Study shows commercial construction industry poised for recovery post COVID-19
The Q2 2020 USG Corporation and U.S. Chamber of Commerce Commercial Construction Index has indicated the commercial construction industry is well-positioned for recovery.
The Q2 2020 USG Corp. and U.S. Chamber of Commerce Commercial Construction Index released June 23 has revealed a drop in contractors’ confidence and outlook for their industry during the COVID-19 pandemic. However, some index findings indicate that commercial construction is well-positioned for recovery.
The survey results were collected in April, at the height of shutdown restriction, causing the overall Index to plunge from 74 in Q1 to 56 in Q2. According to the Chamber of Commerce, the drop reflects the fact that two of the index’s main indicators — confidence in new business and revenue expectations — both fell 26 points (to 50 and 44, respectively), revealing the severe impact of the coronavirus pandemic on the construction industry.
Very few contractors (16 percent) express high confidence in the market’s ability to provide new business opportunities in the next 12 months (down from 54 percent in Q1). Meanwhile, the percentage expecting to see their revenues decrease in the next 12 months spiked to 2 percent in Q1 to 21 percent in Q2. However, contractors’ view of their backlog of upcoming projects dropped only a modest three points, remaining consistent with the first half of 2018.
“No industry has been immune to the devastating impact of COVID-19,” said Neil Bradley, U.S. Chamber of Commerce executive vice president and chief policy officer. “However, the commercial construction industry appears poised for a quick recovery and a return to growth. This is good news for the economy and the millions of Americans who work in the industry. Congress can help by continuing to support the economy.”
Despite COVID-19 shutdowns, 60 percent of contractors report having at least six months of backlog projects (compared to 69 percent in Q1). More than 83 percent say their revenue will increase or remain about the same in the next year. And, three in four contractors say they have moderate or high confidence that the next year will bring sufficient new business opportunities (and in the next two years, that percentage rises to 93 percent).
This quarter’s index also reveals that the commercial construction industry is an important employer during the pandemic and is ready to hire more workers. One in three contractors (32 percent) plan to hire more workers in the next six months, while nearly half (48 percent) believe their workforce will stay the same. Only 15 percent expect to employ fewer workers.
Although construction project delays have had a major impact on the industry, the study reported contractors have become less concerned about delayed projects as they look to the future. In April, over a third (35 percent) of contractors reported that at least 75 percent of their projects were delayed. When asked to look three months ahead, only 16 percent of contractors expected the same. Looking six months ahead, only 8 percent expect at least 75 percent of their projects to be delayed.
Crews rely on specialized equipment to rebuild Antarctica's McMurdo Station
Metso delivers equipment retrofitted to withstand extreme cold for the rebuilding of McMurdo Station in Antarctica.
In February 2019, the National Science Board authorized the National Science Foundation (NSF) to begin a comprehensive rebuilding of McMurdo Station in Antarctica. Located in the Ross Sea, McMurdo is the U.S. Antarctic Program’s (USAP) logistics hub and the largest of the three stations the nation operates on the continent.
The station is being rebuilt under the Antarctic Infrastructure and Modernization for Science (AIMS) project, which will be one of the first major infrastructure modernization projects at McMurdo Station since its establishment in 1956. Over the next 10 years, the project will help update the station to make it energy and operationally efficient.
According to the Antarctic Sun, the continent’s NSF-funded newspaper, the $355 million project will include 370,000 square feet of new construction and plans to consolidate the research station’s roughly 100 buildings into just six primary structures.
“A world-class science program is the primary expression of the nation’s geopolitical presence in Antarctica and helps to ensure the U.S. keeps a leading role in Antarctic Treaty System deliberations,” said Kelly Falkner, director of NSF’s Office of Polar Programs in a statement announcing the project. “Through AIMS, this historic site for scientific research will gain the capabilities that will allow it to continue in its role as a leading hub for scientific endeavors.”
PREPARING THE EQUIPMENT
Leidos, Reston, Virginia, a defense, aviation, information technology and biomedical research company, was chosen as the prime contractor for the AIMS project. Responsible for all “on the ice” operations that help make research possible, Leidos works for the NSF to introduce cost-effective infrastructure for managing work stations, medical facilities and facility communications.
With recorded temperature extremes as low as minus 40 degrees Fahrenheit, Leidos acquired equipment retrofitted for extreme cold from Metso, Tampere, Finland, to make the project possible. The seller was Aurora, Colorado-based Wagner Equipment Co.
“After a comparison of several equipment manufacturers, Metso and Wagner offered a freeze-proofed crushing solution with the best value,” says David DesAutels, Leidos’ Antarctic support contract fleet analyst, in a Metso release. “The equipment, specifically designed for cold conditions, will be maintained by personnel with close proximity in New Zealand.”
Leidos procured a Lokotrack LT106 jaw crusher, LT200HP cone crusher and ST3.8 mobile screen for the job, all of which will be used for crushing ground materials for the new buildings.
According to Richard Sack, a crushing and screening machine sales representative at Wagner Equipment, Metso made variety of changes to the equipment to stand up to the rigors of the job, including installing a central junction box to plug into external generators when not in use to help heat fluids. The company also insulated all hoses, installed arctic belting and modified units to operate on Jet A-1 aviation fuel since it is suitable for cold conditions and the only fuel source available at the site.
“Every part [of the equipment] sensitive to cold has been fitted with immersion heaters and extra insulation. The selected oils and other fluids are suitable for the Antarctic climate, and the specially manufactured conveyor belts run even in extremely cold weather,” Marko Salonen, project manager at Metso’s Aggregates Equipment business area, says in a release.
ARRIVING AT THE SITE
Weather conditions in Antarctica can pose substantial logistical challenges for a construction project the scope of McMurdo Station. Another substantial challenge is with material and equipment availability since supplies only arrive once a year; thus, materials that are needed must be ordered a year in advance so they can be delivered on the annual supply ship, which departs in October.
When considering the lead time between being awarded the contract and delivering the equipment, Metso made sure Leidos had what it needed to work on the project amid unforeseen challenges, including shipping additional wear parts and a recommended spare parts list with data to support maintenance.
“[Metso] prepared the maintenance and spare parts service in such a way that everything conceivable can be anticipated and serviced independently on-site,” says Sack. According to Salonen, even the packaging materials were chosen in a way that ensured nothing unnecessary would be transported to the unique Antarctic environment to minimize waste.
The crushing plants began their long journey in Finland, where the equipment was then shipped to Germany. From there, it was taken to Port Hueneme, California, where it travelled onward to Antarctica via Christchurch, New Zealand.
The final leg of the journey was completed by two vessels carrying a total of 35 earthwork machines. These ships were hardened to withstand the icy waters of the region, but were accompanied by a U.S. Coast Guard icebreaker to ensure safe delivery and return.
The globe-trotting journey finally came to an end earlier this year when McMurdo took receipt of the equipment in February.
THE PROJECT
Under the AIMS project, Leidos is required to produce roughly 150,000 cubic yards of engineered fill to support construction and expansion projects throughout the base, such as for docks, runways, building foundations and roadways.
The first two buildings slated for construction are the Vehicle Equipment Operations Center (VEOC), which will serve as the main maintenance and repair facility for McMurdo’s varied fleet of vehicles, and a new 285-bed lodging facility.
The largest component of the project is the Core Facility, a multi-operational facility that will house station management and administration, field communications, food service and dining, and food warehousing functions. Once that is completed, construction will begin on the Emergency Operations Center, which will house the fire department, medical facilities and recreational space.
In overseeing the start of the AIMS project, Leidos operated the Metso machines for two months before ceasing operations. Due to the extreme conditions of Antarctica, the equipment can only be used during the Southern Hemisphere summer, which lasts from October to April.
With a couple months of operations completed, Leidos reports they have been pleased with the results.
“So far, Metso’s equipment is getting the job done beyond our expectations,” says DesAutels.
Before stopping for the winter, Leidos was feeding basalt of unknown hardness less than 24 inches into the LT106 jaw crusher for primary reduction to less than 6 inches, with the LT200HP cone crusher providing final reduction to less than 2 inches, with a specific particle size distribution encompassing 11 different gradations. The hard basalt was generated from an area near the station.
To meet the demands of the AIMS project as safely, timely and efficiently as possible, the equipment provided is designed to be most optimal by feeding materials into the Lokotrack LT106 jaw crusher and then running this into the Lokotrack ST3.8 mobile screen to pull off the material already meeting the specification.
The oversize material is then sent into the LT200 cone plant to crush the material down to the desired size. According to Metso, this is a closed-circuit configuration that will allow for consistent high production requirements given the extreme conditions.
“We aim to work 16 hours a day and produce 250 tons of 63 mm crushed stone per hour,” says Jeffrey Huffman, Leidos Antarctic support contract operations manager. “We also want to include some degree of fines to gain more compact material for the buildings’ foundations.”
Metso’s equipment will be used for three years, with work on the project expected to be completed in 2026. When finished, the new McMurdo station will save the National Science Foundation millions of dollars in operations and maintenance costs while also improving the living and working conditions for staff, says Senior Advisor for the NSF’s Office of Polar Programs Scot Arnold in a USNI News article.
“Project success will be defined by meeting production goals without undue environmental impacts or risk to personnel,” explained DesAutels. “To date, the equipment has served us well in both those critical elements.”
This article originally appeared in the May/June issue of Construction & Demolition Recycling. The author is the assistant editor of Construction & Demolition Recycling and can be reached at hrischar@gie.net.
Mack Trucks names new president of Mack Financial Services’ North American region
Patrick Shannon has more than 30 years of experience in business operations and financial services and has had various senior leadership roles in sales, wholesale operations and risk management.
Mack Trucks, Greensboro, North Carolina, announced a leadership change at its Mack Financial Services captive finance arm on June 22. According to the company, effective July 1, Patrick Shannon will be the new president of Mack Financial Services’ North American region.
In this role, Shannon will be responsible for the business operations and financial performance for Mack Financial Services in the U.S., Canada and Mexico.
Shannon has more than 30 years of experience in business operations and financial services and has had various senior leadership roles in sales, wholesale operations and risk management. He most recently was the senior vice president of risk and chief credit officer for Mack Financial Services.
Shannon has a bachelor’s degree in business administration from Saint John’s University and an MBA from Wake Forest University. Shannon will continue to be based out of the company’s Greensboro location.
Loaders will be among the types of equipment to be auctioned by Ritchie Bros. in the last week of June.
Photo courtesy of Ritchie Bros.
Ritchie Bros. holding massive online auction
Canada-based auctioneer putting 35,000 trucks or pieces of heavy equipment up for global bidding.
Vancouver-based Ritchie Bros. has announced it intends to put more than 35,000 trucks and pieces of heavy equipment up for auction on its website the week of June 22-26. It says the potential sale of the items located at 29 different sites represents “its biggest auction week ever.”
At auction sites in the United States, Canada, France, Germany and Australia, the company says it has some 3,800 truck tractors, 900 excavators, 600 wheel loaders, 350 dozers, and more equipment that will be marketed via the Ritchie Bros., IronPlanet and Marketplace-E platforms.
“Our ability to drive demand and attract record numbers of bidders during this time of great uncertainty is proving very valuable to many of our customers who need liquidity right now,” says Ann Fandozzi, CEO of Ritchie Bros. “As a result, buyers have access to an outstanding selection of late-model, low-hour equipment. We encourage interested bidders to get online, do their research, and get ready to add a new piece to their fleet this week.”
Continues Fandozzi, “Due to COVID-19, all our auctions continue to be online-only events. For those who have never bid online before, it’s easy. If you do need help, we have a customer service line to get you registered and walk you through the process.”
NorthStar acquires Heneghan Wrecking Company
Heneghan is a provider of structural and interior deconstruction, excavation and emergency response services for commercial and industrial clients across the Midwest.
Headquartered in Chicago, Heneghan is a provider of structural and interior deconstruction, excavation and emergency response services for commercial and industrial clients across the Midwest.
Heneghan, which was founded in 1973, represents the first add-on acquisition completed by NorthStar under JFLCO’s sponsorship. Patrick Heneghan, former president of the company, will remain with NorthStar and lead the combined Chicago and Midwest operations.
“Our partnership with Heneghan will further strengthen and broaden both organizations’ market presence and penetration, customer relationships and service capabilities,” NorthStar CEO Scott State says. “We look forward to working with Patrick and his team to build upon Heneghan’s sterling reputation and drive continued growth at NorthStar.”
“The Heneghan acquisition unlocks a key market in Chicago and customer base that NorthStar has historically had limited access to,” Alex Harman, chairman of NorthStar and partner at JFLCO, says.
“We are excited to welcome Heneghan and its strong Midwest presence, as well as its complementary service offerings and capabilities to the NorthStar platform,” Glenn Shor, director of NorthStar and partner at JFLCO, says.
Jones Day, Cleveland, served as legal advisor to NorthStar and JFLCO. Chartwell Financial Advisory, Minneapolis, served as financial advisor to Heneghan while Katten Muchin Rosenman, Chicago, was Heneghan’s legal representatives for the transaction.