Association Releases 2010 Construction Outllook

Association Releases 2010 Construction Outllook

Associated Builders and Contractors (ABC)  released its 2010 economic forecast for the commercial and industrial construction industry. “While the industry battled the effects of the recession in 2009, expect 2010 to be a transitional but sluggish year on the road to recovery,” said ABC Chief Economist Anirban Basu.

“Through late 2008, the industry held up well, but 2009 was a year of retrenchment for many construction sectors, including those associated with private development and municipal projects,” said Basu. “Overall, the nonresidential construction industry has been impacted by a combination of financing constraints, massive job loss and a lack of confidence in local economies across the nation due to falling tax revenues.

“However, the financial crisis that began in 2007 and deteriorated significantly in September 2008 also led to the introduction of a variety of policies designed to jump-start the economy, including the American Recovery and Reinvestment Act of 2009 (ARRA), which is now beginning to support water/sewer and road resurfacing construction projects,” said Basu. “These segments are positioned to be among the big winners in 2010. Segments that are less closely aligned with federal spending are generally poised for another rough year in 2010.

“Despite forecasts for a subdued economic recovery and a relative scarcity of nonresidential building construction during the next one to four years, rising construction costs will be an issue due to a number of global factors, including China’s increasing demand for construction materials,” said Basu. “Construction firms should prepare for 4 percent to 6 percent growth in construction costs per annum during the next several years, which is considerably slower than the two-year average for 2008 and 2009.



New Report Exposes Flaws of Emissions Trading Scheme

New Report Exposes Flaws of Emissions Trading Scheme

The Competitive Enterprise Institute cheered the publication of a new report that could help save the United States from an expensive, damaging new system of global warming regulation. The report, published by the British think tank TaxPayers’ Alliance, details the failure of Europe’s “Emissions Trading Scheme,” which was meant to reduce greenhouse gas emissions across the continent. Congress is now considering its own version of the EU’s scheme, known as a cap and trade system of emission control.

“This report couldn’t have come at a more important time,” said Director of Projects and Analysis Iain Murray. “The leadership in both houses of Congress are poised to ram through cap and trade restrictions which would slow the economy, stifle innovation and  create an enormous burden on American families. Hopefully exposing the costly and wasteful consequences of such policies in Europe will drive home the threat they pose here in the U.S.”

The study, The Expensive Failure of the European Union Emissions Trading Scheme, documents the massive costs imposed by the scheme and the highly volatile nature of the trading mechanism which was supposed to regulate allocation of emissions permits across the continent. The report further details how policymakers in the UK have not only ignored the scheme’s substantial flaws, but have at times adopted policies that have actually increased the burden born by British consumers and taxpayers.

“The European Union Emissions Trading Scheme has cost families across Europe tens of billions of dollars but it has been a goldmine for energy companies, which have made huge windfall profits,” said TaxPayers’ Alliance Research Director and study author Matthew Sinclair. “Despite that, it has failed to produce a stable carbon price, leaving consumers with an unpredictable addition to their bills.  

“Manufacturers already struggling to compete with emerging economies like India and China cannot cope with such a substantial addition to their costs, and driving them abroad won’t help cut emissions – but will mean lost jobs,” Sinclair pointed out. “Americans shouldn’t make the same mistake and risk their prosperity following the same flawed strategy that Europeans are paying such a steep price for.”

CEI is a non-profit, non-partisan public interest group that studies the intersection of regulation, risk, and markets.



Employers Add 100,000 Establishments

United States businesses with employees added more than 100,000 establishments in 2007, bringing the total number to 7.7 million and adding more than 650,000 employees to their payrolls. Overall, employees of businesses in the United States earned more than $5 trillion in annual payroll in 2007, up from $4.8 trillion in 2006.

These economic numbers come from County Business Patterns: 2007, an annual report that contains data covering establishments with paid employees at the national and state levels, and in more than 3,100  counties. An establishment is a single physical location at which business is conducted or services or industrial operations are performed. The report provides data on the number of establishments, employees, and quarterly and annual payroll for most of the 1,100 industries identified by the North American Industry Classification System.

Among the counties with the most establishments, Maricopa, Ariz., added
3,058 establishments; Los Angeles, Calif., added 3,027 establishments; and Orange, Calif., added 1,363 establishments.

A sampling of the 50 counties with the most employees showed average annual per-employee payrolls of  $79,848 in Santa Clara, Calif.; $55,477 in Fulton, Ga.; and $53,134 in Hennepin, Minn.

Industry findings:

The number of law offices increased by more than 850 between 2006 and 2007, bringing the national total to 176,009. California had the most law offices with 21,417, followed by Florida with 15,612 and New York with 13,460. A sampling of counties across the United States showed King, Wash., with 1,637 law offices; Clark, Nev., with 1,039; and Wayne, Mich., with 611.

The landscaping services industry added 2,713 locations between 2006 and 2007, bringing the U.S. total to 93,121. The state with the highest average payroll per employee in this industry was Rhode Island ($55,595), followed by Massachusetts ($54,866) and Connecticut ($48,776).

Among counties with the most landscaping establishments, the average annual payroll per employee in Cook, Ill., was $50,517, while Montgomery, Pa., had an average annual payroll of $41,584, and St. Louis, Mo., had an average of $32,360 in 2007.

County Business Patterns excludes self-employed people, employees of private households, railroad employees, agriculture production workers and most government employees. Information on businesses without paid employees will be released this year as part of the Nonemployer Statistics report.



Classic Thanksgiving Dinner Cost Declines for 2009

Classic Thanksgiving Dinner Cost Declines for 2009

The cost of the classic Thanksgiving dinner has dropped four percent over the past year, according to the American Farm Bureau Federation.

Turkey, stuffing, cranberries, pumpkin pie and all the trimmings, for a family of ten, will cost an average of $42.91 — $1.70 less than last year.

The turkey itself is 3 cents per pound less, at $1.16 per pound, making a 16 pound turkey $18.65.

Milk, at $2.86 per gallon, dropped $.92, contributing the most to the overall decrease.

At most towns across Montana, food prices were slightly higher than the national average.  A gallon of milk still ranged from $3.63 - $3.29, cube stuffing ranged from  $2.99 - $4.15, and turkey ranged from $1.29 - $1.69  pound.

The cost per person for this special meal is less than a typical ‘value meal’ at a fast food place and is much more nutritious,” notes Montana Farm Bureau President Bob Hanson. “The fact that food prices have dropped show a real correlation between the costs of fuel and energy and the price of food.”

Other items showing a price decrease this year were:  a ½ pint of whipping cream, $1.55; a 12-oz. package of brown-n-serve rolls, $2.08; a 1-pound relish tray of carrots and celery, $.72; and a 12-oz. package of fresh cranberries, $2.41. A combined group of miscellaneous items, including coffee and ingredients necessary to prepare the meal (onions, eggs, sugar, flour, evaporated milk and butter) also dropped in price, to $2.50.

AFBF Livestock Economist Jim Sartwelle said despite retail price increases during the last year or so, American consumers have enjoyed relatively stable food costs over the years, particularly when adjusted for inflation.



India: A Good Time, Solid Time to Invest

India: A Good Time, Solid Time to Invest

Since the collapse of the Soviet Union, India has been stepping out more into the world with an economy growing at a rate second only to China. “It’s a good time, a solid time for investment and trade opportunities,” said David Nufrio, an International Trade Specialist on India and Pakistan, for the U.S. Department of Commerce.

Anyone trading with India must understand its great diversity, Nufrio told attendees of the seminar “Dueling Tigers: Expanding Opportunities and Building Business in China and India,” sponsored by Big Sky Economic Development.

Thirty languages are spoken in India, with some 2000 dialects, and a multitude of religions are practiced there. India has 1.15 billion people and growing.

India has a strong relationship with Russia because it followed the model that mirrored soviet socialism, said Nufrio. When the Soviet Union collapsed the country began to expand its exports. Since 1990 exports have quadrupled and imports have increased by five fold.

India has been lowering tariffs on industrial goods. According to Nufrio, in 1991 the tariff was 350% on the price of a product, “which prevented a lot of trade and investment.” It has been dropped to 10 percent.

Read more: India: A Good Time, Solid Time to Invest

U.S. Chamber Announces Support Free Enterprise Campaign

The U.S. Chamber of Commerce has announced that it will develop a sweeping national advocacy campaign encompassing advertising, education, political activities, news media, and grassroots organizing to defend and advance America’s free enterprise values in the face of rapid government growth and attacks by anti-business activists.

“Supporters and critics alike agree that capitalism is at a crossroads,” said U.S. Chamber President and CEO Thomas J. Donohue. “It’s time to remind all Americans that it was a free enterprise system based on the values of individual initiative, hard work, risk, innovation, and profit that built our great country. We must take immediate action to reaffirm the spirit of enterprise in America.”

The Chamber-led Campaign for Free Enterprise, announced at the Chamber’s board meeting in Washington, will be a sustained, multiyear effort, including:

* A grassroots campaign that will deeply engage the Chamber’s broad network of business and professional associations, state and local chambers, small business members, and local advocates.

* A vigorous media, new media, and public education campaign in support of free enterprise, with a special focus on the economic literacy of younger Americans.

* A highly visible national paid advertising campaign to include TV, radio, online, print, and other outlets.

* An aggressive issue advocacy program, leading up to the 2010 elections, to educate citizens on the critical economic issues facing our country.

* Active and effective lobbying to defend free enterprise values, advance pro-growth legislation and, where necessary, legal action to challenge unconstitutional and unlawful government regulations.

The campaign’s elements will be rolled out in stages and will be budgeted at tens of millions of dollars annually.

“Many union leaders, some environmentalists, and a growing force of anti-business activists are pushing governments at all levels to close trading markets, lock down capital markets, expand entitlements, and raise taxes and debt to unsustainable levels,” Donohue said.  “We are going to activate free enterprise supporters, educate the public, and hold politicians accountable as we defend and advance economic freedom.”

“We’re launching this campaign because those who make or influence economic policy must understand that a productive, competitive private sector is not something they can take for granted,” added Donohue.  “It is built on a system of incentives that offers opportunity and rewards for those who work hard and take risks. Take away those incentives through an avalanche of new rules, restrictions, mandates, and taxes and you will seriously undermine the wealth and job-creating capacity of the nation.”

“Dire economic circumstances have certainly justified some out-of-the-ordinary remedial actions by government,” he explained. “But enough is enough. If we don’t stop the rapidly growing influence of government over private sector activity, we will squander America’s unmatched capacity to innovate and create a standard of living and free society that are the envy of the world.”

“Free enterprise is not a perfect system, but it is the best system,” Donohue continued. 

“Given the unprecedented challenges facing our economy, the Campaign for Free Enterprise is one of the most important and necessary initiatives in the Chamber’s nearly 100-year history,” Donohue said.



The Phenomenon of Trade in China

The Phenomenon of Trade in China

“China is a phenomenon. Everything they are trying to do now, has never been done in human history,” said Eric Hsu, Commercial Officer, US Department of Commerce field office in Seattle.  Hsu explained, to area business people, the challenges of doing business in China, for a program sponsored by the Big Sky Economic Development, “Dueling Tigers: Expanding Opportunities and Building Business in China and India.”

US businesses can do business in China, but it’s not easy, according to Hsu, whose agency is under a mandate from the US Congress to expand US trade in China.

China is not a place to try to run a business remotely. Keeping up to date with the day-to- day changes is important, and it is also important to protect against counterfeiting. Hsu urged the prospective exporters to work through Commercial Services in order to know the best approaches.

Seeping over from the 70s, the image of China held by most Americans is usually that of a dictatorship. But, said Hsu, that’s an image that must change because China is now “a modern market.” A lot of American companies look at China as a backward country. They think they can sell products that they couldn’t sell here. That is a mistake,” said Hsu, a US born citizen, served as a commercial officer at the U.S. Consulate General in Shanghai, China and deputy senior commercial officer at the U.S. Embassy in Kuala Lumpur, Malaysia.

Read more: The Phenomenon of Trade in China

Civil Rights Leader Says Cap & Trade Hurts Poor

The policies incorporated in “cap and trade” —  or the Waxman-Markey Bill – are an “assault” on the poor and middle-income citizens of America, according to Niger Innis, national spokesman for the Congress of Racial Equality (CORE), a civil rights group founded in 1942. Innis was the keynote speaker at the Montana Petroleum Association’s Annual Appreciation Luncheon.

“The assault we have seen on the energy industry, by the green mafia, has translated into an assault on you,” said Innis. He explained that the availability of “affordable energy impacts your ability to enjoy or observe your civil rights. . . It impacts your ability to climb the economic ladder of opportunity.”

The Waxman-Markey has passed the US House of Representatives and awaits consideration in the US Senate. The bill would institute a system of carbon credits (a fee paid to the government by energy users) in proportion to the amount of carbon dioxide they emit. The credits could be bought and sold among businesses, but the upper limit on emissions allowed would be incrementally reduced over a period of years, reducing their availability which would drive up their value or cost. Ostensibly, the purpose of the legislation is to reduce the level of carbon dioxide in the atmosphere which is believed by some to cause global warming. By increasing the cost of using energy, people will not be able to afford as much and therefore will have to use less energy and emit less carbon dioxide

“Energy is the master resource,” said Innis, “It makes all others possible. It allows for homes, food, life liberty and the pursuit of happiness.”

“Laws that restrict access and drive up costs are not good for life, liberty and the pursuit of happiness,” he continued. When they drive up the cost of everything,  “those who get hurt disproportionately are the poor and disadvantaged.”

Innis pointed out that while the focus of “cap and trade” policies are to lower the standard of living, it is higher standards of living that allow more efficient use of energy. The average median-income American family spends 5 cents on the dollar for energy. The average low-income family spends 20 cents on the dollar. Those that fall below the poverty line spend 50 cents on the dollar

The campaign behind the promotion of “cap and trade” is well funded by “elitists who claim they are protecting the environment from greedy corporations and foreign oil, but the reality is the Waxman -Markey Climate bill is an assault on the most vulnerable in our country,” said Innis, leaving them with fewer jobs and a reduced standard of living.

Innis quoted a study by the National Association of Manufacturers that shows an overall loss of between 1.8 million and 2.4 million jobs, should the legislation be implemented. It means an increase of between $200 to $1300 per year per household in increased energy costs.

Pointing out that other factors will nullify any carbon dioxide reductions that might result from the caps and imposed costs, Innis said, “The extreme green efforts are not made to save the planet.” He pointed out that European countries have made it “abundantly clear” that they plan to double coal production and are reversing their past cap and trade policies, which have not worked.

Brazil has discovered massive oil reserves and they plan on developing them for their own use.

India and China have said “thanks but no thanks” to cap and trade, and they feel they have a moral responsibility to improve the standard of living for their people, said Innis.

All these things will overwhelm any possible declines on carbon emissions; so, while the impact on the climate is “dubious” said Innis, “it’s economic impact is more definitive and absolute.”

The practical results of the legislation will be to push as many people as possible onto government welfare programs, he said. “For the poor it will be a matter of choosing between paying for heat or food. It’s a defacto regressive tax on the poorest of Americans.”

Recognizing the implication of the policies, a coalition of third party groups, including CORE, have formed to oppose what Innis called a crusade of “David vs. Goliath” proportions. While the foundations supporting the measure have billions of dollars “to fuel into the green mafia,” the coalition has “the moral high ground…It has the ability to galvanize people of all color and to push back against the green mafia.”

In large part, because of their efforts, according to Innis, Waxman-Markey has been stalled and is predicted to be defeated in its current form. But, “this is a decades-long fight, so even if we succeed, you can be sure they will implement many of the provisions of the legislation through executive fiat and bureaucratic mandates.”

He said that he has been puzzled that the coalition has not been embraced by the energy industry, even while “the media and the hard left have called us ‘shills for the energy industry.’”

Innis made reference to a DC lobbying firm which is now being investigated for having fabricated support of third party organizations through forged letters. Why didn’t they contact CORE or organizations like the Black Chamber of Commerce, which are real third party groups opposed to the legislation pondered Innis.

He called the fabrications “disgusting” and said it was a “slap in the face to CORE, and gave the radicals exactly the kind of ammunition they needed.”

[The firm was  Bonner & Associates and some media have speculated that they were acting on behalf of the The American Coalition for Clean Coal Electricity.]

Innis urged the development of all energy resources, domestically, but until more technology is developed that has to mean a focus on traditional fossil fuels. There’s a huge gap between the energy that renewables can deliver and the energy needed. About 0.5 percent of the US energy is produced by wind and solar and 93 percent comes from hydrocarbon and nuclear.

“We have centuries’ worth of oil, gas, oil shale, coal and uranium – and we can develop them without harming the environment,” he said.



Lowest Residential Mover Rate

Americans are moving less according to the U.S.Census Bureau. The national mover rate declined from 13.2 percent in 2007 to 11.9 percent in 2008 — the lowest rate since the bureau began tracking these data in 1948.

In 2008, 35.2 million people 1 year and older changed residences in the U.S. within the past year, representing a decrease from 38.7 million in 2007 and the smallest number of residents to move since 1962.

“Even though the number of people who changed residence in 2008 dropped by 3.5 million from the previous year, millions of Americans continue to move,” said Tom Mesenbourg, acting director of the U.S. Census Bureau.

By region, people in the South (13.5 percent) and in the West (13.2 percent) were likeliest to move in 2008. The Midwest and the Northeast had mover rates of 11.1 percent and 8.2 percent, respectively. In 2008, the Midwest saw the largest decline in its mover rate from 2007.

Read more: Lowest Residential Mover Rate

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