contractors and 6,000 at heavy and civil engineering construction firms.
Average hourly earnings for production and nonsupervisory employees in construction—covering most on-site craft workers as well as many office workers—climbed by 4.9% over the year to $35.42 per hour. Construction firms in March provided a wage “premium” of 18.9% compared to the average hourly earnings for all private-sector production employees.
One reason for the rapid wage gains is that the industry continues to struggle to find enough workers to hire. Simonson noted that a different federal report released earlier showed there were 414,000 job openings at the end of February, the highest number of open positions yet recorded for the month.
Nonresidential Construction Adds Whopping 24,600 Jobs in March
The construction industry added 39,000 jobs on net in March, according to an Associated Builders and Contractors analysis of data released April 5 by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has expanded by 270,000 jobs, an increase of 3.4%. Nonresidential construction employment increased by 24,600 positions on net.
“[The April 5] release was a blockbuster jobs report and indicates that recession is not arriving anytime soon,” said ABC Chief Economist Anirban Basu. “The 39,000 jobs added by the nation’s construction segment was roughly twice the monthly growth observed over the past year. If one focuses purely on nonresidential construction, monthly job growth was nearly 80% faster than the one-year average.
Structural transformations in the economy, including replenished domestic supply chains, expanded data center demand and augmented infrastructure, are making it difficult for many project owners to wait for lower construction delivery costs,” said Basu. “Despite the effects of worker shortages, still-elevated materials prices, newly emerging supply chain issues and the high cost of project financing, both privately and publicly financed segments produced substantial employment growth in March. This comports with ABC’s Construction Confidence Index, which shows that a large share of contractors intend to grow their staffing levels over the next six months.
“As always, the jobs report was not completely positive,” said Basu. “Those in search of lower inflation and interest rates will not be comforted by this release. While economy-wide year-over-year wage growth softened to 4.1% in March, the monthly wage growth figure suggested a pace of compensation growth that will render it difficult for the Federal Reserve to substantially reduce interest rates in 2024. The notion that interest rates will remain higher for longer remains firmly in place, which means that project financing costs will likely be an ongoing issue for construction demand, especially in privately financed segments, for the foreseeable future.”
Builder Sentiment Rises Above Breakeven Point
A lack of existing inventory that continues to drive buyers to new home construction, coupled with strong demand and mortgage rates below last fall’s cycle peak helped push builder sentiment above a key marker in March.
Builder confidence in the market for newly built single-family homes climbed three points to 51 in March, according to the National Association of Home Builders/Wells Fargo Housing Market Index released March 18. This is the highest level since July 2023 and marks the fourth consecutive monthly gain for the index. It is also the first time that the sentiment level has surpassed the breakeven point of 50 since last July.
“Buyer demand remains brisk and we expect more consumers to jump off the sidelines and into the marketplace if mortgage rates continue to fall later this year,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan. “But even though there is strong pent-up demand, builders continue to face several supply-side challenges, including a scarcity of buildable lots and skilled labor, and new restrictive codes that continue to increase the cost of building homes.”
“With the Federal Reserve expected to announce future rate cuts in the second half of 2024, lower financing costs will draw many prospective buyers into the market,” said NAHB Chief Economist Robert Dietz. “However, as home building activity picks up, builders will likely grapple with rising material prices, particularly for lumber.”
With mortgage rates below 7% since mid-December per Freddie Mac, more builders are cutting back on reducing home prices to boost sales. In March, 24% of builders reported cutting home prices, down from 36% in December 2023 and the lowest share since July 2023. However, the average price reduction in March held steady at 6% for the ninth straight month. Meanwhile, the use of sales incentives is holding firm. The share of builders offering some form of incentive in March was 60%, and this has remained between 58% and 62% since last September.
All three of the major HMI indices posted gains in March. The HMI index charting current sales conditions increased four points to 56, the component measuring sales expectations in the next six months rose two points to 62 and the component gauging traffic of prospective buyers increased two points to 34.
Looking at the three-month moving averages for regional HMI scores, the Northeast increased two points to 59, the Midwest gained five points to 41, the South rose four points to 50 and the West registered a five-point gain to 43.
Artificial Intelligence in Construction Makes 2024 List of Best New Tech
Out of the new list of the 50 top hottest preconstruction tech companies in the world, many of them are pushing artificial intelligence to make the industry more affordable and efficient.
The 2024 BuiltWorlds Pre-Construction 50 List illustrates top and emerging solutions leveraged by some of the largest contractors, engineers and specialty contractors from around the world. Companies are selected based on a combination of direct industry feedback, case studies and survey data. This year, AI stood out as a theme.
“We’re not surprised to see more and more AI companies making the 2024 list for the best new tech because we’ve seen firsthand how AI is reshaping and improving the construction industry,” said Patrick Murphy, Togal.AI founder ounder and CEO. “Artificial intelligence is revolutionizing construction by making it faster, more affordable and more accurate. With AI, we are eliminating the timely, mundane processes that used to unnecessarily slow building down.”
New AGC Report Calls for “Whole-of-Firm” Approach to Address Ongoing Workforce Challenges
Addressing today’s construction workforce management challenges cannot rest on the shoulders of a single individual or department. Everyone in the firm has a role to play in the long-term solution.
The Associated General Contractors of America has released a report to help firms execute a “whole-of-firm” workforce development approach by empowering stakeholders across their organizations to get involved in recruiting, attracting and retaining workers. Arcoro, a modular HR software solution provider for construction companies and specialty contractors, sponsored and supported the production of the report and associated content.
“A whole-of-firm approach is essential to creating the kind of environment that will help individual firms and the industry successfully recruit and retain workers,” said Brian Turmail, vice president of public affairs and strategic initiatives at AGC of America. “This report is a resource to help construction leaders implement the measures that make sense and will have the greatest impact on their operations.”
The report, “The Whole-of-Firm Approach: A New Paradigm for Construction Workforce Development,” extracts findings and insights from AGC of America’s first-ever National Construction Industry HR & Workforce Conference. The November 2023 event brought together industry leaders, workforce development experts, and company representatives to focus on ideas to address workforce challenges.
The report catalogs specific examples from organizations successfully using a whole-of-firm approach, and breaks down key workforce development tactics for C-suite leaders, human resources departments and frontline teams.
Download “The Whole-of-Firm Approach: A New Paradigm for Construction Workforce Development” from https://tinyurl.com/yy8hah65.
SBA Awards Bon Tool Company with the 2024 Mid-Atlantic Exporter of the Year
Bon Tool Company has been selected as both the 2024 Pennsylvania Exporter of the Year and the 2024 Mid-Atlantic Region Exporter of the Year by the Small Business Administration. This prestigious recognition highlights Bon Tool’s outstanding commitment to exporting excellence and its significant contributions to the regional economy.
Bon Tool has expanded its market presence to 84 countries beyond national borders, showcasing the strength of its products and services on a global scale.
