Contractor May Be Sued for Lost Profits
When an oral surgeon hired a contractor to construct his office and was unable to use part of the finished space due to construction problems, he sued the contractor for damages, including loss of profits. A Connecticut court held that that there might be lost profits if the facility was not open and available for business in time, and that this could have been reasonably foreseen at the time the parties entered into the contract. As a result, the court ruled that the surgeon was entitled to have a jury determine whether lost profits should be awarded as part of compensatory damages.

In a recent issue of the online newsletter ConstructionRisk.com, Attorney J. Kent Holland noted this case demonstrates why contractors and design professionals are seeking waivers of consequential damages in their contracts with project owners. Some of the AIA standard form agreements contain such waivers to protect the contractor against consequential economic damages such as lost profits or lost rents. For that reason, project owners who believe such economic damages may be a significant part of their project risks may decide to strike out of the contracts such waivers of consequential damages.

Attorney J. Kent Holland, Jr., is a risk management services consultant for the Environmental and Design Professional Unit of Arch Insurance Group, Inc., New York City. To receive a copy of his online newsletter, go to ConstructionRisk.com. 

Steel Imports On the Rise, Availability Higher
Several recent indicators show the situation with steel availability and pricing is getting brighter. The American Iron and Steel Institute reports steel industry shipments and imports have increased 11.1% during the first four months of 2004 compared to 2003.  April imports of 2.4 million tons edged 0.3% over March. In addition, AISI reports that 3.1% more steel is being produced domestically this year, bringing the total to 37.1 million tons through May 8. The domestic capacity utilization rate, year to date through May 8, is 90.4%, up from 84.2% during the same period a year ago. 

Another key factor that may contribute to a more favorable outlook is a slowing construction industry in China, whose skyrocketing demand for construction materials of all types helped fuel the steep increases in prices.

For additional information, visit the American Iron and Steel Institute's Web site or the Steel Framing Alliance's Web site. [return to top]

Cement Shortages Still Regional, Says PCA
The Portland Cement Association says that cement shortages are still a regional problem, not a national one.

According to PCA, shortages are currently limited to the Southeast, Southwest and the New York/New England regions. A recent survey conducted by the association revealed that 27 states reported ample supplies of cement, while 23 states reported evidence of a shortfall. While these 23 states accounted for 48% of total U.S. cement consumption during 2003, it is worth noting these percentages inflate the magnitude of the shortage since shortages are not apparent in all portions of these states.

To address industry concerns about cement supplies, PCA is producing a series of reports. To read the latest Cement Shortage Assessment Update, go to the PCA Web site.   [return to top]

A Strengthening Job Market
Above-trend growth in economic output (real Gross Domestic Product) continues to generate strong growth in payroll employment, despite strong growth in labor productivity (output per hour). Payroll employment rose by 248,000 in May, and the gains for March and April were revised upward.

The cumulative increase in payroll employment since the cyclical low last August now stands at 1.4 million jobs. The May level was still 1.3 million below the pre-recession peak in early 2001, but maintenance of strong job growth in coming months conceivably could eliminate that gap by the November elections. [return to top]

Welcome, Wichita, to the NCBC!
Thanks to the efforts of NCBC Vice Chairman Elton Parsons, the Wichita (KS) BA has a new Commercial Builders Council.  Many members of NAHB—and your local BA—are involved in some aspect of commercial building. If you’d like to get together regularly with your fellow commercial builders to network, share ideas and exchange strategies, consider forming a Commercial Builders Council in your HBA. Materials and other information are available to assist you—contact Petra Beane-Moore at 800-368-5242 x8433.
[return to top]

Fall Board: Plan to Attend
The NAHB Fall Board of Directors Meeting and the Commercial Builders Council Board of Trustees Meeting will be held in Columbus, OH, Sept. 29-Oct. 3, 2004. Be sure to plan now to attend the meetings and events. The Commercial Builders Council Spring Board Schedule is listed below. For additional information, contact Carmel Nayman at 800-368-5242 x8410.

Italics – NAHB meetings

Wednesday, Sept. 29
12:00 noon – 1:00 p.m.	2004 Executive Board (Lunch)
1:00 – 5:00 p.m.	2004 Executive Board Meeting
Thursday, Sept. 30
8:00 – 10:00 a.m.	Build PAC
8:00 – 10:00 a.m.	Joint Council Chairs
Friday, Oct. 1
9:00 - 11:00 a.m.	Build PAC
11:30 a.m. - 2:30 p.m.	NCBC Trustees and Planning
Evening	Cap Club
Saturday, Oct. 2
7:30 - 10:30 a.m.	Area Caucuses
11:00 a.m. - 2:00 p.m.	Joint 2004 Executive Board
2:00 - 5:00 p.m.	2004 NAHB Board of Directors Meeting
Evening	Gold Key
Sunday, Oct. 3
8:00 a.m. - 12 noon	2004 NAHB Board of Directors Meeting

[return to top]

CSI Releases Numbers for New MasterFormat
The Construction Specifications Institute has released the section number and titles for the upcoming 2004 edition of MasterFormat™, the specifications-writing standard for most nonresidential building design and construction.

The new edition reflects numerous advances in construction technology since the last revision to this widely used standard. “Instead of waiting for the release of the complete new edition later this year, we decided to post the new section numbers and titles now so users may start familiarizing themselves with the changes and begin making plans for their transition to the new edition,” said CSI Executive Director Karl Borgstrom, Ph.D. 

A significant difference in the 2004 edition is a new six-digit number system that replaces the five-digit format used in the 1995 edition. The new system creates room for users to develop and systematically organize more comprehensive and detailed specifications, according to CSI. For more information, visit the CSI Web site.
[return to top]

Call for Entries: July 26 Is Deadline for Awards of Excellence
NCBC's 2005 Awards of Excellence competition is underway. If you have not yet sent in your entry form, be sure to do so by July 26! Don't miss out on this opportunity to have your commercial building project recognized by your peers and showcased in front of a national audience.

The Awards of Excellence are open to all builders, architects, designers, engineers, contractors, developers and building owners nationwide, and any nonresidential project or facility in the U.S. that was completed after Dec. 31, 2001, is eligible. 

A downloadable entry form is available on the NAHB Web site. [return to top]

New Tennessee Law Targets Commercial Properties
A new Notice and Opportunity to Repair law has been enacted in the state of Tennessee—but this law is targeted toward commercial, not residential, properties. The legislation, which was signed by the governor on May 24, 2004, requires a claimant to file a complaint with the builder shortly after discovering the defect. The contractor and subcontractors are given a chance to inspect the defect and offer to fix the defect, settle the claim monetarily or dispute the claim. The claimant can then either accept the contractor's offer or reject it.

A construction defect can include defective material, products or components used in the construction or remodeling; a violation of the applicable codes in effect at the time of construction or remodeling; a failure of the design of a structure to meet the applicable professional standards of care at the time of governmental approval, construction or remodeling; or a failure to construct or remodel a structure in accordance with accepted trade standards for good and workmanlike construction.

A copy of the law is available at the Tennessee General Assembly’s Web site. [return to top]

The Condo and Apartment Market Is Heating Up
NAHB research indicates that building activity in the condominium and apartment sectors —particularly at the high end — remains robust due to low interest rates, the strengthening job market, steady appreciation and the need for cheaper alternatives to single-family dwellings.

According to NAHB Chief Economist David Seiders, "Since job creation often leads to new household formations — and new households often tend to be renters or first-time condo buyers — it looks like there are better days ahead for the multifamily segment of the housing market." Most industry insiders believe the apartment market will hold up for at least the next six months, though some markets may experience supply-and-demand imbalances. [return to top]

July 9 Is Deadline to Sign Up for 2005 Committees and Councils
NAHB wants members with leadership skills and industry expertise to serve on various committees and councils for the 2005 term. The deadline to apply for an appointment is July 9. Members may serve on no more than two standing committees or councils. The term begins immediately following the 2005 International Builders’ Show in Orlando and continues through the completion of the 2006 IBS.

Apply online by filling out the 2005 appointment sign-up form; access the form on the NAHB Web site. Return the completed form by e-mail, fax or mail to NAHB as indicated.

Final appointments will be made after the NAHB Fall Board of Directors Meeting, and members will be notified by mail. For more information, e-mail Cynthia McKinley or call her at 800-368-5242 x8346. [return to top]

HBA Member Advantage: With Viking Office Products, Save 10%
As a member of NAHB, you get an extra 10% off office products already discounted up to 69% off list. Order from Viking, and you’ll get free delivery, overnight—almost anywhere for orders of $25 or more, with same-day delivery in many metro areas. Viking offers a one full-year, unconditional guarantee, hassle-free returns and 30-day free trials (with approved credit). To get your extra 10% discount, call 800-421-1222 and mention code “HB,” or visit www.vikingop.com and enter “HB” in the comments field at checkout. For office supplies, furniture and much more, it’s time to join in the savings. Take advantage of this NAHB member benefit right now.
[return to top]