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MONDAY, NOVEMBER 30, 2015
QUOTE OF THE DAY: “It is important for Americans to know that human behaviors are by far the largest cause of fatalities." — NHTSA's Mark Rosekind
VOL. 117 — NO. 231
BRIGHT FUTURE Indstury experts reflect on 2015; look forward to strong 2016 Alex Zank
Despite a persistent labor shortage and other difficulties, those who make their living in construction have more good than bad to look forward to in 2016. That was the general consensus of a panel of industry experts who spoke during an event sponsored by Construction Market Data Group LLC and broadcast on the Internet earlier this month. Kermit Baker, chief economist at the American Institute of Architects, said the trades have been recovering from the recent recession at a faster-than-expected pace. “It’s really encouraging that we’ve seen this much growth in construction spending activity this year,” especially since it proved to
Staff photo by Kevin Harnack
[email protected] Two construction workers stand inside the curtain wall of the 833 East Michigan project on Monday as the nearby Northwest Mutual Tower project is reflected in the building’s glass façade in Milwaukee. Industry experts are excited about the future of construction in 2016.
be more than originally projected, Baker said. Ken Simonson, chief economist at the Associated General Contractors of America, reminded the audience that the industry is certainly not out of the woods yet, even if its prospects now appear sunny. U.S. construction spending hit a peak in the year leading up to
March 2006, when about $1.2 trillion was lavished on the industry. The number, though, was sent plummeting by the recession and has since been only inching it way back up toward the previous high point. In the 12 months leading up to September of this year, for instance, it was $1.1 trillion. Though certainly an improvement,
the figure is still 10 percent below the peak seen in March 2006. Construction employment is still about 17 percent below the peak that was hit in April 2006, when about 7.7 million people had jobs in the industry. The number for this October was 6.4 million. “It seems that the industry has a long way to go,” Simonson said. Please see FUTURE, page 3
US traffic deaths on the rise Sharp increase comes after small decline in 2014 Tom Krisher AP Auto Writer
DETROIT (AP) — After declining for most of the past decade, traffic deaths spiked 8 percent in the first half of this year, prompting a call from the nation’s highway safety chief to find ways to reduce the human errors that cause most fatalities. The new estimate released last week
by the National Highway Traffic Safety Administration comes as millions of Americans hit the road for the Thanksgiving holiday. AAA predicted that 42 million people drove 50 miles or more over the holiday weekend. Officials released a final number of fatal crashes for 2014, which showed a decline of 0.1 percent. This year, lower gas prices and an improving economy
are prompting people to travel more. Americans drove 1.54 trillion miles in the first half of 2015, up 3.5 percent from the same period in 2014, according to the Federal Highway Administration. But NHTSA Administrator Mark Rosekind said that not all of the increase could be attributed to people driving more miles. He suspects that texting and other distractions while Please see TRAFFIC, page 3
Traffic fatalities The National Highway Traffic Safety Administration is projecting an increase in traffic fatalities for 2015. Fatalities have steadily declined the past eight years, excluding 2012. Traffic deaths, January-June 25 thousand
20,244
20
Projected 16,225
15 10 5 0
’05
’07
’09
’11
SOURCE: NHTSA
’13
’15 AP
'TIS THE SEASON RISKY BUSINESS Proposals are due by 11 a.m. Dec. 3 for risk management services for a proposed nursing home in Merrill. PAGE 10
Our Around the Water Cooler experts have many reasons to give thanks.
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MONDAY, NOVEMBER 30, 2015
THE DAILY REPORTER
Every week, The Daily Reporter asks experts around the state for their take on the latest and most-pressing construction, development and government issues.
QUESTION OF THE WEEK At Thanksgiving, what are you thankful for?
STERN
BOYCKS
Anna Stern, vice president of Tri-North Builders, Fitchburg: “Construction-wise, I’m thankful to see our industry busy again. I’m also thankful for our team, our clients, and our partners.” Brad Boycks, executive director of the Wisconsin Builders Association: “I am thankful that the housing industry continues to rebound and that members of the Wisconsin Builders Association continue to provide high-quality housing options for the people of Wisconsin.”
STAMBORSKI
KLESSIG
Chris Stamborski, assistant director of municipal services at R.A. Smith National, Brookfield: “I’m thankful for the skilled craftsman we have in our construction industry. Even though it sometimes seems like a hassle, they efficiently get projects done and help improve commerce.” Steve Klessig, vice president of architecture and engineering at Keller Inc., Kaukauna: “I am thankful that I am an American. Americans are diverse,
SCHULZE
strong, productive, world leaders, world protectors, and we refuse to let terrorism defeat us!” John Schulze, director of government relations at the Associated Builder and Contractors of Wisconsin: “I am thankful to work for Associated Builders and Contractors of Wisconsin, our more than 800 members and their 1,000 apprentices across 12 trades who are personally addressing Wisconsin’s construction skills gap.”
VIEW FROM AROUND THE STATE
Dont' dismantle job agency — but fix it State legislators two weeks ago completed their task of dismantling the state Government Accountability Board. Legislators never hesitated: The dismantling bill was written and passed by both houses quickly and with little real discussion. Republican leaders were eager to wreak their vengeance on the nonpartisan board, largely because of its involvement in the John Doe investigations of the last several years and a handful of other issues. It’s too bad legislators haven’t shown the same urgency in dealing with the problems at the Wisconsin Economic Development Corp., which have been more worrisome than any of the issues revealed by the audits of the GAB. Serious changes are needed at WEDC, and although legislators have said they’re working on making those changes, their work seems to lack the same urgency that they brought to the job of tearing apart the GAB, the state’s elections and ethics watchdog agency. The Journal Sentinel reported that the Leg-
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islature’s budget office and attorneys have concluded that WEDC officials awarded $21 million in tax credits to companies but likely lacked the legal authority to do so. The finding by the Legislative Fiscal Bureau came in a private Aug. 19 letter to the WEDC. Other state attorneys from WEDC, the Department of Justice and the Department of Administration disagree, so the question is in legal limbo for now. Rep. John Nygren, R-Marinette, co-chairman of the Legislature’s budget committee, said that he didn’t believe WEDC had intentionally violated the law or had run the program any differently than it had been under the former Department of Commerce, the Journal Sentinel reported. But Nygren added that state law may need to be clarified because WEDC’s interpretation of it could end up tying the hands of future legislators and governors. “It is something we’re looking at addressing and clarifying,” Nygren said of the dispute over the law. That echoed the
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sentiment of GOP leaders in a meeting with the Journal Sentinel Editorial Board and reporters: Nygren, Assembly Speaker Robin Vos (R-Rochester) and Majority Leader Jim Steineke (R-Kaukauna) told the board they were working on proposals to overhaul WEDC in light of past problems at the agency. They should get to it. We also think Gov. Scott Walker’s concept of what WEDC should be remains sound. The agency was created in 2011 as a replacement for the Department of Commerce. Walker’s idea was to develop a quasi-public agency more streamlined and better able than previous efforts to promote economic development, in part by giving incentives to companies to expand and create jobs. That can still work, and changes can be made within the current structure to ensure that the agency can do its job properly and with appropriate oversight. Dismantling another agency is not required. But changes are — and they need to be made now. — Milwaukee Journal Sentinel
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MONDAY, NOVEMBER 30, 2015
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THE DAILY REPORTER
Labor shortage will continue to hamper industry FUTURE, from page 1
Taken individually, various segments of the construction industry are also showing encouraging signs. Spending on single-family residences, for instance, is more than double what it was during the recession, according to Baker’s data. Yet, even with the improvement, spending in that part of the industry is now only about half as brisk as it was at the peak. Spending on multi-family dwellings, meanwhile, has already surpassed its pre-recession peak. Before the downturn, $53 billion was the most spent in a year-long period on multi-family residences. That number fell to $15 billion during the recession, but has since rebounded to $57 billion. Commercial and industrial construction, meanwhile, appear to be doing similarly well. Those segments of the industry are only $11 billion short of the annual spending peak of $244 billion recorded
“
It's really encouraging that we've seen this much growth in construction spending activity this year." KERMIT BAKER, American Institute of Architects chief economist
before the recession. During the economic downturn, spending reached a low of $128 billion. Wisconsin developers appear to be doing their utmost to take advantage of the trends. The Minnetonka, Minn.-based Opus Group, for example, recently announced plans for a speculative industrial project in Mount Pleasant. Officials with The Opus Group said low vacancy rates in the market enticed them to put up the approximately 155,000-square-foot building to
meet current demand for industrial space. Speaking of the popularity of multi-family housing, Simonson said public demand simply seems to be shifting away from singlefamily residences. The result, seen between the start of 2011 and September this year, has been an “outstanding” rate of growth in spending on multi-family dwellings. To be sure, Simonson said, single-family investment is also on the rise but is going up only about half
as fast. Simonson added that he thinks spending on both types of housing will start to slow eventually. So why all the new spending on multi-family housing? Simonson attributed the increased demand to buyers’ and renters’ changing attitudes. More and more people — especially among those who are opting for multi-family housing — have taken to having smaller families, to living closer to cities and to avoiding cars as much as possible when they want a means of getting around. Baker, meanwhile, noted nonresidential construction has been surprisingly strong so far this year. Spending on that sector from January to September was up about 17 percent compared with what it was during the same period last year. Not surprisingly, the experts on the webinar said labor shortages will be the construction industry’s biggest hurdle in 2016.
Last year was the safest on record for traffic deaths
Staff photo by Kevin Harnack
TRAFFIC, from page 1
using smartphones was part of the cause, as well as drunken, drugged and drowsy driving, and increased driving by teenagers. NHTSA, he said, doesn’t have clear enough data yet to pinpoint exact causes. “These numbers are a wake-up call,” Rosekind said of the increase. He urged people to stop using their phones while driving, not to drink alcohol or use drugs and get behind the wheel, and to wear seat belts and motorcycle helmets. NHTSA said its research shows that human decisions cause 94 percent of all crashes. The agency plans to hold five meetings around the country early next year to get input on how to cut traffic deaths, followed by a larger meeting in Washington, D.C., that would yield recommendations to address human factors. “It is important for Americans to know that human behaviors are by far the largest cause of fatalities,” Rosekind said. Rosekind said 2014 statistics show that distracted driving caused about 10 percent of the 32,675 traffic deaths that year. But he said that since driver distraction is difficult to track, “that our numbers underestimated exactly what’s going on out there.” The slight drop in 2014 traffic deaths came after a decade that saw a 25 percent decline due to fewer miles driven, safer cars and public awareness of the dangers of
Motorists travel northbound on U.S. Highway 41 in Milwaukee on Wednesday. Government estimates show U.S. traffic deaths rose 8 percent for the first six months of 2015.
drunken driving. For 2014, the rate of fatalities fell to a record low of 1.07 deaths per million vehicle miles traveled. But Rosekind said 2015 estimates showed the death rate rising over 4 percent, which he called “troubling.” NHTSA’s numbers showed that 2014 was the safest year on record for people inside vehicles, with 21,022 deaths reported. Nearly half of those killed were not wear-
ing seat belts, even though belt use rose to 87 percent, Rosekind said. Bicyclist deaths declined 2.3 percent last year, but pedestrian fatalities rose 3.1 percent over 2013. Both appear to be rising slightly this year, Rosekind said. Drunken driving continued to cause about one-third of all traffic deaths in 2014, with 9,967 people killed. The safety agency will hold
meetings in February and March in Sacramento, Calif.; Boston; Denver; Atlanta and Dallas-Fort Worth to get input. After that, safety experts will meet in Washington, D.C., to come up with an action plan, Rosekind said. The plan will focus on human errors or choices that cause crashes, Rosekind said, adding that there is excitement over new technologies that can prevent some of those mistakes.
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MONDAY, NOVEMBER 30, 2015
Staff photo by Kevin Harnack
THE DAILY REPORTER
ON THE LEVEL | MATT BRUGGINK
DRIVEN TO SUCCEED
Drives to sites when he was young hook Bruggink on construction Jessica Stephen
Special to the Daily Reporter
M
att Bruggink isn’t always sure how to explain his work. “That’s a tough one actually because, as a project manager, we do have so many different responsibilities. We control every aspect of a project from start to finish; facilitate the whole thing, working with architects, engineers, clients, subcontractors. But really what it comes down to is I’m a builder.” It’s a title he’s revered since he was a kid, when his parents piled into the car to take him on a rolling tour of Milwaukee construction sites. “I loved having my parents drive me around to look at different construction sites,” said Bruggink, a senior project manager with C.G. Schmidt in Milwaukee. Even now, nearly 20 years into his career, Bruggink said there’s just something about seeing a building come together. “You put in all this effort and, at the end of the project, you can take a step back and say, ‘We built this building together.’ It’s a tremendous sense of accomplishment. There’s not many careers where you have something so tangible.” It’s a feeling that washed over him as he stepped on site at the Milwaukee Art Museum’s Calatrava addition — the first project Bruggink was assigned to when he joined C.G. Schmidt as a project engineer in 1997. And it’s palpable in his voice today as he talks about the Meadowland Research project in the Milwaukee County Research Park
GETTING TO KNOW BRUGGINK The Daily Reporter: The Daily Reporter: What surprises you most about your work? Matt Bruggink: Every day is a new challenge. There are new surprises every day, but you never know what they’re going to be. You really need to stay on your toes in this industry. As a construction manager, you’re dealing with weather issues, design issues, soil issues and subcontractor coordination issues. Ninety percent of what we do is problem-solving, all in an effort to keep a project on schedule while focusing on safety, quality and budget. Every day you show up and you don’t know what the challenge is going to be that day. TDR: What would you change about the construction industry? Bruggink: The last five years or so have just been so difficult. As our industry continues to emerge from the recession, I’d like to see management budgets and profit margins continue to creep upward for architects, engineers and the
“We’re coming up out of the ground with structural steel,” Bruggink said, a hint of that little boy in the backseat creeping into his voice. That he gets to lead the project is just icing on the cake. Our industry has a poor reputation of being confrontational and everyone pitted against each other. “I enjoy being the lead of the team,” Bruggink said. “It allows me to influence the overall ap-
subcontracting community to allow projects to be staffed and managed more appropriately, which in my mind encourages a more collaborative approach to projects and, in the end, drives more value for the customer. TDR: What do you consider your biggest achievement so far? Bruggink: Right out of school I was one of the first people on site on C.G. Schmidt’s management team at the Calatrava addition at the Milwaukee Art Museum. Four years and 9 months later, I was the last one to leave. When I got hired by the company I didn’t know that was the project I was going to be working on then. It was a very formative time. And being born and raised in Milwaukee, I’m definitely proud to have been part of such an iconic and culturally important facility in my hometown. TDR: What’s your biggest extravagance? Bruggink: My wife and 12-year-old identical twin boys
proach on a project.” For him, that means setting the tone for collaboration, instead of the adversarial approach so many associate with the industry. “For the last five years with the recession — that we’re still continuing to come out of — the margins and the budgets that everybody had in their contracts were so tight that everyone was already coming into the job at a disadvantage, and it made it very difficult to work in a collabora-
and I love to travel. In fact, our family motto is that we work to support our vacation habit, so I’d definitely have to say travel. TDR: What device could you not live without? Bruggink: Without a doubt, my computer. I guess I owe my mom a big thank you for making me take a typing class back in seventh grade — on an actual typewriter. I never would have thought I’d spend so much time at my keyboard as I do now. TDR: What object in your office means the most to you? Bruggink: I have a photo of my wife and kids and I in Alaska, taken outside of a small town named Talkeetna, with Denali in the background. I guess it reminds me of the many blessings I have in my life, and it reminds me of why I do what I do. TDR: Which words or phrases do you most overuse? Bruggink: Actually, I don’t think I have any, actually. Wait, no it’s probably the word “actually,” actually.
tive approach. “It was so bad a few years ago. I was on a project where every player at the table was only there because someone in their company had made an error in their estimate; every subcontractor was losing money. It was a horrible environment. Now that margins are creeping up and budgets are more realistic, we’re getting back to that collaborative approach. And I can help set that tone.”