Enr 3q Cost Report 2013
description
Transcript of Enr 3q Cost Report 2013
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1913 1918
19231928
19331938
19431948
19531958
19631968
19731978
19831988 1993
19982003
20082
1
CONSTRUCTION
COST
INDEXHISTOR
Y
(ANNUALAVERA
GE)
BUILDINGCOS
T
INDEXHISTORY
(ANNUALAVERAG
E)
9,552
(0
100
5,285
100
SKILLED
LABOR
38%
STEEL
38%
LUMBER
17%
CEMENT
7%
SKILLED
LABOR
65%
STEEL
24%
LUMBER
9%
CEMENT
2%
SHIFTING TIDE OF INFLATION
REDISTRIBUTED THE INDEX COMPONENTS
1913 2013
BUILDING COST INDEX
A Hundred Years of
ENR Cost IndexesA century of cost leadership through depression and expansionWhenever anything or anyone turns 100, its a big deal.
With a base year of 1913, ENRs cost ind exes have
joined that category after a century of measuring con-struction cost fluctuations and reflecting the industrys most important trends. The
use of the cost indexes has grown almost as dramatically as the indexes themselves.
They captured, for example, the explosion in union wages that caused costs to jumpin the 1970s, and they tracked the record drop in steel prices and its effects on overall
uses the ENR Construction Cost Index
to adjust our connection fees annually forinflation in construction of capital proj-
ects. The fees are used to pay for water
and sewer facilities needed for system ex-
pansion to accommodate new users.Mike Clark, senior project manager in
Oklahoma Citys Public Works Dept.,
says, Over the last three years, I have
used the Construction Cost Index as aninflation-type index for approximately 30
procurement contracts.
Says Leonard J. Goodwin, public-works director for Springfield, Ore., We
use the ENR CCI as an inflation adjust-
ment factor for our system development
charges [impact fees]. Our methodologyallows us to administratively increase fees
by the change in the CCI. I think a fair
number of jurisdictions in Oregon dothe same.
Federal agencies also find the indexes
valuable. T he indexes are an ex pertisemultiplier. Regularly publishing the
data from multiple locations not only
shows industry and cost trends but also
allows comparison of my personal andprofessional knowledge of the local cost
data with the indexes, says Rick Rus-
sell, cost engineering team lead, U.S.
Army Corp s of Engin eers, Portl and,Ore. The CCI and [Building Cost In-
dex] provide expertise to make judg-
ments for costs among a wide variety ofmaterials and projects. Although the
indexes are not an exact match to t he
projects in my job, they help by provid-
ing vetted background information onthe cost components.
The ENR indexes are an excellent
By Scott Lewis with Tim Grogan
3Q COST REPORT 100TH ANNIVERSARY
enr.com Septemb er 30, 2013 E
construction costs in 2004.
Over the years, ENR has labored to
ensure the indexes are accurate, objective,transparent and flexible so that they can
serve as a benchmark to assess the health
of the construction industrys most impor-
tant sectors. This includes deep-diveanalysis that interprets the numbers and
tells readers the stories behind them.
These days, they help many municipalofficials make the most informed decision
they can about their costs of engineering,
construction and maintenance work.
John Pedersen, district engineer withthe Mammoth Community Water Dis-
trict in California, says, The MCWD
1913-2013
SOURCE:MCGRAW HILL CONSTRUCTION RESEARCH & ANALYTICS/ENR
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resource. I have used them to accuratelyescalate contract pricing for the future
where the Corps Index is not really ap-
plicable. The Corps cost index system is
more long term. This is not as current and
accurate as using the ENR for short-term
trends and projections, says Jerry Welch,
chief of the Cost & Relocations Team,
U.S. Army Engineer District, Memphis.ENR indexes are very helpful as they
represent actual market conditions based
on labor and materials. I have used ENR
indexes on various civil and MILCON
projects as these indexes catch up to price
fluctuations on actual materials rather
swiftly. During the past decade, steel, ce-
ment, lumber and copper prices saw un-usual swings, and ENRs [Materials Cost
Index] was my first choice to develop es-
calation factors for projects that required
use of these materials, says Mukesh Ku-
mar, chief cost engineer with the U.S.
Army Engineer District, New York.
3Q COST REPORT 100TH ANNIVERSARY
Elsie Eaves (1898-1983): Cost Pioneer
Elsie Eaves joined ENR in 1926, five years
after the magazine introduced its Con-
struction Cost Index, but she soon made
them her own. Elsie Eaves was the one who
made ENRs cost indexes the industry standard,
says Ken Humphreys, the retired ex-
ecutive director of the American As-sociation of Cost Engineers, of which
Eaves was a founding member, in
1956. She was one of the first women
to become a civil engineer and played
a prominent role in the construction
industry, but none more important
than developing the esteem and relevance of
ENRs construction cost indexes.
For three decades, she was the manager of
ENRs Business News Dept., where she pio-
neered ways of measuring the market for con-
struction materials and wages. Eaves made the
first national inventory of municipal and indus-
trial sewage-disposal facilities, in 1929. From
1933-35, she organized and directed an inven-
tory of needed construction projects that could
go ahead if federal funding were provided. This
helped Congress pass the Federal Loan-Grant
legislation used to revive construction activity
and break the Great Depression.
At the height of her career, she over-saw 25 members of ENRs Business
News Dept., Construction Methods &
Equipment magazine and 125 construc-
tion-project field reporters collecting
information.
In 1927, Eaves became the first
woman to be a full member of the American
Society of Civil Engineers. After retiring from ENR
in 1963, she served as an adviser on housing
costs to the National Commission on Urban
Problems and, in her role as a International
Executive Service Corps volunteer, to the gov-
ernment of Iran on construction cost indexes.
By Scott Lewis
EAVES
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C
ant quite figure out where prices are
going? Prices tied to the housing
market, such as lumber, plywoodand gypsum wallboard, are bouncing back
from record lows with impressive year-to-
year gains; however, they remain below
previous highs. Steel prices are dropping,
and everything else is going sideways.
Once again, the U.S. Congress, fighting
over the budget, is threatening to throw
a monkey wrench into the works by eithershutting down the federal government or
refusing to raise the federal debt ceiling.
Either step could derail a fragile recovery
and drastically change the coming years
cost picture.
For now, economists are still optimis-
tic the recovery will continue to gain
McCarren, construction materials analyst
for the Washington, D.C.-based forecast-
ing firm IHS Global Insight. However,
there will be some dips, he adds. For
instance Global Insight has downgraded
construction materials. Prices will
continue to advance, but the rate of
increase is going to slow, says McCarren.
Products such as lumber, plywood and
wallboard are not going to be as volatile
3Q COST REPORT ECONOMICS
Costs: Hit, Miss and a GuessLumber prices are up, steel prices are down. D.C. politics will determine what comes next.
By Tim Grogan
Cement
SOURCE:BUREAU OF LABOR STATISTICS. FORECAST FOR 2013 BY IHS GLOBAL INSIGHT. ANNUAL PERCENT CHANGE FOR PRODUCER PRICE INDEXES.
10
0
-5
-10
20
15
5
2010 2011 2012 2013
-5.6% -3.5% 0.9%
5.3%
Structural Steel
10
0
-5
-10
20
15
5
2010 2011 2012 2013
1.0%
14.4%
-9.3% -6.1%
Market Drives Cement Prices Up and Steel Prices Down
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housing market. It expects lumber prices
to jump 16.7% this year, following a 7%gain last year. However, it forecasts only
a 4.2% increase in lumber prices in 2014.
Likewise, gypsum-wallboard prices are
predicted to increase just 3.9% next year,
after rising 14.4% in 2013. Plywood
prices are expected to experience a
5.4% increase in 2014, following a 6.0%
increase this year and a 10.4% jumpduring 2012.
The rebound in housing has given
cement producers the marginal demand
needed to raise prices after they took a
big hit during the recession. In August,
the producer price index for cement was
up 4.2% above a year ago, according to
the Bureau of Labor Statistics. GlobalInsight estimates cement prices will end
the year 5.3% higher than in 2012. It pre-
dicts another 4.4% increase next year.
These upticks follow historically large
price declines of 5.6% in 2010 and 3.5%
in 2011. Last year, cement prices
rebounded a modest 0 9%
CONSTRUCTION MATERIALS PRICE MOVEMENT IN 2013AUG.MAYMARCH JULYFEB. JUNEAPRIL
AGGREGATES MONTHLY % CHG. +0.7 +0.3 +0.5 0.5 +0.2 +0.4 +0.6 0.5
ANNUAL % CHG. +2.7 +2.3 +2.0 +1.2 +1.7 +2.0 +1.8 +1.4
ALUMINUM SHEET MONTHLY % CHG. 0.1 +0.2 +0.1 2.1 0.9 0.0 1.1 0.3
ANNUAL % CHG. +1.0 0.6 1.9 3.3 2.2 1.6 2.2 1.8
ASPHALT PAVING MONTHLY % CHG. +0.5 0.2 0.1 0.6 +0.6 0.3 +0.7 +0.8
ANNUAL % CHG. +3.4 +1.0 +0.7 1.7 0.9 1.7 0.9 +0.5
CEMENT MONTHLY % CHG. +3.4 0.2 +0.1 +0.8 +1.3 0.4 0.0 0.6
ANNUAL % CHG. +5.0 +4.6 +5.1 +4.8 +5.4 +4.9 +5.2 +4.2
CONCRETE PIPE MONTHLY % CHG. +0.4 +0.2 0.0 +0.2 0.1 +0.4 +0.7 +0.1
ANNUAL % CHG. +4.8 +5.0 +4.3 +4.5 +3.6 +4.2 +4.4 +4.5
COPPER PIPE MONTHLY % CHG. 0.4 +0.6 2.5 3.1 2.5 0.4 2.2 +3.9
ANNUAL % CHG. +2.7 2.5 5.7 7.1 7.3 3.3 5.9 1.5
DIESEL FUEL MONTHLY % CHG. +0.5 +7.3 6.2 0.8 3.2 0.7 +1.9 +2.3
ANNUAL % CHG. 0.9 +4.0 6.8 6.2 5.4 +3.6 +4.4 1.6
DUCTILE- IRON PIPE MONTHLY % CHG. 0.0 +0.4 +0.4 0.2 0.2 0.3 +0.2 +0.1
ANNUAL % CHG. +0.8 +0.4 +0.8 +0.5 +0.3 0.7 0.5 0.2
FABRICATED STEEL MONTHLY % CHG. 0.2 0.0 0.0 +0.2 0.0 0.2 +0.1 +0.1
ANNUAL % CHG. +0.3 0.1 0.3 0.6 0.7 0.9 0.0 +0.1
GYPSUM PRODUCTS MONTHLY % CHG. +10.5 +3.2 +1.1 +0.7 0.1 +0.1 1.6 +0.3
ANNUAL % CHG. +18.7 +15.6 +15.7 +17.1 +16.5 +13.7 +12.4 +13.1
LUMBER, SOFTWOOD MONTHLY % CHG. +6.9 +3.8 +5.2 +2.4 7.2 7.6 2.3 +2.6
ANNUAL % CHG. +25.4 +27.5 +30.3 +32.5 +16.7 +8.0 +9.9 +8.4
PLYWOOD MONTHLY % CHG. +2.5 +1.3 +2.0 +1.6 2.8 +1.9 4.8 0.3
JAN.
3Q COST REPORT ECONOMICS
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Confidence Remains HighThat the Market Is RecoveringFew think the market is booming, but most believe it is headed in the right direction
Like Charlie Brown trying to kick that
football, construction executives in
recent years have hoped for different
resultsevery year hoping that this would
be year the industry would bounce back
from the prolonged doldrums that began
in 2008. But just like Lucy snatching back
the pigskin, by the third quarter of eachyear, economic reality would set in and
market confidence would plummet.
The ENR Construction Industry
Confidence Index survey has tracked the
trend. In 2010, for the first time, the CICI
index entered positive territory in the sec-
ond quarter only to plummet back to a
ceived recovering market. In
the second quarter, the index
hit 69, an indication of a
growing market. Now,
ENRs most recent CICI
survey shows the indus-
try still believes the
market is experiencing a
sustained recovery.
The third-quarter 2013
CICI did decline, but only by two
points, to 67 on a scale of 100, which still
represents a growing market. A vast ma-
jority of the 375 executives of large con-
struction and design firms responding to
out to more than 3,000 U.S.
firms on ENRs lists of the
leading contractors, sub-
contractors and design
firms. The latest results
are based on a survey
conducted from Aug. 27
to Sept. 16.For the second quarter
in a row, the surveyed indus-
try executives believe nearly all the
market sectors measured by the CICI are
now in a growth mode. For the CICI sur-
vey, execs were asked to assess current and
future market prospects in general and
By Gary J. Tulacz
3Q COST REPORT CONFIDENCE SURVEY
67
INDUSTRY
CONFIDENCE INDEX
DECREASES TWOPOINTS
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3Q COST REPORT CONFIDENCE SURVEY
Quarterly Cost Report Confidence Index
SOURCE:MCGRAW HILL CONSTRUCTION RESEARCH & ANALYTICS / ENR.
10 11 12 13
60
45
30
15
00
Q2 Q3Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
58
69 67
43
51
46
3742
56
50 50
6475
the highest rated, with a CICI rating of
81, followed by multi-unit residential and
power, both at 74, and the environmental/
hazardous-waste market, at 67.
The K-12 education market and the
entertainment/theme parks/cultural
market were both judged to the be the
weakest, with a rating of 55. The biggest
drop in ratingsdown five pointswas
multi-unit residential, last quarters
strongest market Many executives
the third quarter, 39.1% said project
financing was somewhat easier or
much easier than it was six months ago,
up from 37.6% in the second quarter and
only 31.9% in the first quarter. Only 9.6%
said project financing was tougher to
come by in the third quarter.
Many survey respondents commented
that financial institutions are beginning
to open up to project financing. This loos-
ening has brought back developers to the
How Different Types of FirmsView the Overall Market
Improving DecliningStable
Designers
Present 3-6Months
12-18Months
3 Years
General Contractors,
Construction Managers,Engineer-Constructors
46% 36%
7% 11%
10%
55%
8%
49%
6%
37%
6%
38%
47% 53%
33% 39%
8% 8%
59% 53%
63U.S. ECONOMYS CICI RATING,which is four points lower than the CICIsurvey part icipants level of optimismabout the construction market.
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Unemployment Rates Decline,Opening Door for Wage HikesConstruction recovery leads to modest wage gains for union and merit-shop workers
As the construction industry outlookgradually improves, craft workers
are starting to see modest improve-ments in their compensation. However,
in light of continuing concerns over ailingpension funds and rising health-care
costs, many union laborers are getting
meager wage increases in their checks.
Carey Peters, executive director of theConstruction Labor Research Council,
says that, this year, union labor continuesto see a modest upward trend in compen-sation increases. Based on agreements
through this past August, total compensa-tion for union labor was up by 2 2%
companies reported that they plan to
freeze wages this year, according to the
2013 Merit Shop Wage and Benefit Sur-
vey compiled by Personnel Administra-
tion Services, Saline, Mich. That marks acontinued slide, from 12% wage freezes
last year, 18% in 2011, 33% in 2010 and
42% in 2009. All good indications are
that contractors are feeling the need to dosomething for their employees, says
Jeff Robinson, president of PAS.
Wages for all journeymen rose 2.7%
from 2012 to 2013, according to the sur-
vey. But Robinson says that statistic is
skewed by much higher increases in craftsthat work in very active sectors, such as
heavy industrial construction, heavy civil,petrochemical and shipbuilding. For ex-
ample, between 2012 and 2013, welders
wages rose by 7.8%, plumbers by 9.6%,
By Bruce Buckley
3Q COST REPORT LABOR
OPEN-SHOP WAGE RATE FOR JOURNEYMEN
BRICKLAYERS CARPENTERS CEMENT MASONS ELECTRICIANS
RATE RATERATE RATEFRINGE FRINGEFRINGE FRINGE
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pipefitters by 6.2% and structural iron-workers by 12%. If there were large
increases in these crafts, some of the civil
trades obviously experienced low changesof, say, 1% to 2%, from 2012 to 2013, to
maintain that 2.7% overall, he says.
While merit-shop labor is seeing somewage improvements, many union workers
continue to see health and pensiondemands gobble up much of what would
otherwise go on their checks.
Ed Kommers, executive director of
MCA of Western Washington, Seattle,
says that, through the recession, local
plumbers and pipefitters saw modest
increases go to benefits, while wages wereheld down.
We were balancing the pressures of
increased costs to benefit plans versus theinability of the market to absorb a higher
cost of labor, Kommers says.
As plumbers and pipefitters head into
negotiations for a new agreement in May,Kommers says he expects wages to be a
putting everything on the benefit side be-cause there is inflation, he says.
People need to get money on their
checks, especially if they are not getting
the hours they used to get.
Other regions are seeing a similar
trend. In May, the Carpenters District
Council and the Builders Association,
both of Kansas City, Mo., agreed to a five-year agreement that offers a 2.25%
increase for the total package. The first-
year increase of 75 was allocated entirelyto benefits: 25 for the health-and-welfarefund and 50 for the pension fund.
In addition, the carpenters union
agreed to a definition of residential/lightcommercial work, with lower compensa-tion rates for those sector workers.
The settlement is essentially a fringe
fund increase and gets us to the parity thatwere needing, says Don Greenwell,
president of the Builders Association.
For the New England Regional Coun-cil of Carpenters the union continues to
pension funds in the hopes of realizingsome economies of scale, says Mark
Erlich, executive secretary-treasurer. He
estimates the plan could save up to $1 mil-lion in fund fees.
Meanwhile, Erlich says the carpentersunion is monitoring the possible effects
of the Affordable Care Act on health
plans. Theres a lot of uncertainty aboutwhat the ultimate impact of ACA will be,he says. Our health plans have good re-
serves, but now there is concern that theremay be unfunded mandates.
Erlich says that while metro areas suchas Boston are booming as they come outof the recession, he expects that future
agreements in the region will follow the
national trend of gradual increases.
Even though the market is heating
up, you wont see dramatic compensationincreases, he says. People are cautious
coming out of the recession. The good
news is that health funds and pensions arein better shape than they were Weve
+2.2WAGE INCREASE. Estimatedaverage annual wage increase forunion workers in 2013, according toCLRC.
3Q COST REPORT LABOR
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3Q COST REPORT LABOR
HOURLY UNION PAY SCALES BY CITY, SEPTEMBER 2013
CLEVELAND DENVER KANSAS CITYDALLAS DETROIT LOS ANGELES MINNEAPOLIS
RATE RATE RATE RATE RATE RATE RATE% CHG. % CHG. % CHG. % CHG. % CHG. % CHG. % CHG.
BRICKLAYERS 51.16 +1.5 33.69 NA 32.69 0.0 52.16 +2.3 53.19 0.0 50.46 +1.4 50.26 +2.0
CARPENTERS 43.87 0.0 32.10 +0.3 36.24 0.0 52.30 +2.3 55.13 0.0 51.99 +1.0 52.35 +2.0
CEMENT MASONS 44.70 +1.9 26.48 0.0 34.70 0.0 46.08 0.0 48.55 0.0 52.11 +5.3 48.91 0.0
ELECTRICIANS 55.29 +1.9 35.35 0.0 44.63 +1.0 61.30 0.0 49.54 0.0 63.72 +6.9 52.15 0.0
ELEVATOR CONSTRUCTORS NA NA NA NA 65.28 +3.8 70.40 +8.9 NA NA 77.46 NA 68.76 +3.0
GLAZIERS 49.64 NA 23.50 0.0 36.19 +2.7 46.21 +1.1 41.92 0.0 59.39 +2.5 49.70 +2.0
INSULATION WORKERS 53.78 +3.6 NA NA 43.01 +3.0 59.05 +7.5 52.89 0.0 53.30 NA 64.93 0.0
IRONWORKERS
REINFORCING 49.08 0.0 32.15 0.0 41.87 0.0 57.89 +0.7 55.50 +2.5 61.87 0.0 55.35 0.0
STRUCTURAL 50.39 +1.5 32.15 0.0 41.87 0.0 57.62 +0.3 55.50 +2.5 61.87 0.0 54.96 +1.0
LABORERS
BUILDING 41.32 NA 18.09 0.0 25.97 0.0 42.44 +0.1 43.93 0.0 47.43 NA 43.99 0.0
HEAVY AND HIGHWAY 52.55 0.0 18.09 0.0 25.97 0.0 42.44 +0.1 43.93 0.0 47.43 NA 46.29 +5.2
MILLWRIGHTS 51.29 0.0 NA NA 40.05 0.0 58.81 NA 51.50 0.0 52.49 +5.0 53.56 0.0
OPERATING ENGINEERS
CRANE OPERATORS 48.38 0.0 34.05 0.0 34.10 0.0 63.72 +3.8 53.80 0.0 61.90 +8.2 51.14 0.0
HEAVY EQUIPMENT 49.45 +0.9 34.05 0.0 33.34 0.0 NA NA 43.81 0.0 61.90 +8.2 49.49 0.0
SMALL EQUIPMENT 45.04 +5.3 33.05 0.0 33.19 0.0 NA NA 43.07 0.0 61.45 +8.2 48.40 0.0
PAINTERS 39.63 0.0 NA NA 32.05 0.0 47.34 0.0 43.28 +0.9 41.27 +4.8 50.20 0.0
PIPEFITTERS 56.92 0.0 43.94 0.0 49.87 0.0 64.66 +2.6 58.30 +3.3 64.41 NA 65.09 +4.9
PLASTERERS 43.30 +1.4 NA NA 34.70 0.0 44.99 0.0 45.65 0.0 50.70 +5.7 54.30 +4.6
PLUMBERS 45.78 0.0 39.79 +3.0 49.87 0.0 62.86 +2.4 57.54 +1.0 64.41 NA 63.86 0.0
ROOFERS 44.78 +3.4 NA NA 26.63 0.0 52.89 0.0 48.86 0.0 46.52 +5.6 48.74 0.0
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ALEXA NDRIA BUFFALO HOUSTONALLENT OWN COLUMB US INDIANA POLIS MEMPHI S
RATE RATE RATE RATE RATE RATE RATE% CHG. % CHG. % CHG. % CHG. % CHG. % CHG. % CHG.
HOURLY UNION PAY SCALES BY CITY, SEPTEMBER 2013
BRICKLAYERS 36.20 +1.5 45.25 0.0 51.38 +2.8 42.57 +2.9 32.92 +1.4 39.98 0.0 32.50 0.0
CARPENTERS 33.44 0.0 54.18 +1.1 55.02 +2.9 38.84 0.0 31.42 +3.6 43.86 +2.1 31.54 +3.0
CEMENT MASONS 36.73 0.0 47.53 NA 53.72 +2.3 40.83 NA 27.77 +0.7 38.00 0.0 25.20 0.0
ELECTRICIANS 54.30 +0.5 52.96 +1.0 56.70 +4.3 46.18 +3.7 35.78 +0.4 50.04 +2.9 35.76 +2.2
ELEVATOR CONSTRUCTORS 68.35 +0.1 71.44 +2.3 72.16 +0.8 71.21 +4.9 65.91 +1.2 70.55 +0.1 65.28 +1.2
GLAZIERS 37.25 +4.2 45.54 +4.0 42.07 +1.5 33.62 +2.1 25.53 0.0 38.68 0.0 22.49 0.0
INSULATION WORKERS 46.73 +0.5 54.71 +1.9 49.64 +3.5 40.87 +3.4 29.19 0.0 46.68 +1.9 34.83 +6.7
IRONWORKERS
REINFORCING 46.04 +3.3 57.55 0.0 52.30 +1.8 45.36 +1.7 33.50 0.0 47.99 +2.1 34.11 0.0
STRUCTURAL 46.04 +3.3 57.55 0.0 52.30 +1.8 45.36 +1.7 33.50 0.0 47.99 +2.1 34.11 0.0
LABORERS
BUILDING 27.35 0.0 38.84 +1.2 48.28 +3.5 34.79 0.0 22.54 +4.4 34.63 +1.6 20.50 +4.9
HEAVY AND HIGHWAY 27.35 0.0 38.84 +1.2 48.28 +3.5 34.79 0.0 22.54 +4.4 34.63 +1.6 20.50 +4.9
MILLWRIGHTS 40.16 +3.5 59.97 +2.5 56.37 +2.8 45.65 0.0 40.10 +2.3 43.86 +2.1 35.01 NA
OPERATING ENGINEERS
CRANE OPERATORS 40.85 +2.2 53.82 0.0 59.48 0.0 44.99 +2.6 38.75 NA 46.23 +2.4 32.82 0.0
HEAVY EQUIPMENT 40.85 +2.2 53.82 0.0 59.48 0.0 44.99 +2.6 38.75 NA 46.23 +2.4 32.82 0.0
SMALL EQUIPMENT 40.10 NA 53.34 NA 58.65 0.0 43.83 +2.7 35.60 NA 41.23 +2.7 32.82 0.0
PAINTERS 42.50 0.0 26.87 0.0 46.37 +4.1 34.81 +0.6 25.71 +3.3 36.13 +1.3 22.66 +4.6
PIPEFITTERS 55.69 +1.5 68.97 +5.2 53.23 +3.5 53.37 0.0 39.79 +2.6 49.01 +1.1 43.72 +2.9
PLASTERERS 36.73 0.0 47.54 NA 48.58 0.0 38.60 0.0 21.98 0.0 37.52 0.0 25.20 0.0
PLUMBERS 53.92 +0.5 64.74 +3.5 53.23 +3.5 53.37 0.0 39.79 +2.1 49.01 +1.1 36.32 0.0
ROOFERS 37.08 +4.2 57.50 +2.9 43.45 +1.8 39.05 +3.0 27.90 +4.6 34.00 0.0 21.78 0.0
3Q COST REPORT LABOR
-
5/28/2018 Enr 3q Cost Report 2013
11/11
Insurance for workers compensation isgetting pricier amid skyrocketing med-
ical costs, industry losses and a revisedexperience rating from the NationalCouncil on Compensation Insurance that
doubles split-point calculations, or cutoff
thresholds, for claims, to $10,000 from$5,000 in 2013. Eventually, that splitpoint will climb to $15,000 in 2015. Thenew formula skews costs for wor kerscompensation more toward the frequencyof accidents than their severity.
A change to the experience rating was
necessary, says Tom Boudreau, vice pres-ident of The Hartfords constructionpractice. But the challenging economicenvironment for the construction indus-try means there needs to be even greateremphasis on business planning goingforward, as changes to a contractorsinsurance costs may impact its ability t o
compete for projects, Boudreau says.As a result, contractors face mounting
pressure to remain accident-free sinceowners and bonding companies rely uponexperience-modification factors for judg-
ing skill, risk, performance and liability.An experience-modification rate of 1.0 isconsidered the industry average, despiteformula revisions. Additionally, experi-ence-modification factors are used asproject prequalifiers, driving greaterinvestment into safety programs and moreunreported out-of-pocket claim settle-ments to keep ratings and premiums low.
Contractors can expect a 10% to 25%premium rate increase next year due tounderwriter losses and medical industrycosts, says Jeffrey W. Cavignac, presidentof Cavignac & Associates, San Diego.Ultimately, through the experiencemodification, you will pay for youractual claims.
The bill wont be cheap. The explosivepopularity of medical treatments and pre-
scription drugs as stopgap solutions forpersistent health issues, including obesityand diabetes, and detrimental lifestyle
choices have tripled average client costsover the past 20 years, says th e NCCI.
Jobsite opiate and legal prescriptiondrug use is a big issue, says Karen Keniff,head of large construction for ZurichNorth America. It can lead workers toharm themselves and others.
We see an increase in workers costclaims when economic recovery begins,Keniff says. That is always prevalent. A
greater demand for labor and a growingsense of job security could mean morecontractor claims since, fearing employer
reprisal, many workers did not report in-juries during the recession, she says. Fur-
ther, a higher incident rate exists amongnew hires during their first 60 days on the
job, and Ke niff expec ts to se e more ofthese types of claims as the constructionindustry rebuilds its workforce.
A matur ing wor kforce onl y exacer-
bates those problems. The average age ofconstruction workers jumped to 41.5
years old from 36 years old between 1985
and 2010, reports the Center for Con-struction Research and Training.
As construction companies utilize anaging workforce, we expect a greaterfrequency in medical claims, as opposedto indemnity, as a proportion of workers,
says Joseph Russo, senior vice presidentof Aon Risk Services construction group.Contractors who do not manage theclaims and push for settlements willget hurt.
Indeed, a demographic shift in thelabor force could spell trouble. Senior
workers and new, inexperienced hires can
present potential jobsite risks that resultin costly claims, says Russo.
For example, over the past three years,
there has been an exodus of experiencedconstruction workers, and during the on-
going recovery, the industry has been ableto hire back only about a third of thosethat left, says Kenneth D. Simonson,
Associated General Contractors of Amer-ica chief economist.
3Q COST REPORT INSURANCE
Comp Costs Rise
By Tony Illia
enr.com September 30, 2013 EN
CARPENTRY
Detached one- and two-family dwellings 14.89 12.57 13.25 17.74 11.80 20.03 18.69 15.75 16.63 20.66 22.33 20.50 12.62 10.17 29.38 18.24 22.98 7.98 13.92 11.58 11.05
Dwellings:three stories or less 15.05 12.57 13.25 17.74 11.80 20.03 15.50 15.75 12.28 18.77 20.09 20.50 16.17 10.78 20.52 18.24 21.59 7.98 12.93 13.40 7.41
Installation of cabinet work,interior trim 15.46 6.63 6.38 11.51 9.01 10.50 13.18 5.88 10.51 8.49 10.74 7.52 10.89 11.05 13.30 13.48 10.49 6.58 5.71 11.39 6.14
CONCRETE
Work:floor,yard or sidewalks 10.15 5.33 6.35 14.47 6.16 10.96 14.30 6.31 23.31 5.71 10.94 7.67 15.93 9.05 8.90 12.18 5.94 7.10 4.52 13.92 3.86
Construction connection with bridges or culverts 20.62 7.74 10.76 18.47 7.53 11.49 21.02 8.27 25.97 16.23 13.78 15.26 12.56 14.89 16.20 17.77 15.35 7.10 5.62 12.13 8.15
E LECTRICAL WIRING WITHIN BUILDING 4.33 3.63 4.10 7.21 4.50 5.15 5.13 4.68 7.69 7.52 7.60 4.70 6.21 4.49 9.11 4.47 5.87 4.68 3.20 3.97 3.49
EXCAVATION
ROCK EXCAVATION AND DRIVER 8.17 7.23 6.61 13.03 8.79 11.42 10.83 4.59 11.90 10.64 12.05 8.60 9.33 9.52 10.73 8.50 11.40 6.25 7.05 9.35 5.64
GRADING OF LAND NOC AND DRIVER 8.17 7.23 6.61 13.03 8.79 11.42 10.83 4.59 11.90 10.64 12.05 8.60 9.33 9.52 10.73 8.50 11.40 6.25 7.05 9.35 5.64
GL AZIER, AWAY FROM SHOP 27.36 8.92 6.41 14.26 7.00 11.94 11.21 7.59 18.33 8.91 13.75 10.70 11.36 11.42 12.18 11.11 11.38 6.71 6.91 12.31 5.74
INSULATION WORK 17.59 6.08 7.66 16.48 10.99 12.17 12.63 6.87 10.65 9.38 13.50 10.51 12.92 15.09 11.64 12.82 10.17 8.59 5.89 12.51 5.22
LATHING AND DRIVING 7.99 3.32 4.40 7.89 4.60 6.65 15.13 4.00 12.59 6.02 6.20 6.01 11.84 5.49 7.88 5.75 7.13 3.97 5.22 5.35 5.61
PAINTING OR PAPERHANGING NOC AND SHOP 11.21 6.40 7.84 15.62 6.45 23.00 11.28 7.22 14.67 9.23 12.32 11.44 13.89 10.54 13.54 9.27 8.95 6.64 6.69 8.03 6.73
PILE-DRIVING 23.84 11.94 8.24 13.05 9.04 15.17 15.79 8.98 19.71 12.50 13.85 10.39 16.17 23.30 13.39 12.41 16.42 9.65 6.81 10.98 7.22
PLASTERING OR STUCCO WORK ON OUTSIDE OF BUILDING 11.58 8.34 9.96 14.64 10.46 16.25 18.71 9.67 20.79 9.06 16.86 12.62 12.56 9.96 12.79 11.51 12.01 7.02 7.36 12.40 5.56
PLUMBING NOC 6.23 5.70 5.92 9.10 5.45 9.64 6.96 4.40 10.60 7.04 7.82 5.60 7.87 6.41 7.62 8.25 5.58 4.55 3.50 7.81 3.94
RO OFING, ALL KINDS 50.27 22.15 23.13 55.91 19.57 35.19 40.10 23.93 35.21 27.50 26.18 23.63 31.69 21.55 39.51 9.68 31.16 14.33 20.80 23.56 19.14
SHEET-METAL WORK: SHOP AND OUTSIDE NOC 13.39 6.57 7.64 11.75 10.96 22.04 7.22 6.44 13.27 13.58 15.17 9.63 7.32 11.95 9.20 17.87 11.42 11.28 5.04 9.96 5.52
S TEEL OR IRON ERECTION
Doors and door frame or sash erectionmetal 7.50 8.68 7.78 13.26 7.56 10.37 29.15 7.56 18.84 9.10 12.25 6.87 8.77 6.74 12.99 11.37 11.19 5.89 5.09 9.28 5.58
Construction of dwellings not over two stories 65.35 57.56 41.55 79.73 56.04 90.11 32.89 48.90 84.85 61.36 107.74 22.66 24.86 63.04 77.23 79.35 52.97 17.78 31.28 74.77 33.50 Interior cap work reference carpenterinterior 15.43 6.63 6.38 12.53 9.01 10.50 12.03 5.88 10.51 8.49 10.74 7.52 10.89 11.27 13.30 13.48 10.55 6.58 5.71 9.93 6.83
Frame structures 80.31 20.02 29.02 35.58 25.79 112.53 17.25 34.68 34.52 43.56 36.46 19.64 24.86 32.07 33.19 34.35 20.02 24.75 22.66 40.07 22.97
Frame structures not over two stories in height 92.87 18.82 61.24 55.93 39.03 47.15 27.50 38.27 49.21 56.76 70.67 23.87 24.86 59.21 34.51 37.32 32.85 9.61 29.93 40.14 35.12
TILE WORK: CERAMIC, STONE, MOSAIC OR TERRAZZO 9.03 5.29 7.14 10.40 4.73 11.82 9.55 4.67 10.14 7.54 7.82 6.73 9.33 5.12 6.56 5.15 7.62 4.32 4.23 7.03 3.69
TIME KEEPERS: CONSTRUCTION OR ERECTION 3.02 5.86 8.44 9.98 5.55 7.25 8.64 5.53 8.71 10.70 11.78 9.46 NA 4.43 10.24 7.65 6.25 NA 11.67 9.11 4.56
WATERPROOFING
Brush- or hand-pressured caulking 11.21 6.40 7.84 15.62 6.45 23.00 11.07 7.22 14.67 9.23 12.32 11.44 13.89 10.33 13.54 9.27 8.91 6.64 6.69 7.93 7.28
Trowel interior of buildings 8.20 6.74 7.57 12.93 7.86 10.16 14.39 9.12 9.81 10.51 18.88 9.31 11.84 8.74 13.26 9.12 11.29 6.64 5.04 8.29 5.52
WRE CKING BUILDINGS OR STRUCTURES
Concrete or concrete-encased buildings or structures 8.60 6.57 7.37 11.82 10.96 22.80 15.51 7.82 23.21 13.58 14.84 9.22 15.93 14.66 9.20 15.81 11.70 7.10 6.52 10.28 7.55
Iron or steel buildings or structures 5.72 5.55 9.87 11.19 13.05 32.41 13.63 14.38 18.68 17.39 20.41 12.02 24.86 22.96 13.15 20.79 20.20 9.61 10.78 20.89 10.52
EFFECTIVE ON AUG.30, 2013CLASSIFICATION OF WORK
COMPENSATION INSURANCE BASE
ALA.
MINN.EFFECTIVE ON AUG.30, 2013CLASSIFICATION OF WORK
ARIZ. ARK. CALIF. COLO. CONN. DEL. D.C. FLA. GA. HAWAII IDAHO ILL. IND. IOWA KAN. KY. LA. MAINE MD. MASS.ALASKA
NEB. N.H. N.J. N.M. N.Y. N.C. OKLA. ORE. PA. R.I. S.C. S.D. TENN. TEXAS UTAH VT. VA.MISS. MO. MONT.
RATES
CARPENTRY
Detached one- and two-family dwellings 18.54 13.95 15.85 9.60 26.81 12.56 22.30 8.86 7.31 14.54 41.19 7.59 14.63 28.72 8.25 10.22 13.52 19.90 17.54 13.71 12.75 8.68
Dwellings:three stories or less 18.29 15.80 13.84 9.42 26.81 12.56 22.30 11.36 7.31 9.33 34.80 7.59 12.77 27.33 8.88 10.22 13.52 13.60 12.96 12.66 12.75 8.68
INSTALLATION OF CABINET WORK, INTERIOR TRIM 8.19 9.61 6.88 3.57 00.00 6.91 14.33 6.53 5.65 8.00 11.78 5.93 6.84 18.75 4.41 8.57 5.84 10.41 10.02 9.89 9.96 5.23
CONCRETE
Work:floor,yard or sidewalks 5.88 9.66 4.01 4.08 8.92 9.49 13.10 9.38 5.70 14.04 10.42 5.62 5.99 13.91 5.18 7.66 5.79 7.56 5.32 7.38 6.08 5.33
Construction connection with bridges or culvert 12.99 9.24 7.50 9.52 15.83 12.39 24.24 10.56 6.53 10.74 12.33 5.80 11.60 28.68 5.07 14.15 8.67 9.14 11.93 18.23 10.07 8.70
ELECTRICAL WIRING WITHIN BUILDING 4.23 5.73 4.50 3.02 10.20 4.09 6.54 3.98 3.19 5.65 6.49 4.11 3.88 8.65 2.84 4.47 4.67 5.65 5.24 5.79 5.85 2.84
EVACUATION
Rock excavation and driver 7.35 8.36 5.24 5.12 14.33 7.70 12.35 7.01 7.18 6.59 10.11 4.61 7.25 12.51 4.41 6.88 4.64 9.30 9.42 10.74 8.09 4.35
Grading of land NOC 7.35 8.36 5.24 5.12 14.33 7.70 12.35 7.01 7.18 6.59 10.11 4.61 7.25 12.51 4.41 6.88 4.64 9.30 9.42 10.74 8.09 4.35
GLAZIERAWAY FROM SHOP 8.74 32.61 8.00 6.11 18.55 8.41 16.86 8.82 9.34 9.56 11.17 7.54 9.01 22.02 5.60 9.20 8.14 14.44 9.97 14.96 10.68 9.58
INSULATION WORK 10.81 14.60 11.10 5.75 12.66 10.20 16.90 10.20 5.17 10.12 10.34 4.78 7.67 18.44 6.39 5.82 6.32 9.65 8.89 15.18 9.51 7.78
LATHING AND DRIVING 5.04 11.94 4.05 2.97 13.71 5.54 8.91 9.86 6.42 4.66 7.04 5.75 6.29 12.33 3.43 4.64 3.76 5.72 5.69 5.80 4.87 5.27
PAINTING OR PAPERHANGING NOC AND SHOP 8.67 10.99 9.47 5.56 18.12 7.93 15.35 11.89 4.66 8.86 17.72 5.68 8.43 16.00 4.61 6.76 7.28 13.38 10.03 14.72 8.94 5.09
PILE-DRIVING 10.12 22.07 8.00 7.11 17.83 9.23 16.83 13.73 12.38 NA 13.53 6.72 9.30 21.14 5.67 8.73 8.60 13.53 13.32 12.79 10.66 12.92
PLASTERING OR STUCCO WORK ON OUTSIDE OF BUILDING 12.97 11.05 9.64 6.22 19.29 11.63 25.02 10.56 7.78 9.77 18.58 6.44 10.55 24.94 4.69 8.40 7.06 7.68 11.56 10.97 9.78 10.55
PLUMBING: NOC 4.76 6.96 4.79 3.39 13.43 5.83 8.85 6.08 5.96 5.31 7.26 4.88 4.27 11.96 2.81 6.40 4.88 5.08 4.74 7.70 6.69 3.50
ROOFING, ALL KINDS 29.81 28.67 18.70 13.75 54.51 21.88 41.61 23.59 12.44 17.10 50.96 15.82 22.62 42.02 10.66 19.92 15.37 33.07 22.88 25.71 29.63 30.99
SHEET-METAL WORK: SHOP AND OUTSIDE NOC 8.09 11.50 7.03 4.47 14.44 8.91 17.86 5.76 8.96 11.45 11.62 6.26 11.76 35.68 5.25 12.72 7.13 10.99 11.43 16.31 12.11 5.72
STEEL OR IRON ERECTION
Doors and door frame or sash erectionmetal 6.82 7.97 10.08 6.25 14.16 7.51 15.24 6.71 15.13 9.25 12.72 6.97 12.31 26.00 4.46 5.70 6.20 7.58 7.45 7.69 9.49 6.89
Construction of dwellings not over two stories 53.53 49.45 39.67 30.11 32.87 4.54 103.50 21.88 62.73 40.52 69.80 36.12 36.89 177.12 31.93 49.99 37.69 53.47 67.31 88.34 55.63 33.00
Interior cap work reference carpenterinterior 9.27 10.32 6.88 3.57 26.81 6.91 13.75 6.53 5.65 8.00 11.78 6.35 6.43 18.81 4.41 8.42 5.84 11.28 11.26 10.44 8.72 5.23
Frame structures 24.18 29.99 19.93 14.79 27.13 33.16 52.58 21.88 17.61 22.79 41.25 24.87 25.42 77.66 12.33 36.26 20.20 29.06 31.54 40.06 33.67 54.08
Frame structures not over two stories in height 32.71 44.09 38.24 18.60 32.87 33.00 71.63 21.88 24.03 57.01 59.42 29.11 28.17 56.95 17.84 43.15 35.29 69.68 53.05 57.72 87.21 33.00
TILE WORK: CERAMIC, STONE, MOSAIC OR TERRAZZO 7.18 5.42 2.99 4.71 11.24 5.76 12.06 7.08 5.89 5.25 7.67 5.98 6.84 21.95 3.07 6.70 5.86 12.05 5.03 6.21 6.21 5.81
TIMEKEEPERS: CONSTRUCTION OR ERECTION 9.49 7.97 5.67 4.08 2.27 7.84 11.77 NA 4.78 6.79 10.48 5.49 7.65 9.69 3.73 5.20 6.69 8.43 6.21 6.95 5.85 5.43
WATERPROOFING
Brush- or hand-pressured caulking 10.50 10.99 9.47 5.56 18.12 9.20 16.01 11.89 4.66 8.86 17.72 6.16 8.43 15.44 4.61 6.76 7.28 13.38 11.78 14.72 8.94 5.09
Trowel:interio r of buildings 9.32 11.51 6.40 9.96 26.92 7.98 14.78 9.86 6.82 10.48 11.74 6.48 10.73 27.62 3.47 10.98 5.56 9.39 7.63 11.26 7.76 4.68
WRECKING BUILDING OR STRUCTURES
Concrete or concrete-encased building or structures 7.11 10.60 7.64 4.84 12.72 9.37 19.12 9.38 10.57 11.88 12.01 6.17 11.76 35.68 5.25 12.72 7.13 10.99 8.92 16.31 12.11 18.85
Iron or steel buildings or structures 13.49 26.50 9.55 10.63 15.15 14.86 21.86 21.88 7.19 11.00 17.52 6.32 8.02 25.64 5.42 14.65 14.48 12.54 8.54 15.85 12.25 33.00
COMPILED BY AON RISK SERVICE,IN SURANCE BROKERS, NEW YORK CITY. RATES ARE TYPICAL WORKERS COMPENSATION INSURANCE RATES APPROVED AND IN USE OF AUG.30, 2013.THESE RATES ARE TYPICAL CURRENT RATES SUBJECT TO EXPERIENCE RATING.MONOPOLISTIC-FUND STATES ARE NOT INCLUDED.NEVADA IS AN ASSIGNED-RISK STATE.RATES ARE VARIABLE.IF SPECIALTY RATES ARE LEFT BLANK,REFER TO COMPANY.*NOC=NOT OTHERWISE CLASSIFIED.