Five Current Construction Industry Issues You Should Know

Tuesday, June 14, 2016

Construction Dive recently published Five Crucial Issues Impacting the Construction Industry.  We’ve summarized the issues for you below. Educate yourself on these regulations that are causing quite a stir in the industry!

1. Silica Rule – features new, stricter requirements regarding worker exposure to silica on the job, which can result in severe respiratory illness. These new OSHA requirements state that contractors must use additional engineering controls or provide protective equipment to exposed workers. This could cost the construction industry about $500 million to implement according to OSHA, or up to $5 billion per year based on calculation by CISC.

2. Overtime Wage Rule – states that salaried workers making less than the new threshold ($23,660 to $47,476) must be paid overtime wage rates if they work more than 40 hours in a week. It also allows for automatic increases every three years. According to trade organizations this could force some companies to reduce hours and benefits.

3. Davis-Bacon Act – requires contractors to pay prevailing wages on public work projects and fill out detailed pay forms for regular submission to the owner. Supporters for the rule say it "levels the playing field" during the bidding process, preventing contractors from lowering wages as a way to reduce the overall cost of the project. Opponents argue that the union wages used as the regulations benchmark don't always fall in line with regional pay rates.

4. Residential lot Development Regulations – proposes changes in development standards and miscellaneous preconstruction costs, which could cause the price of a new home to increase significantly. The NAHB previously reported that regulatory costs including delays, zoning approval costs, and the value of dedicated land required to be left as a green space adds 24.3% to the cost of a new home.

5. Residential Construction Regulations – is a set of regulations that applies to in-progress construction and includes permits, utility hookup fees, impact fees and the cost to comply with new building codes and standards. The NAHB estimated that these costs represent more than 14% of a builder's costs and almost 10% of the final price of a home. This doesn’t account for additional fees imposed on suppliers in the form of tariffs or other regulations regarding the import of certain materials.