Congratulations to PBA members E. G. Stoltzfus and McConkey Insurance & Benefits for being named to the Central PA Business Journal’s 2017 Top 50 Fastest Growing Companies! READ MORE
A new consumer spending analysis from the National Association of Home Builders (NAHB) highlights another reason why home building helps drive a healthy economy: In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings and home improvement projects – 2.6 times as much as other home owners in a typical year.
NAHB economists studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to help quantify the wave of activity – and cash – spent to install new refrigerators, buy couches and make other improvements as new owners personalize their homes.
“While construction jobs are the most obvious impact of new homes on the economy, it’s important to realize that it doesn’t stop there,” said NAHB Chairman Granger MacDonald, a home builder and developer in Kerrville, Texas.
“It’s the architects, the heating technicians, the lumber suppliers. And it’s the mom-and-pop owners at the local furniture or appliance store who are helping these buyers make their house a home,” he said.
During the first two years after closing on the house, a typical buyer of a newly built single-family home tends to spend on average $4,500 more than a similar non-moving home owner.
A previous NAHB study based on 2004-2007 data collected during the housing boom showed somewhat higher spending by home owners overall. But the tendency of buyers to outspend non-moving owners on appliances, furnishings and home improvements was similar.
In the aggregate, most of the demand for appliances, furnishings and remodeling projects in a given year is generated by non-moving home owners, because they outnumber home buyers by such a wide margin.
But new owners’ impact is noticeable – and vital, MacDonald said. “The health of housing – and new home buying – is key to the overall state of our economy.”
See the study at: http://www.nahb.org/spendingpatterns.
PBA announced today that 772 students were awarded a certification from the PBA Endorsed Trade Program at the end of the 2016-2017 school year. The program currently includes 111 technical programs from 28 different trade schools throughout the Commonwealth.
“PBA is committed to an endorsed trade education program that meets and exceeds industry standards in curriculum, mission and educational goals,” said Daniel Durden, PA Builders Association CEO. “We recognize the urgent need for skilled trade’s workers in PA. Workforce development is a critical function of PBA’s mission to our residential builder and remodeler members.”
Trade program endorsements involve a thorough review and evaluation by construction industry professionals using criteria established by the National Association of Home Builders (NAHB.) PBA’s Endorsed Trade Program is recognized by the PA Department of Education and endorsed by the Pennsylvania Association of Career and Technical Administrators. Endorsement ensures that trade programs like PBA’s meet high standards of performance and will properly prepare students for a career in the industry with foundational knowledge in the building trades.
Chris Warren, Chair of the PBA Workforce Training and Education Committee oversees the management and growth of the program. “Our endorsed school graduates are available exclusively to PBA members so they can recruit the most desirable candidates. This partnership is a win-win for both our home builder members and the trade schools that train them.”
PBA collaborates with schools around the state to certify home building trade programs in fields such as building construction, cabinetry, HVAC, masonry, and plumbing trades demonstrate they meet NAHB educational guidelines. Students who complete PBA-certified programs are then tested and receive their accreditation - providing reassurance to builders and potential employers they are well-prepared for work with a residential construction company. PBA members may review the list of potential employees at www.pabuilders.org/members using their member login information. Further information about the program can be found at pbaendorsedtrade.org.
During the 2017 Midyear NAHB Board Meeting, Kert Sloan, President of Aluminum Associates in Temple, PA accepted an award for Life Director from the National Association of Home Builders.
In order to achieve this award a volunteer must attend at least two NAHB Board Meetings a year for 10 years consecutively. He has achieved this by only missing one meeting in ten years.
The York Builders Association and the Realtors Association of York and Adams Counties in collaboration with the PBA Associates Council, has completed a large community service project for Leg Up Farm, a non-profit organization in York County that has been making a name for itself in the central PA region. The organization provides educational and therapeutic services for special needs children, hosts summer camps, operates a full service grocery market, and plans to open a second farm in partnership with Penn National Raceway.
Through volunteer labor as well as product and monetary donations, the two groups were able to remodel several areas of their "Matthew's Town" installation, a dynamic indoor interactive therapy setting fashioned after a small town which helps kids with special needs navigate everyday settings and challenges on their own terms, and at their own pace. Features were installed like windows, lights and doors to boost the home town atmosphere, and $1500 was donated to subsidize the cost of the Summer Camp for a few lucky children
For more information about Matthew’s Town and Leg Up Farm or to donate, go to their website at www.legupfarm.org. Thank you to all the member companies that helped make a difference:
Lancaster and Wilkes-Barre/Scranton Metropolitan Statistical Areas are the only two MSAs in the nation with a +3 ranking while 57 MSAs have a ranking of +2 in the latest report, suggesting very healthy housing fundamentals in these local markets. Overall, more than three-quarters of the MSAs across the country have a positive ranking in the 2017 Q1 report. Other strong PA markets include Philadelphia and Pittsburgh, which each rated a +2 – an increase of +1 ranking from Nationwide Economics 2016 Q4 summary.
The residential construction industry continues to experience a labor shortage. According to Bureau of Labor Statistics and National Association of Home Builders (NAHB), there are currently over 200,000 vacant construction positions nationwide. In fact, a recent survey by the NAHB revealed that 70 percent of its members were experiencing delays in completing projects on time due to a shortage of qualified workers, while other jobs were lost altogether.
While the recession took away skilled workers who were unable to find jobs and dropped them out of the industry, younger workers are no longer even considering construction as a viable career option. Cash-strapped high schools have phased out shop classes, and parents have steered graduates to four-year colleges and white-collar careers. Now, as the baby boomers retire, there simply isn’t anyone ready to take their spots.
Building activity is projected to strengthen over the next few years, and the demand for skilled craftsmen is expected to continue to grow. While residential construction activity may have increased significantly since the low point of the recession, many still view this resurgence as weak.
NAHB’s Economics Group analyzed state data about PA’s residential construction labor market. Despite home sales and population growth lower than the national averages, PA gained a healthy 8% in construction wage growth from 2015-2017. In fact, the top earning construction job (Construction Supervisor) can earn upwards of $88,300 annually. The hottest construction labor market in PA? The metro area of Allentown-Bethlehem-Easton is expected to need 8% increased workforce demand.
Help is on the way
PBA’s Endorsed Trade Program has been producing hundreds of skilled residential construction-related workers annually since its inception in 2007. Using the latest NAHB educational guidelines, students who complete PBA-certified programs are then tested and receive their accreditation - providing reassurance to builders and potential employers in PA they are well-prepared for work with a residential construction company in critical fields such as building construction, cabinetry, HVAC, masonry, and plumbing trades. PBA members may review the list of potential employees at www.pabuilders.org/members using their member login information. Further information about the program can be found at www.pbaendorsedtrade.org.
Recent legal actions by Pennsylvania Attorney General Josh Shapiro against 31 home improvement contractors is an inevitable side-effect of the Home Improvement Consumer Protection Act (HICPA). Home improvement contractors who earn more than $5,000 a year are required to register every other year under the law. The list of the 31 cited businesses by the PA Attorney General account for only 0.047% of the over 65,000 contractors registered through HICPA.
While the law has made it easier to find crooked contractors and provides more tools for prosecuting them, PBA offers several recommendations to keep your biggest investment secure when approaching new home construction or renovations:
The Pennsylvania Builders Association – along with your local home builders organization can help you find and hire a reputable contractor in PA. Click here for more info.
To report a fraudulent contractor, contact the Bureau of Consumer Protection at 800.441.2555 or visit the PA Attorney General’s website.
Harrisburg, PA – Governor Tom Wolf today signed House Bill 202, known as Act 6, into law. The bill, sponsored by House Speaker Mike Turzai, amends the Public School Code to allow students in career and technology education (CTE) to demonstrate proficiency and readiness for high school graduation in an alternative pathway, and removes the statutory requirement for the Keystone Exam on that student population.
“Whether they are working and learning in the classroom, in the lab, in the shop, in the field, or in the garage, our young people are always striving and succeeding across a wide variety of fields,” Governor Wolf said. “With this measure, Pennsylvania will recognize that diversity and will no longer hold all students to the standard of a Keystone Examination, which too often doesn’t reflect the reality of a large sector students’ educational experience.”
“We continue to recognize the importance of providing multiple avenues for students to demonstrate educational achievement, especially for students enrolled in career and technical education,” said Speaker Turzai. “This law will ensure our career and technical education system is flexible enough to adapt to the needs of emerging industries, is accountable to ensure every child has a chance to succeed, and is providing robust support for our educators. The bill passed the House and Senate with broad bi-partisan support, and I am very appreciative that the Governor has signed this important legislation into law.”
“With this legislation, we are addressing some simple facts: Our economy is starved for workers with skills in the trades and not every student is best suited for academic education pathways,” said Rep. Mike Tobash. “We recognize that knowledge is valuable and different types of knowledge are important for students, employers and our economy.”
Act 6 implements one of four recommendations made by the Pa. Department of Education (PDE) pursuant to Act 1 of 2016, which paused the Keystone Exam graduation requirement for a period of two years (delayed until the 2018-2019 school year). Specifically, Act 1 required PDE to investigate alternative options for a state level graduation requirement and provide those recommendations to the General Assembly.
The four options for students to demonstrate proficiency and post-secondary readiness are as follows:
Passage and enactment of this bill, which addresses the third recommendation above, supports Governor Wolf’s position that passing a high school exit exam is not the sole valid measure of proficiency and career readiness, and that Pennsylvania should take a more holistic approach by enabling students to demonstrate their knowledge and skills through multiple valid measures.
“We are a commonwealth blessed with a wide variety of career opportunities and industries that our young people must enter if we want to stay competitive in the global economy,” Governor Wolf added. “We want them to be prepared with the necessary skills that employers need in order to allow our industries to thrive, and enable young people to grow their own families right here in Pennsylvania.”
Total housing starts declined in May after a few, strong early months to begin 2017. Total starts were down 5.5%, falling to a 1.092 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. Declines were recorded for both single-family and multifamily development.
Single-family starts fell back, declining to a 794,000 annual rate. The February annualized rate, 877,000, was the fastest monthly pace since the Great Recession. Nonetheless, single-family starts are up 7% year-to-date compared to 2016 as limited existing inventory and solid builder confidence make for positive demand conditions.
Single-family permits were down 4.9% in May. There has also been a noticeable increase in the number of single-family homes permitted but not started, consistent with survey data indicating supply-side bottlenecks. For example, in May there were 78,000 single-family homes permitted (on a seasonally adjusted basis) but not started construction. This is almost 15% higher than a year ago.
As measured on a three-month moving average, the data are consistent with recent trends in the NAHB/Wells Fargo measure of single-family builder confidence and NAHB’s forecast of modest single-family construction growth in 2017. The three-month moving average of single-family starts reached a post-recession high in April, and NAHB is forecasting continued growth for the sector as the year progresses. However, due to the strong February number, the rolling average has weakened recently.
Multifamily starts dropped again in May for a fifth consecutive month of decline. Five-plus unit multifamily starts fell 10% to a 284,000 seasonally adjusted annual rate. Multifamily five-plus unit permits were also down, falling 10%. NAHB is forecasting that multifamily development will decline in 2017, although leveling off at elevated levels. The May data indicate that multifamily five-plus unit production is down 5.4% on a year-to-date basis.
With respect to housing’s economic impact, 57% of homes under construction in May were multifamily (612,000). This multifamily count is almost 6% higher than a year ago, although in recent months this total has flattened, consistent with our forecast. There were 455,000 single-family units under construction, a gain of 6% from this time in 2016. This is slightly lower than the April total (457,000), which was a post-recession high.
Regionally, single-family starts declined in the South (-8.9%) and the West (4.9%), the two largest market areas. Single-family starts were up in the Northeast (12.5%) and the Midwest (9.5%).
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