EMPLOYMENT AND VALUE OF NEW CONSTRUCTION IN THE CONTRACT CONSTRUCTION INDUSTRY Sources: Employment, Bureau of Labor Statistics, value of new construction, Bureau of the Census. Further progress in improving paving methods and techniques may result from standardization of highway construction specifications now being considered by the Bureau of Public Roads, the American Association of State Highway Officials, and other highway construction organizations. Standardization of dimensions of construction materials and in design (modular coordination) decreases labor and material requirements. Since 1956, the U.S. Army Corps of Engineers has required modular coordination for all its projects and the Veterans Administration for its hospitals since 1960. This system, utilizing a standard unit of measurement of 4 inches and its multiples, also is gaining in use in commercial construction. Of the 878 products listed in the 1963 edition of Building Products Register which could be modular, 505 were available in modular sizes. Modular coordination enables contractors to make more rapid and accurate estimates and affords reductions in on-site labor and materials costs. The Modular Building Standards Association claims that this system can result in a 7- to 10-percent saving in total construction costs. According to a contractor who has used both modular and nonmodular materials on similar projects, the savings in field labor are about 10 to 15 percent, overall labor savings from 1 to 6 percent, and there are additional savings in materials and time. For architects, the principles of modular coordination enable designing to be done faster and more accurately. For manufacturers, the standardized system of measurement could mean smaller inventories, reduced cataloging, and mass-production economies. The trend toward prefabrication (preassembly of building components in manufacturing plants) will accelerate. According to the Home Manufacturers Association, annual production of prefabricated houses may more than double between 1964 and 1975. Prestressed concrete structural elements used for larger buildings and heavy construction, such as beams, roof and floor slabs, columns, and pilings, may increase by 150 percent between 1964 and 1970. Among the major factors contributing to this advancing trend toward prefabrication are the significant savings possible in time, materials and on-site labor requirements, the higher degree of quality control possible in factories, and the greater opportunities for economies of large-scale production and massproduction techniques in construction. For example, a carpenter can install a complete prefabricated door (prehung in its frame with hardware attached) in about one-tenth to one-sixth the time usually required to hang a door in the conventional manner. According to one homebuilder, the walls and roof of a conventional wood-framed house which require about 500 man-hours to build onsite, can, with perfabricated components, be built (including off-site manufacture of components and on-site erection) in 200 man-hours or less. Prefabrication of building components in factories makes possible significant reductions in labor required in construction (SIC 15, 16, and 17) while facilitating increases in employment in industries supplving construction materials. New and improved materials continue to reduce significantly material and labor costs. By 1970, new products introduced during the decade of the 1960's are expected to account for a substantial portion of all building products sold in this country, reflecting the continuing advances in plastics, steel, concrete, paints, and other materials. Plastics offer the advantage of ease of handling, ease of maintenance, and ability to be molded to extremely close tolerances and, thus, are expected to be widely used for an increasing number of applications such as piping, interior wall panels, exterior wall sections, insulation and moisture proofing, and roofing. Prestressed concrete products, expected to double in sales by 1970, offer considerable labor and other cost savings in many uses. Developments in structural design using high strength steel products can reduce the frame weight of buildings by as much as one-half in some instances, thereby resulting in significant material and labor costs savings. Aluminum siding increasingly used for all types buildings, can already be obtained with a factory finish guaranteed to last 30 years, reducing significantly manpower needs for exterior maintenance. Laminated wood beams, considered less expensive in some spans and more fire resistant than materials conventionally used, are being used increasingly in the construction of warehouses, retail stories, and light industrial and commerical buildings. New paints require less on-site preparation, flow more smoothly, go on in fewer coats, and last longer, thus reducing costs and substantially reducing maintenance requirements. Adhesives are being more widely used to save time and reduce costs in floor bonding, exterior wall section fabrication, and in drywall erection. Because of its excellent fire-retardant qualities and low cost. gypsum board will probably increase in use for interior wall systems in commercial and residential buildings. Improvements in design arc continually being made. New concepts of architectural and engineering design make possible cost savings and productivity increases. More than a dozen new structural design concepts-all directed toward the economical utilization of space, materials, and the lowering of costs-have emerged since 1945. For example, plastic design, which enables an engineer to design beyond the elastic limit of steel, resulted in the construction of a warehouse for which 841 tons of steel were used, 141 tons (about 14 percent) less than the conventional design required. Space frame design, as used in thinshell construction, which utilizes form rather than the property of the materials to derive strength, will probably become more prevalent now that electronic computers are available to overcome the difficulty of manually performing the lengthy and time-consuming mathematical analysis required. New systematic scheduling techniques are gaining acceptance among large contractors on complex projects. Techniques such as the Program Evaluation and Review Technique (PERT) and the Critical Path Method (CPM), particularly when used in conjunction with electronic computers, significantly improve management's capability to plan, schedule, coordinate, and monitor all steps involved in the completion of a complicated construction project. Basically, PERT and CPM are systems for charting the workflow of an entire construction project in detail. They provide a fast and flexible means of estimating the time required for each construction operation and completed project; of identifying potential bottlenecks; of coordinating interdependent operations; and of allocating and optimizing labor, materials, and equipment in order to reduce the total cost and performance time. These new scheduling techniques also are being used increasingly by large contractors to aid in multiproject planning, subcontracting, and preproposal planning. Computers are being used increasingly for a variety of functions. Used mainly by large contractors engaged in large scale heavy construction and in commercial and industrial building, computers are being utilized to aid in design, production scheduling, subcontracting, and bid estimating. In bridge design, for example, computers are being used to help designers determine alternative designs for structures and the stresses that construction materials will convey. Currently, practically all State highway departments and the U.S. Bureau of Public Roads use computers as an aid in highway and bridge construction. MANPOWER TRENDS AND ADJUSTMENTS Employment may exceed its 1957-64 average annual rate of increase. Total employment increased from 2 million in 1947 to 2.9 million in 1957, an average annual rate of 4 percent. By 1964, employment had increased to 3.1 million at an average rate of 0.6 percent annually since 1957. Construction worker (production) employment followed the same pattern but at slightly lower levels during both periods. Growth in employment over the next 5 years may exceed that of the 1957-64 period because of an anticipated rise in construction activity. However, employment will not grow as rapidly as construction volume because continued technological advances permit greater output per worker. New construction put in place, value in 1957-59 dollars: 1947-57 5.4 2. 4 New construction put in place, value in current dollars: 9.4 4.3 1957-64 1947-57 1957-64 Extent of increase in employment will vary among skilled workers. Employment of concrete finishers, plumbers and pipefitters, roofers, structural-metal workers, lathers, and sheet-metal workers will probably grow faster than that of other skilled workers in construction because technological changes affecting their trades are not expected to offset the employment generated by the anticipated increase in volume of construction. The number of jobs for operating engineers, bricklayers, stonemasons, tile and marble setters, slaters, electricians, and plasterers is expected to increase at or about the average for all trades because the expected increase in the need for their skills will be offset to some extent by new equipment, new methods, and increasing use of prefabricated components. Employment of painters and carpenters is expectd to increase less than that of most skilled workers mainly because of longer-lasting, easier-toapply paints and off-site preparation of materials, which make possible reductions in construction employment while generating employment in the industries which produce the building materials. Changes in technology will slow employment growth of construction laborers. Employment of laborers (including helpers and tenders), who numbered nearly S00,000 in 1964, is expected to grow only slightly because such functions as loading and unloading materials at the worksite, shoveling and grading earth. stacking and carrying materials, and other laboring tasks are generally being mechanized. For example, the use of pumps and conveyors instead of conven tional wheelbarrows to move concrete, utilization of slip-form paving, and the substitution of tower cranes for conventional cranes tend to reduce laboring crews by one-half or more. Increased winter activity may mitigate widely fluctuating employment. Due to the highly seasonal nature of construction work in most parts of the country, over one-third more construction workers are employed in the summer than in the winter. In 1964, for example, total employment ranged from 2.5 million in January to 3.4 million in July and August. Advances in construction techniques and materials, however, if widely adopted may tend to reduce these wide fluctuations in the future. One of the most important methods facilitating winter construction is the sheltering of the building site by a wood frame covered with sheet plastic. Retraining programs promote new techniques. In 1964, there were over 340 training programs for journeymen plumbers and pipefitters resulting from the plan established by the plumbers' and pipefitters' union in 1955 to retrain older craftsmen in new techniques. Similar programs have been established by other building trade unions. Also, retraining for eligible unemployed construction workers is provided for under the Manpower and Development Training Act; for example, 200 unemployed members of a 3,600-man local of the Union of Operating Engineers have been trained in the operation of the latest construction equipment. Multiplicity of diverse building codes creates problems in the introduction of new materials. Nonstandardized and static building codes throughout the country frequently do not provide for the use of new construction materials and methods. For example, use of some prefabricated components and plastic pipe is not permitted by codes in many localities. Such groups as urban and suburban developers, contractor and architect associations, and local governments are promoting the replacement of traditional codes, which specify the materials to be used, by codes under which performance requirements determine the material that can be used. One potential advantage of such a change is a substantial reduction in construction cost. A developer who built houses in two adjoining areas one under a traditional code, the other under a performance codeclaims that there was a substantial differential, favoring the performance code, on identical houses. SELECTED REFERENCES TECHNOLOGICAL DEVELOPMENTS "The Big Change in Today's Prefab Market," House and Home, December 1964. pp. 69-77. "The Building Industry," The Role and Effect of Technology in the Nation's Economy part 5. Hearings before a Subcommittee of the Select Committee on Small Business, U.S. Senate, 88th Cong., 1st sess., 1964, pp. 607–628. "Construction Equipment," Engineering News-Record, Feb. 21, 1963, pp. 43-72. Lokken, E. C. "What's New in Concrete Paving," Civil Engineering, March 1964. pp. 54-57. "Modular Building, Is It Reducing Construction Costs?" Constructor, November 1963, pp. 25-27. "The New Housing Industry: part 7, Technology's Promise and Performance," House and Home, November 1963, pp. 83-117. "New Methods Gain for Walls, Framing, Thin Shells," Engineering News-Record, Jan. 23, 1964, pp. 54-56. Ray, Gordon K. and Harold J. Halm. "Fifteen Years of Slip-Form Paving," "Useful Nuclear Explosives," International Science and Technology, February 1965, pp. 54–60. MANPOWER TRENDS AND ADJUSTMENTS Ball, Claiborne. M. "Employment Effects of Construction Expenditures,” Monthly Labor Review, February 1965, pp. 154–158. Beinhauer, Frank H. "A Hard Look at Apprentice Training in Construction," Constructor, February 1965, pp. 38-40. Clague, Ewan. "The Economics of the Construction Industry," Constructor, February 1965, pp. 22-24. Kelly, Edward T. "New National Joint Board for Settlement of Jurisdictional Disputes," Constructor, March, 1965, pp. 26–27. Kheel, Theodore W. "How the 25-Hour Week Has Worked," Jobs, Men, and Machines, Charles Markham, editor, Frederick A. Praeger, 1964. Manpower Needs in the Construction Industry, Building and Construction Trades Department, Executive Council, AFL-CIO, November 1963. Projections to 1970 of Input Coefficients for Selected Construction Activities, Jack Faucett Associates, Inc., Silver Spring, Maryland, July 1964 (unpublished). [From the Monthly Labor Review, May 1967, Reprint No. 2526] EXHIBIT 267 THE DECENTRALIZATION OF JOBS JOB OPPORTUNITIES MULTIPLY IN THE SUBURBS, OUT OF REACH OF THE CITY-CENTER POOR Dorothy K. Newman* The unemployment rate has remained below 4 percent for almost a year now— for the first time in over a decade. Nevertheless, 3 million or so persons are unemployed, plus an uncounted number underemployed, in terms of capacity for more or higher level work. At the same time, many jobs are vacant; these vacancies exist along the full range of skills, but especially at the upper and lower ends of the occupational ladder.' Thus it appears that matching jobs with workers is one of the more intractable problems in the persent economy. One of the prime causes of this failure to match available jobs with available personnel is the movement of new jobs into the suburbs and out of large central cities. It is in these cities that unemployment, underemployment, and poverty are greatest.3 New Business Buildings The steady trend of this movement is illustrated by the concentration of new factory and commercial buildings in the ring of metropolitan areas rather than in the central city, as evidenced by data on the value of building permits issued, both recently (1960-65) and since 1954. (See table 1.) In the same periods, also, 1 See "The Economy in 1966," Monthly Labor Review, February 1967, p. 5. 2 "Suburbs" and "ring" are used interchangeably in this article to represent the entire area outside of the central city or cities of the Standard Metropolitan Statistical Area, as defined by the U.S. Bureau of the Budget. 3 See Income, Education, and Unemployment in Neighborhoods, a series of reports on 34 cities by the Bureau of Labor Statistics, based on 1960 Census data for Census tracts (January 1963); "Poverty Areas of our Major Cities," Monthly Labor Review, October 1966, pp. 1105-1110; from the U.S. Bureau of the Census, Special Census Survey of the South and East Los Angeles Areas: November 1965 (Series P-23, No. 17, Mar. 23, 1966); Changes in Economic Level in Nine Neighborhoods in Cleveland: 1960 to 1965 (Series P-23, No. 20, Sept. 22, 1966); Characteristics of Selected Neighborhoods in Cleveland, Ohio: April 1965 (Series P-23, No. 21, Jan. 23, 1967); and Mollie Orshansky, "The Poor in City and Suburb, 1964," Social Security Review, December 1966, p. 30. Data on the valuation and number of nonresidential buildings authorized by building permits, by type of building, in individual loca'ities and counties throughout the country are compi ed by the Bureau of the Census from almost all known permit-issuing places. These comprehensive statistics are available for individual localities and areas, and are used to develop national and regional estimates. For a large proportion of Standard Metropolitan Statistical Areas (SMSA's), reports from building-permit officials on building permits authorized in the individual localities or counties that comprise the SMSA's are complete or virtually so. The data for this section of this study are based on information for selected SMSA's for which the data are complete or virtually so, and on Census estimates for 4 regions and the Nation. The valuation placed on a building at the time of permit issuance varies from the true construction cost, and is usually somewhat lower. The differences between permit valuation and final construction cost are assumed to be relatively consistent with localities and are estimated not to affect the trends and relationships reflected in the data presented in this article. Permits which are issued are a'most invariably used, according to special Census survers. For further information on the building permit series, see Construction Statistics, 1915-1964: A Supplement to Construction Review (U.S. Department of Commerce. Business and Defense Services Administration, 1965). See also Bureau of the Census, Construction Reports, Series C-40 and Series C-42. Of the Division of Economic Studies, Bureau of Labor Statistics. With the assistance of Laura L. Irwin and Sylvia S. Small. |