the newsletter of tbd consultants - 1st qtr 2010

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In this Edition

A Broader Dimension
Sustainability Base
How Green Is My Building?
Recession - One Year On

Construction Management Specialists

111 Pine Street, Suite 1315
San Francisco, CA 94111
(415) 981-9430
806 West Pennsylvania Ave.
San Diego, CA 92103
(619) 550-1187
8538 173rd Avenue NE
Redmond, WA 98052
(206) 571-0128


A Broader Dimension

With this edition of our newsletter we re-launch it with a new name. Please pardon us as we deviate from our normal editorial policy to tell you something about ourselves and the reason for the name change.


Sustainability Base

This is the story of a building that illustrates the ups and downs of the construction market and the growth of the green-building movement.


How Green is My Building?

We all know the LEED rating system for green buildings, but is that the only way to measure the "greenness" of a building? Here we look at some of the concerns regarding measuring how green a building really is.


Recession – One Year On

It is now one year since our “Recession Special” newsletter, and although the NBER (National Bureau of Economic Research) has not officially declared the end of the recession, it is anticipated that they will backdate the end to sometime in the latter half of 2009.

But it doesn’t feel like the recession has gone away, and looking at our bid index we are not seeing any real improvement, although it is looking as though that market has bottomed out. But seeing that bid prices were already at or below cost in many instances, one could hope that they wouldn’t drop further.

It was two years after end of 2001 recession before jobs began to be added on a consistent basis, and the current unemployment levels are expected to peak in mid 2010. Jobs will only begin to be added when employers are sure demand has returned. Lack of access to credit, especially for small business, will also be a deterent to adding jobs.

The following chart is based on statistics from the Bureau of Labor Statistics:

Noting a kind of mirror image effect at the right-hand side of the bid index graphic and the unemployment chart, we tried inverting the unemployment graph and starting it at the same point as the bid index chart. The result was as follows:

Without the unemployment situation improving, and without the related improvement in consumer confidence, the likelihood of any immediate or near term improvement in the construction industry is slim. On top of that is the fact that local and state authorities are suffering from reductions in tax incomes, so have less money for development work, and although the $130 billion ARRA construction money is having some effect in adding projects (or more frequently helping to keep projects moving that would otherwise be stopped), that the effects from that stimulus are going to tail off before long. As a consequence of these points, it becomes obvious that any recovery is going to be drawn out.

You will notice in the bid index/unemployment comparison that while the two follow the same sort of path, the bid index starts dropping later than the corresponding change in unemployment. The reverse is also likely to prove to be the case as well, with the unemployment situation improving before the construction market, and related bid levels, pick up. Unemployment is often called a trailing indicator, which must mean that the construction market is a real tail-end indicator.

But Congress is looking into ways to continue boosting the economy, with the emphasis on jobs. And since the construction industry is one of the top industries as far as unemployment goes (getting close to 20%), we can hope benefits accrue.

So, 2010 does not look like rounding out the first decade of the new millenium on a high note, at least as far as construction is concerned, but we should start to see some movement in the right direction. And we certainly wish our readers all the very best for the New Year.



Design consultant: Katie Levine of Vallance, Inc.