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Sunday, June 26, 2011

Wells Fargo's Weekly Economic Financial Commentary - June 24, 2011

- The U.S. government agreed to release 30 million barrels of petroleum from the Strategic Oil Reserves, while other countries – represented by the International Energy Agency – agreed to release an additional 30 million barrels.
. The release of reserves is expected to be made at a rate of 2 million barrels per day, and is intended to relieve the world’s oil supply problems stemming from the unrest in Libya.
. It is doubtful as to whether this action will have any long lasting effect on the price of oil, as the 60 million barrels represent just 0.2 percent of annual world oil consumption.
- New home sales fell 2.1 percent during May, while new home inventories fell to a record low of 166,000 units.
- First quarter GDP growth was revised upward to 1.9 percent versus previous reports of 1.8 percent growth.
. The GDP price deflator, meanwhile, was revised up to 2.0 percent from 1.9 percent during the first quarter, and the core PCE deflator was raised to 1.6 percent from 1.4 percent.
- Durable goods orders came in at 1.9 percent versus a consensus estimate of 1.5 percent, as a rebound in commercial aircraft orders fueled the gain.
. Excluding transportation durable goods orders were below expectations, growing 0.6 percent versus estimates of 0.9 percent.

Sunday, June 19, 2011

Wells Fargo's Weekly Economic Financial Commentary - June 17, 2011

- Retail sales dropped 0.2 percent in May, the first decline since last summer, as auto, furniture, electronics, food and beverage, sporting goods, and department store sales declined.
- West Texas Intermediate crude is currently trading near $93 per barrel, down 18.0 percent from $114 per barrel at the beginning of May.
. According to the Department of Energy, average retail gasoline prices have dropped 6.2 percent from the May peak to $3.77 per gallon, with further declines expected in the weeks ahead.
- Initial jobless claims fell again last week to 414,000 from 430,000 the previous week, while the four-week moving average declined to 424,750.
- Housing starts and permits surprised to the upside this week, rising 3.5 percent and 8.7 percent in May, with solid gains in single-family and multi-family starts.
- The Empire State and Philly Fed manufacturing surveys revealed a contraction in manufacturing activity in June due to a decline in the new orders component.
. The negative readings from these surveys are in line with those seen during last summer’s economic soft-patch and do not in themselves signal a general contraction in U.S. industrial production growth or GDP.

Wednesday, June 15, 2011

Directive to Protect Residential Construction Workers from Falls

Starting June 16, 2011, residential construction employers will have to provide workers with the conventional fall protection required by the construction fall protection standard, issued in 1994 (29 CFR 1926.501(b)(13)).

Falls are the leading cause of death for workers in construction, and this directive will provide residential construction workers with greater protection from being injured or killed on the job, according to the Occupational Safety and Health Administration.

In December 2010, OSHA issued a new directive withdrawing an interim policy that allowed residential construction employers to use alternative procedures for worker fall protection. Under the new procedures, where residential construction employers find that traditional fall protection is not feasible or creates a greater hazard in residential environments, employers will still be allowed to implement alternative procedures that will assure worker protection after developing a written site-specific fall protection plan.

Since issuing the new directive, OSHA has developed a variety of training and compliance assistance materials in many formats that are available on OSHA's Residential Fall Protection page. The latest of these is an educational slide presentation that describes safety methods for preventing injuries and deaths from falls, and explains techniques currently used by employers during various stages of construction. These techniques involve the use of conventional fall protection systems including safety nets, guardrails, and personal fall arrest systems such as body harnesses, lanyards and lifelines.

Some Architects Are Hiring Again

After so much bad news, it’s encouraging to hear some good news about jobs. The trend bodes well for the construction industry.

Renewed demand for design services in some sectors justifies new hires, according to an article, "Architecture Employment on the Rise" published May 20 in Architectural Record (subscription required).

The article mentions job growth in firms doing projects for universities, the medical industry, government commissions and others.

Friday, June 10, 2011

Wells Fargo's Weekly Economic & Financial Commentary - June 10, 2011

- Our outlook for 2011 projects GDP growth of 2.4 percent in the United States, reflecting a weak first half and a pickup during the second half of this year.
. We expect 3.9 percent global growth for 2011, with solid gains in Canada, Korea, and each of the BRIC countries.
- Consumer credit has risen for the past seven months, but the pace of recovery remains modest compared to prior recoveries, reflecting the ongoing deleveraging of the American consumer.
. The ratio of revolving credit to personal income has declined steadily and is now at a level similar to that of 1994.
- Moderate inflation and low interest rates have prompted many firms to seek credit through the capital markets, signaling many firms perceive that current financing rates and conditions are favorable relative to those expected in the future, and companies are recognizing investment opportunities.

Thursday, June 9, 2011

Wells Fargo’s Monthly Economic Outlook – June 2011

- While our forecast calls for real GDP to rise at a 2 percent pace during the second quarter, the composition should be improved, as real final sales are expected to strengthen to a 3.3 percent pace from the 0.6 percent pace during the first quarter.
. Growth during the third quarter is expected to accelerate, as the Japanese earthquake led to supply shortages at a number of vehicle assembly plants, and a string of tornadoes and floods along the Mississippi River likely cut into job growth during the second quarter.
- We expect real GDP to rise 2.4 percent in 2011 and at a 2.6 percent pace during 2012, below the latest Blue Chip Consensus of 2.6 percent and 3.1 percent, respectively.
. Our longer-term outlook for 2012-2014 calls for 3.1 percent average growth.
- Subpar economic growth this year will have three main impacts the economy; unemployment will only decline gradually, the Fed will take its time removing the stimulus that it has put in place, and tax revenues will not grow fast enough to avoid the need to cut spending.

Wednesday, June 8, 2011

National Gypsum's 1/2" SoundBreak XP Gypsum Board

1/2" SoundBreak XP features the same sound-damping technology, mold-resistance and indoor air quality certifications as its 5/8" counterpart, but in a thinner, less expensive panel that makes it ideal for retrofits, remodels and other home uses. This acoustically enhanced panel answers a growing demand for increased privacy and less sound intrusion. 

Friday, June 3, 2011

Wells Fargo’s Weekly Economic & Financial Commentary – June 3, 2011

-     Nonfarm employment increased by just 54,000 during May, and previous gains in March and April were revised down.
.     Private sector payrolls, meanwhile, posted a gain of 83,000 for the month.
-     The unemployment rate rose 0.1 percentage points to 9.1 percent, as labor force growth exceeded the rebound in household employment.
.     Aggregate hours worked increased 0.1 percent and average hourly earnings rose 0.3 percent during May, suggesting wages and salaries rose modestly.
-     The ISM manufacturing survey fell sharply in May, declining 6.9 points to 53.5 as motor vehicle assembly plants and parts suppliers cut production.
-     The Consumer Confidence Index fell 5.2 points during May due to renewed concerns about the labor market and continuing declines in home prices.
.     Motor vehicle sales slid to just an 11.8 million unit pace in May, as dealers offered fewer deals on cars in short supply and buyers shied away from larger cars and SUVs.

Thursday, June 2, 2011

SFIA Receives ICC-ES Report

The Steel Framing Industry Association received an Evaluation Service Report (ESR-2457) from the International Code Council. The report covers both non-structural and structural stud and track framing. It also evaluates the structural properties of framing members to the 2006 International Building Code and 2006 International Residential Code. The 2006 IBC serves as the model code for many state and local building codes throughout the Unites States.

“The SFIA is an industry leader in code compliance and is the first industry association to obtain the ICC-ES Evaluation Report current to today’s standards, and which furthers our commitment to offer code compliant products,” said the association’s President Bill Courtney.

SFIA manufacturing members that participate in ICC’s quality inspection process and file with ICC-ES will be able to list their facilities in the report and mark their products with the report number.

SFIA manufacturing members will be added to the report on a continual basis as “Additional Listees.” The current version of the Evaluation Report can be found at

SSMA Approves Two Products

The Steel Stud Manufacturers’ Association has put its stamp of approval on two products, paving the way for members, distributors and contractors to diversify their offerings to customers.

ViperStud and Supreme Framing System, two well-known industry brands, have been adopted by the SSMA as association products—allowing members to license and offer the products at discounted rates. SSMA Director Dan Dry said the announcement will be good for everyone.

“We believe this move will help promote competition among manufacturers while building solidarity behind the brand of SSMA,” he said. “The organization is founded on this very principle.”

Members of the organization now have three SSMA-certified products to offer to their customers.

“It is exciting to see that SSMA has once again stepped to the forefront to improve the framing industry,” said SSMA Treasurer Marty Kiehm. “The certification programs implemented by SSMA for both structural and light gauge continue to build on quality standards and continuity.”