DAILY DOSE OF LEADERSHIP

"You are not here merely to make a living. You are here to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement. You are here to enrich the world, and you impoverish yourself if you forget the errand."

— Woodrow Wilson

As we delve deeper into the week's endeavors, let's carry forward the spirit of purpose and leadership that defines our roles.

Consider these thoughts as we guide our teams and navigate the challenges and opportunities in construction leadership:

🛠️ Empowering Teams: Take a moment to reinforce the importance of empowering our teams. As leaders, our actions set the tone for collaboration, innovation, and a shared commitment to excellence.

🏗️ Quality in Every Detail: Construction is not just about erecting structures; it's about building legacies. Ensure that in every detail of our projects, we pursue excellence. Our commitment to quality echoes our dedication to enriching the world.

🤝 Effective Communication: Communication is the backbone of successful construction leadership. Foster an environment where open communication is valued, enabling smooth collaboration and shared understanding within the team.

💡 Innovation Mindset: Encourage an innovation mindset. Challenge the status quo, explore new technologies, and inspire creativity within our teams. In doing so, we contribute not only to our projects but also to the broader evolution of the construction industry.

May today be filled with purposeful leadership, collaboration, and a commitment to enriching the construction landscape.

Wishing you a productive Tuesday!

— Wayne Jensen

Presented by:

Wannemacher Jensen Architects, Inc.

NEWS TODAY

Supreme Court of Canada Ruling Shifts Liability in Construction Disputes!

Impact on Owners' Liability Under OHSA, Contractual Dynamics Under Scrutiny. A Paradigm Shift in Construction Industry Practices.

A recent Supreme Court of Canada (SCC) ruling in a construction dispute is poised to disrupt established practices in the industry, sparking a potential reevaluation of contractual arrangements between owners and general contractors (GCs).

Key Points:

1. Background: The case originated from a 2021 dispute between the City of Sudbury and the Ontario Ministry of Labour, Immigration, Training, and Skills Development. The city, contracted Interpaving Limited as the "constructor" for a water main repair project, leading to a fatal accident and subsequent OHSA violations.

2. Control and Liability: The city argued it lacked control over construction work, delegating it to Interpaving. However, the SCC, in a 4-4 split decision, deemed Sudbury the employer, challenging the traditional insulation of owners from liability when a GC assumes operational control. This decision may prompt a reassessment of contractual arrangements.

3. Implications for Owners: The ruling opens the possibility of owners facing charges as employers under the OHSA, with potential fines and imprisonment. Owners may now need to thoroughly assess exposure points and consider increased liability risks, potentially impacting their involvement in tasks unrelated to construction work.

4. The burden of Proof: Owners charged under the OHSA will bear the burden of proving due diligence, introducing complexities and potential legal challenges. This shift could discourage owners from involving their employees in non-construction tasks at a project site.

5. Paradigm Shift: The SCC's decision marks a paradigm shift in the construction industry, requiring stakeholders to review and adapt their practices. It prompts a careful reconsideration of contractual dynamics and risk management strategies in light of the evolving legal landscape.

As the construction industry grapples with the implications of this landmark SCC ruling, stakeholders are urged to stay abreast of legal developments and proactively adjust their practices to align with the changing landscape. The decision underscores the need for a meticulous examination of contractual relationships and risk mitigation measures within the sector.

Historic Milestone: First Dam Successfully Removed in Largest U.S. Dam Removal Project!

Klamath River Renewal Corp. Completes Copco No. 2 Dam Removal. Environmental Restoration and Collaboration Key in the Monumental Initiative.

In a historic achievement, the first of four hydroelectric dams on the Klamath River has been successfully removed, marking a significant step in the largest dam removal project in U.S. history. The Klamath River Renewal Corp. (KRRC) confirmed the completion of work on the Copco No. 2 dam in early November.

Key Points:

1. Project Scope: The removal of the four dams on the Klamath River, spanning parts of Oregon and California, constitutes the most extensive dam removal initiative in U.S. history. The project aims to restore natural habitats for salmon and steelhead trout populations.

2. Advocacy and Collaboration: The project is a culmination of over two decades of regulatory and legal disputes, with collaboration between the KRRC, local tribes, and former dam owners PacifiCorp and Berkshire Hathaway. A settlement agreement paved the way for the significant removal and restoration effort.

3. Dam Details: The Copco No. 2 dam, built in 1925, was the first to undergo removal due to its smaller size, location, and lack of a reservoir. The dismantling process involved cutting off water flow, demolition, and extensive restoration efforts.

4. Environmental Impact: The dewatered area around Copco No. 2, which diverted water for almost a century, saw the growth of trees. To prevent potential risks upon water flow restoration, the trees were removed as part of the project.

5. Upcoming Dam Removal: Work on the three remaining dams—J.C. Boyle, Copco No. 1, and Iron Gate—is set to commence in January. The removal process involves breaching, dismantling, and restoring river channels based on the dams' original construction.

6. Timeline: The overall project, valued at $450 million, is expected to be completed by November 2024. The Federal Energy Regulatory Commission approved the license transfer to KRRC in November 2022, facilitating the commencement of demolition.

7. Environmental Restoration: In addition to dam removal, the project involves the dismantling of powerhouses, penstocks, and outbuildings. Habitat restoration efforts will be undertaken, with millions of seeds planted in the reservoir footprint as water recedes.

8. Employment and Collaboration: The construction project, led by Kiewit Infrastructure West, is estimated to employ 250 to 300 workers, including local and tribal subcontractors. Resource Environmental Solutions will handle habitat restoration in collaboration with the Yurok Tribe.

The completion of the Copco No. 2 dam removal marks a pivotal moment in the multi-year effort to revitalize the Klamath River basin and underscores the collaborative and environmentally conscious approach undertaken in this groundbreaking project.

Positive Impact of Bipartisan Infrastructure Law on U.S. Construction Jobs!

Since January 2021, the construction sector has gained 670,000 jobs, averaging 20,000 jobs per month. Notable growth in heavy and civil engineering and construction of buildings.

The law, which includes significant investments in transportation infrastructure, the electric grid, high-speed internet, and clean energy, aims to create jobs and enhance economic growth.

The construction sector, known for its cyclical nature, has experienced notable job gains since President Biden took office in January 2021. The economy has added 670,000 jobs in construction, averaging 20,000 jobs per month. This growth rate is slightly faster than the pre-pandemic period, with certain sub-sectors such as heavy and civil engineering and construction of buildings seeing accelerated growth.

Key Findings:

1. Heavy and Civil Engineering: The heavy and civil engineering industry, responsible for projects like utility systems, roads, bridges, and transit, has added 92,400 jobs since January 2021. The sector has experienced a series high in overall employment, with significant growth in highway, street, and bridge construction. Employment in this sub-sector has increased by 38,300 jobs since January 2021, with 37,600 jobs added after the Bipartisan Infrastructure Law was signed into law in November 2021. Job growth in highway, street, and bridge construction has surpassed pre-Great Recession levels, reaching a new series high.

2. Construction of Buildings: The construction of buildings industry, covering new construction, additions, alterations, maintenance, and repairs, has added 187,000 jobs since January 2021. Job gains are evenly split between residential building construction (93,000 jobs) and nonresidential building construction (94,000 jobs). While initial gains were driven by residential buildings, recent increases in nonresidential construction have been notable. Nonresidential building construction employment has reached a series high, and the pace of job gains in this sub-sector exceeds previous periods of growth.

Conclusion: The strong employment growth in these critical sub-industries of construction suggests that the Bipartisan Infrastructure Law is already impacting the sector positively. The law's focus on rebuilding roads, bridges, and other essential infrastructure projects is creating demand for high-paying construction jobs. Notably, the job gains in the construction sector are beneficial to American workers, as construction jobs tend to be relatively high-paying.

The Biden-Harris Administration has taken steps to further enhance the quality of construction jobs, including the use of project labor agreements for large-scale federal construction projects and updates to the Davis Bacon Prevailing Wage Rule. While the construction sector's job gains are a positive early indicator, the long-term benefits of the Bipartisan Infrastructure Law are expected to contribute to increased productivity and broad-based economic growth in the coming years.

DIG INTO THIS ONE

Looking for advice on how to choose a career path? This dynamic approach goes straight to the source: asking real-world workers how they feel about their occupations.

ECONOMY IN THE INDUSTRY

Construction Outlook 2023:

Navigating Challenges and Opportunities in a Dynamic Economic Landscape

As the construction industry approaches 2023, a nuanced economic landscape awaits, posing challenges and opportunities across various sectors. Industry experts provide insights into key trends shaping the construction environment in the coming year.

📉 Down Markets:

1. Residential Construction: Rising interest rates have curtailed the momentum in the robust housing market, leading to a decline in housing starts, building permits, and home sales. The single-family home market is expected to bottom out in late Q1 or Q2 of 2023.

2. Office Construction: The prevalence of remote work is impacting office construction, with a projected decline in 2023. Construction spending on office-related projects, which includes data centers, is only up by 0.9%.

3. Warehouse Construction: The pause in warehouse facility construction, exemplified by Amazon's delay in projects, indicates an overbuilt segment. This shift is expected to lead to a decline in warehouse construction, previously a strong segment.

4. Retail Construction: Traditional retail faces continued challenges due to the growth of online shopping, with retail construction significantly below the levels seen three years ago.

5. Manufacturing Construction: Despite a significant increase in 2022, manufacturing-related construction is forecasted to experience a steep decline in 2023. The sector will still contribute $52.1 billion in construction spending, well above historical levels.

📈 Up Markets:

1. Public Works Construction: The Infrastructure Investment and Jobs Act (IIJA) is set to drive an 18% increase in public works construction, reaching $225 billion in 2023. The act provides $1.2 trillion for vital infrastructure projects.

2. Power/Utilities: The transition to renewable energy sources is expected to fuel an 8% growth in the power and utilities sector in 2023, reflecting global efforts toward alternative and renewable energy.

3. Data Center Construction: Data centers continue to be a bright spot in 2023 due to increased demand resulting from online shopping and remote work.

🌐 Potential Headwinds:

1. Supply Chain Issues for Construction Equipment: The construction industry is grappling with ongoing supply chain challenges, impacting equipment manufacturers, with issues related to workforce shortages and access to components.

2. High Borrowing Costs: High interest rates and rising materials prices pose challenges, particularly in multifamily, office, retail, and hotel construction. Projects may face economic feasibility issues.

3. Labor Shortages: The construction industry is expected to continue facing challenges in attracting workers, with demographic factors and low immigration levels limiting workforce availability.

4. Regional Variations: Economic outlooks vary by region, with some areas experiencing more positive trends than others. Location remains a critical factor in construction investment.

Despite potential headwinds, industry experts remain optimistic, citing continued job growth, government spending, and declining inflation as positive indicators. The ability to pivot to sectors experiencing growth will be crucial for contractors navigating the mixed markets in 2023.

PROFITABLE TECHNOLOGY

Construction Allies in Action Champions Diversity in the Construction Sector, Empowering Minority and Women-Owned Businesses

The organization recognizes the need for increased representation of minority and women-owned businesses in the construction sector and aims to address this by actively supporting and empowering entrepreneurs.

Key Initiatives of Construction Allies in Action:

1. Strong Foundations Program: This program focuses on early-stage entrepreneurs and contractors, offering a seven-month course to teach them the basics of the construction industry. It provides essential knowledge and skills to help participants establish a strong foundation for their businesses.

2. Affiliate Hub: The Affiliate Hub offers back-office support services such as accounting and marketing. This aims to alleviate some of the administrative burdens on contractors, allowing them to concentrate on their core business activities.

3. Foundations Plus Program: Tailored for mature contractors, this program provides services like strategic planning and essential connections to facilitate business growth. It recognizes the unique challenges faced by established contractors and offers targeted support.

Impact on Entrepreneurs:

Lisa Knight, owner of DV Apple Logistics, a concrete business, shared her positive experience with Construction Allies in Action. She mentioned having numerous opportunities to learn and grow through the program. The organization has supported her in obtaining certifications, enabling her to pursue larger projects, including government contracts.

Nate Beene's Perspective:

Nate Beene, who owns a landscaping, snowplow, and construction company called Building Bridges, emphasized the rewarding aspect of helping others build their success. Drawing from his own experiences, Beene expressed the satisfaction of being on the other side of challenges and being able to expedite the process for fellow entrepreneurs.

Construction Allies in Action aims to actively contribute to the transformation of the construction industry by promoting diversity and providing tangible support to underrepresented contractors. The organization recognizes that achieving meaningful change requires accountability, rigor, and structured programs, and it is committed to driving these changes from the ground up.

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