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Category Archives: construction

May 19, 2009 – 6:57AM
Confidence among US homebuilders in May increased to the highest level since September, providing further evidence that the housing slump that started in 2006 may be closer to a floor.

The National Association of Home Builders/Wells Fargo index of builder confidence rose to 16 from 14 the prior month, the Washington-based NAHB said today, capping the first back-to-back gain since February 2008. A reading below 50 means most respondents view conditions as poor.

The biggest drop in residential construction on record has helped builders trim the glut of properties on the market while low borrowing costs and falling prices are attracting new buyers. Still, unemployment is at a 25-year high, foreclosures persist and credit conditions are tight for builders, indicating a housing recovery will be slow.

“Record high affordability, record low mortgage rates, and the government’s efforts to jump start economic growth, are giving potential buyers optimism,” Jennifer Lee, an economist at BMO Capital Markets in Toronto, said in a note to clients. Still, she said, “the supply of foreclosures that started to hit the marketplace over the last couple of weeks will be tough competition for these new homes”.

The Standard & Poor’s index of the biggest homebuilders closed up 7.5 per cent at 233.16 in New York trading after Lowe’s Cos, the second-biggest US home improvement retailer, said first-quarter earnings fell less than analysts anticipated. Lowe’s, helped by sales of more profitable shrubs and flowers, ended up 8.1 per cent at $US19.94.

The builder confidence index was expected to rise to 16 this month, according to the median estimate of 45 economists surveyed by Bloomberg News. Projections ranged from 13 to 20. The index reached a record low of 8 in January.

The gauge, first published in January 1985, averaged 16 last year.

The confidence survey asks builders to characterize current sales as “good,” “fair” or “poor” and to gauge prospective buyers’ traffic. It also asks participants to forecast the outlook for the next six months.

The builders group’s index of current single-family home sales rose to 14 in May from 12 last month. The gauge of buyer traffic was unchanged at 13. A measure of sales expectations for single-family homes over the next six months rose to 27 from 24.

Confidence rose in three of four regions of the U.S., led by a four-point gain in the West to 12 and a three-point gain in the Northeast to 18. Sentiment in the Midwest held at 14.

“Builders are responding to what they perceive to be some of the best home buying conditions of a lifetime,” NAHB Chairman Joe Robson, a builder from Tulsa, Oklahoma, said today in a statement. He cited borrowing costs, low prices and the federal government’s $US8000 tax credit for first-time buyers.

Federal Reserve Chairman Ben Bernanke this month told the congressional Joint Economic Committee that housing “is beginning to stabilise,” citing that as a reason why the economy will bottom out, then return to growth later this year.

Recent reports indicate Americans are more amenable to purchasing homes as affordability increases.

The Reuters/University of Michigan index of home-buying conditions, part of a consumer sentiment report released on May 15, rose to 161 this month from 146 in April. That level is “about equal to the average from 2002 to 2004,” Abiel Reinhart, an economist at JPMorgan Chase & Co., said in a note to clients.

The average on a 30-year fixed-rate home loan declined to 4.76 per cent in the week ended May 8 from 4.79 per cent the prior week, according to the Mortgage Bankers Association. The rate fell to 4.61 per cent in late March, the lowest level since the group began records in 1990.

The Commerce Department may report tomorrow that builders broke ground on more houses in April, adding to signs the recession is abating. Housing starts rose 2 per cent last month to an annual rate of 520,000, according to a Bloomberg survey. Building permits rose to a 530,000 pace, the survey said.

Still, some US builders are struggling.

Pulte Homes and Centex, the companies that plan to combine this year, reported quarterly losses that exceeded analysts’ estimates as the housing recession forced them to record $US762 million in land writedowns and property expenses.

Pulte, based in Bloomfield Hills, Michigan, reported a first-quarter net loss of $US514.8 million, or $US2.02 a share. The median estimate in a Bloomberg survey was 55 US cents. Centex reported a net loss of $US402.8 million, or $US3.24 a share, greater than the median estimate of $US1.11 a share.

“The operating environment for housing remained very difficult during the first quarter of 2009,” Richard Dugas, Pulte’s chief executive officer, said in a May 5 statement. “Although we are not ready to call a bottom in housing, we are nevertheless encouraged by our sales, traffic and cancellation trends seen in the first quarter that have continued into April.

BHP’s Olympic Dam mine to kickstart recovery

Jamie Walker and Michael Owen | May 02, 2009

Article from: The Australian
BHP Billiton has shrugged off the global economic blues to press ahead with plans to turn its Olympic Dam mine in South Australia into the largest open cut on earth and help kick the economy back into prosperity.

A 4600-page environmental impact statement, released by the company yesterday, set out an ambitious timetable for the conversion of the copper, gold, silver and uranium mine from underground to pit operations.

Work would start as early as April next year on the multi-billion-dollar upgrade.

Under BHP Billiton’s best-case scenario, excavation of the 1km-deep mine pit, and possibly construction of a pipeline to supply a gas power plant, would be under way by July next year.

By that time, a mini-city known as Hiltaba Village would be rising in the desert to house the thousands of workers needed for the project. This would be in addition to the expansion of the existing township of Roxby Downs.

The mine’s workforce would double from 4000 to 8000 when it reached full capacity next decade.

By then, Olympic Dam would be the world’s biggest single producer of uranium and one of the biggest of copper.

While the company stressed it would not release costings until the expansion received necessary environmental approvals from federal and state governments, and was then approved by the BHP Billiton board, its determination to see through planning will be a confidence-booster for the resource sector, hit hard by the global financial turmoil and reduced commodities prices.

The open cut envisaged by BHP Billiton at Olympic Dam would become the biggest man-made hole on the planet and yield $1 trillion worth of ore over its century-long life, more than $100million of which would be paid in royalties to the South Australian Government. Production would lift six-fold from 12million tonnes of ore annually to 72 million tonnes after 2020.

The news was welcomed by residents of the nearby mining town of Roxby Downs, where the boom had turned to gloom amid recent job cuts at Olympic Dam and falling local property values.

BHP Billiton will seek state and federal approvals to export up to 1.6 million tonnes a year of powdery copper-based concentrate with a low-level uranium content of about 2000 parts per million.

South Australian Premier Mike Rann, backed by the Howard government, was initially sharply critical of the company’s plan to send the concentrate to China rather than refine it here.

Mr Rann adopted a more conciliatory note yesterday, welcoming the EIS.

“We will work with BHP Billiton to maximise the number of jobs here … the point is it hasnot yet been approved,” Mr Rann said.

The existing underground operation at Olympic Dam currently ranks it as the 16th-largest in copper and third in uranium in the world.

Underground mining can extract only about 25 per cent of the ore containing recoverable quantities of copper, uranium, gold and silver; an open pit would allow up to 98 per cent of the known ore body to be exploited.

The proposed cut operation would work in tandem with the existing underground mine. The current smelter would also be expanded, although not to the extent that would be the case if two-thirds of the copper concentrate produced was not sent to China for processing.

Concern for the struggling Australian Giant Cuttlefish, which breeds in the area and was said by some conservationists to have been threatened by discharge from the desalination plant, have been dismissed by BHP Billiton.

After a specially extended 14-week public consultation period on the EIS, which ends on August 7, BHP Billiton will provide federal and state governments with a supplementary report for assessment. If the expansion were approved, the company’s board would make a final decision early next year.

South Australian Mineral Resources Development Minister Paul Holloway yesterday said the Government was not blinded by the wealth on offer at Olympic Dam.

“If there are issues we do not believe have been addressed properly, then we will ask BHP to reconsider them and make appropriate amendments,” Mr Holloway said.,25197,25416641-5006787,00.html

April 28, 2009 09:30pm

SOUTH Australia is well positioned to win the lion’s share of a predicted naval ship-building boom over the next 40 years.

The Federal Government is preparing to unveil its long-awaited Defence White Paper, outlining the future direction of defence policy and laying out tens of billions of dollars in high-tech defence acquisitions.

Defence analysts expect the White Paper, which could be released as early as today, to set out plans not only to replace the six Collins-class submarines, but also a virtual doubling of the underwater fleet once the first new subs enter service after 2020.

A move to bigger surface ships is also on the cards, according to sources.

Prime Minister Kevin Rudd, when in opposition, committed to build the next generation of submarines in Adelaide.

But the likelihood that the size of the submarine fleet will be doubled is a potential boon for the state. Members of Canberra’s defence community also expect the White Paper to call for a new class of larger “destroyer class” surface ships capable of much greater flexibility than the smaller frigate-sized vessels currently used.

Australia Defence Association executive director Neil James said the widely expected move to use some larger ships with greater “sea-keeping” abilities made good sense.

He said that would be a change from the Hawke and Keating governments’ thinking which had “saddled the navy with ships that are too small”.

“Bigger ships aren’t that more expensive to build and operate but they’re much more capable,” Mr James said.

Construction of the new ships would represent billions of dollars in extra contracts and could be split between shipyards in SA and Victoria.

The White Paper, the first such document since 2000, may also set the future for some of the smaller military bases like Adelaide’s Keswick, Warradale and Woodside barracks.,22606,25395863-2682,00.html

April 25, 2009 12:01am

CONSTRUCTION has begun at the $118 million Honeymoon uranium mine in SA’s north-east, 37 years after yellowcake was first found at the site.

Canadian-based Uranium One and its Japanese joint venture partner Mitsui & Co are building the mine, which will begin production in the second half of 2010.

The mine is SA’s third and Australia’s fourth uranium mine and the first since the Labor Party scrapped its `no new mines’ policy in 2007.

Uranium One and Mitsui have already invested $39 million in the mine and will spend a further $79 million to bring the mine into production. One hundred and twenty will work on the site during the construction phase until early next year, after which between 50 and 70 people will operate the project.

Four hundred tonnes of uranium oxide will be extracted from the deposit each year, generating $80 million.

Uranium One executive vice president Greg Cochran said the construction of Honeymoon marked a new era of mining development in the state.

“It has been a long time between drinks as some might say in the development of uranium mines in Australia,” he said.

“There is no doubt Honeymoon is unique. For so long it represented the hopes and aspirations of an industry that legitimately wanted to pursue its business, but was artificially withheld and prevented from doing that. Now that has all changed.”

Mr Cochran said Uranium One was also undertaking drilling work at Gould’s Dam, 75 km north-west of Honeymoon, which is earmarked to come on stream as Honeymoon winds up in six years.

“That is our existing plan – we anticipate that Gould’s Dam would be a replacement for Honeymoon.”

Mr Cochran said the design of Honeymoon would allow for plant and equipment to be moved to other mines at a later date. Most of the uranium oxide produced will be sent to Europe, the U.S. or Canada, where it will be converted before being sold to Japanese and European buyers for nuclear energy generation.

Speaking at the ceremony yesterday, Premier Mike Rann said the change in ALP policy would ensure future growth in SA’s mining sector.

“It was critically important for South Australia’s future development, that we changed the policy which was essentially an artificial impediment which would have stopped a whole series of mines from going ahead,” Mr Rann said.

Speech given on Wednesday, 4 March 2009

Australia, indeed the world is facing the double crunch.

How to achieve a low carbon economy must be seen as both an imperative and an opportunity. As we rebuild our economy from the financial crisis, we can set Australia up for a sustainable future.

Australia must position itself to ensure that we have the knowledge and skills to capture at least a quarter of a trillion dollar share of what will be a global green products market of more than three trillion dollars.

The challenge is to re-skill workers in existing blue collar jobs to ensure they can manufacture, install and operate new technologies and to educate generations of students and young workers to take up new green jobs.

Industry, being business and unions, must drive demand for an intensity of skills effort like never before and governments must be a partner in this endeavour.

Phillip Bullock, our chair this morning, is, as you know the chair of Skills Australia, and Skills Australia is well placed to deepen workforce planning and frame the necessary priorities for skills development in partnership with the VET community.

These measures are essential for competitive advantage in a low carbon future.

Professor Garnaut’s report tells us that decisive and early action is needed if Australia is to enjoy sustained economic growth and prosperity.

We can and must grow jobs for our economy and reduce our environmental footprint at the same time.

Yet far too little attention has been paid so far in Australia to the skill requirements for a more sustainable economy.

The Challenge
To understand the green skills we need now and into the future, we need to have some idea of what employment in a sustainable Australia will look like.

People talk of a new ecological industrial revolution, and of the potential for extraordinary growth in new “green” markets.

This has been reinforced by China’s massive spend of more than one fifth of its six hundred billion dollar stimulus package on renewable energy and related construction, products and services.

And before President Obama declared a US spend of $115 billion, he stated the following:

“…everywhere we look there is work to be done. The state of the economy calls for action, bold and swift and we will act…We will harness the sun and the winds and the soil to fuel our cars and run our factories”.

If Australia is not to be left behind, to miss out on a solid share of these new economic and environmental imperatives, then we need the policy settings that:

drive increasing demand for the design and construction of energy and water efficient buildings, infrastructure and transport systems,

ensure jobs are created in new eco industries – solar, wind, hydro, biofuels and hybrid combinations of these, and

plan for additional jobs – in design, development, installation and operational pursuits.

Australia is well placed to benefit from increasing demand for clean technologies. ‘The Green Gold Rush’ is a study commissioned from Cambiar by the ACF and the ACTU. Based on the premise that by focusing on the segments with existing competitive advantages Australian policy makers and industry will maximise the chances of Australia succeeding in green markets, Cambiar assessed 30 potential green industries.

As a results Australia’s best bets are in six sectors:

renewable energy
energy efficiency
green buildings
waste and recycling

It is also our assessment that, based on Australia’s capacity, we can, with the right policy settings, achieve an extra 800,000 jobs within 15 years.

There are small but viable operations in all these sectors and they are set to expand.

Demand is also increasing for measures to make existing structures and processes more environmentally friendly.

This market for “retro-fitting” is enormous and government policy setting can drive this to new heights.

The residential initiatives for insulation and solar in the recent stimulus package …the pink bat strategy…for more than 2 million houses is a great boost to our effort in energy efficiency to lowering utilities costs for vulnerable households and for the demand for skills.

Likewise the green screen for schools will drive demand for renewed skills from more and more workers in construction and related manufacturing and services.

Then consider the potential for retro-fitting existing commercial buildings.

Buildings account for around 23 percent of Australia’s green house gas emissions. Ninety-eight percent of Australia’s office blocks are regarded as energy inefficient.

According to the Intergovernmental Panel on Climate Change, retrofitting and replacing equipment in buildings has the largest potential within the building sector for reducing greenhouse gases by 2030.

Even with the continued growth of the building sector, most of the structures that will be built in 2030 have already been built. Retrofitting will play a critical role in reducing emissions.

The industry argues that “accellerated depreciation” or a “green depreciation” incentive for a transition period will kick-start a major effort. We urge government to consider this as a matter of some urgency.

The skills challenge
Sustainability will become central to business strategy. Integrating sustainability into all aspects of their business – into the products they make, into their operations and processes, and into their accounting practices, they will increasingly demand green skills and knowledge.

Are we up to it? As an education and training community can we do it.

As I said earlier, in preparing for a greener economy today and into the future, we face two major skills challenges.

The first is to green existing jobs. This is crucial to meet current demand for retrofitting and the re-tooling of industry so vital to ensure our existing industries continue to grow.

The second is to train new workers in the appropriate skills, so we can meet the demand for employees with the right skills in renewable industries and new green technology as they develop.

Greening old jobs
A greener, more sustainable economy doesn’t mean that we just train up some new workers in green skills and they clean up after the rest of us.

Greening existing jobs is critical to reducing greenhouse emissions.

It is particularly important in sectors with a high environmental impact – including building and construction, energy, transport and agriculture. Activities in these high-impact areas account for around 70-80% of overall resource use and emissions. They employ around 3 million workers.

A recent report by the CSIRO suggests that, even with major environmental reforms, employment in these industries will continue to grow strongly.

As these industries respond to the demands of a greener economy and policy environment, jobs will require new skills.

Workers in these industries need training and up-skilling so that they can adapt to new technology and new ways of working.

And it has already been said that we need to up-skill existing workers so that we can respond to the present and ever-growing demand for retrofitting.

Demand for energy efficient alternatives is already outstripping the number of workers who can do this kind of work.

A good example was the government subsidy to encourage the conversion of cars from petrol to LPG. People who were keen to take up this opportunity found themselves waiting in a long line, because there simply weren’t enough mechanics with the skills to do this work.

There is a similar story on the take-up of solar energy. And, as we have noted, we don’t have nearly enough skilled workers in the range of occupations needed to retrofit buildings.

New green jobs
Our second skills challenge will be in anticipating the future demands for green skills in emerging industries.

We need to prepare new workers for the skill requirements inherent in green jobs. We also need to ensure that our transition to a greener more sustainable economy is not stymied by a shortage of adequately trained workers.

A recent report by the CSIRO for the Dusseldorp Skills Forum found that our current approaches to green skills are grossly inadequate. No-one collects systematic data on the skills and knowledge base of the workforce necessary to sustain the shift to a low carbon economy. Yet a good understanding of green skill requirements in a range of industries is a precondition to taking action.

We also need much better data on consumer demand for green products and services. We need this so we can anticipate future demand and ensure we train an adequate number of workers in green skills.
Unlike nations like Germany or the UK, we do not have a green skills jobs target. We must rectify this to drive ambition, investment, planning and skills demand.

Our response
The massive mobilization of skills and training required will require commitment and efforts by everyone – by governments, businesses, unions, the community sector, environmental organisations and VET institutions. We all need to do our bit.

And we need to deepen our efforts now.

There are already a lot of good initiatives and efforts out there. Industry Skills Councils have begun to respond to the growing need for VET to accommodate green skills and knowledge. There are now specific, industry-based competency standards for sustainability and guideline competency standards that can be taken up in any industry sector. Green apprenticeships exist in a range of industries, including in construction and manufacturing.

A number of the states have provided funding to industry associations to develop green plumbing initiatives, which assist plumbers to become trained and accredited in household water and energy efficiency. There is also great demand for ‘eco-smart’ electricians.

In July this year, the ACTU issued a Joint Statement with the Australian Conservation Foundation, the Australian Council of Social Services and the Climate Institute. This statement called for a fair and effective response to climate change. It recommended the following for greening Australian jobs:

Skills Australia should lead a national program to identify and stimulate the green skills, knowledge and work needed for a low-carbon economy;

By the end of 2010, at least 40,000 training opportunities in the Productivity Places Program should be allocated to the development of green skills in priority areas. This includes building and construction, energy, agriculture, and green finance, auditing and accounting;
Australia’s universities, TAFE and training sectors should create ‘green collar partnerships’ to advance the workplace and industry skills, knowledge and innovations required for the transition to a low-carbon economy;

Funds should be allocated immediately for sustainability training, skills and workplace programs. This should be boosted from 2010 with a proportion of revenues from the proposed Emission Trading Scheme.

As we propose in the Green Gold Rush, we need to:

Expand green education in executive, strategy and finance roles, to meet needs from increases in corporate responsibility for environmental management and risk, and enable integration into business strategy and planning.

Assist in the penetration of skills and tools to comprehend environmental impacts and mitigation measures with model ‘organisational environmental management systems’.

Support the funding needed for professional development training to address environmental challenges and their solutions – for example, skills shortages in environmental impact and cost benefit analysis was brought to our attention in roundtables.

Integrate environmental education across all curricula. Greater awareness of environmental issues and their solutions helps drive regulatory, consumer and business responses, and

Share best practice across sectors. Government can help ensure the many examples of best practice are shared across the diverse group that provides environmental education and skills training. An important part of this process is ensuring the transfer of best practice across the interface between education, training and industry.

Climate change and the environment is the challenge of this era. The ACTU rejects the notion that climate change solutions are a growth deficit. If we’re smart about it, responding to climate change can mean massive opportunities for the creation of sustainable, quality jobs.

We now stand at the beginning of a major structural transition towards a greener, more sustainable Australia. We need to intensify our efforts to ensure that we have the right policies in place.

The right policies are fair ones – ones that ensure that working Australians and their families are not put at risk and that assist low-income households with the costs associated with transition.

The right policies are also ones that make the most of the opportunities that the transition to a low carbon economy will bring for working Australians and for the Australian economy.

Green skills shortages already exist. The pace of green job creation will only accelerate in the years to come.

As we intensify effort and investment in skills we need to strike the right balance between re-training and up-skilling existing workers and investing in skills for new green jobs.

Because in a more sustainable, environmentally friendly Australia, all jobs must be varying shades of green.

Thank You

Further reading
Green Gold Rush report: almost a million green jobs for Australia by 2030

John Garnaut
April 14, 2009

CHINESE investors are punting on an imminent economic recovery, with the Chinese Government underscoring its relative financial strength by pledging $US25 billion ($35 billion) in new funds and loans to South-East Asia.

Investors pushed the Shanghai Composite Index up 2.7 per cent late yesterday and 38 per cent so far this year, breaching the 2500 mark for the first time since August. The market was buoyed after the Premier, Wen Jiabao, revealed in a newspaper interview that industrial production had risen 8.3 per cent in the year to March. Steel and resources company shares were up strongly. Commodity importers were also anticipating a pick-up in underlying steel consumption, with iron ore stockpiles in the 20 major ports up 12 per cent to 66.9 million tonnes in the month to yesterday, according calculations by Steel Business Briefing.

“This is reflecting the crazy amount of iron ore imports we’ve seen in the last few months,” the China editor of Steel Business Briefing, Paul Bartholomew, said.

“All of this stimulus money is starting to have an impact on construction volumes and therefore demand for machinery and raw materials,” Arthur Kroeber, principal of the Beijing consultancy Dragonomics, said.

“Pretty much every Asian economy is seeing a significant rebound in its export growth based on sales to China,” he said.

China stands alone among the major economies in boasting strong government, banking, corporate and household balance sheets despite the global financial crisis.

In recent weeks the Chinese Government has deployed its relative financial strength to help stabilise other nations, particularly its neighbours.

According to the Foreign Minister, Yang Jiechi, Mr Wen was ready to announce $US15 billion in credit facilities at the summit of ASEAN leaders before it was cancelled when protesters occupied the venue.

Almost all sectors of the Chinese economy appear to have bottomed out since the export shock and construction slump of late last year. Most of the new activity appears to flow directly from the Government’s all-out fiscal and monetary stimulus effort.

The construction industry says it expects up to 100,000 people to be laid off over the next 12 months, despite the Federal Government’s stimulus efforts and the recent series of interest rate cuts.

The pessimistic forecast is contained in the Master Builders Association’s latest national survey of sentiment within the building and construction sector.

The association’s chief economist, Peter Jones, says the building sector has been helped by interest rate cuts and the first home owners grant.

Nevertheless he says building activity is expected to slump further, with dire consequences for jobs.

“Master Builders expects that the job losses in the industry over the next 12 to 18 months will be in the order of 50,000 to 100,000,” he said.

Mr Jones says the survey confirms there is a drought in finance for construction projects.

“Over one third of respondents to the March quarter survey said that a lack of finance was a major constraint on their business,” he said.

“Builders are certainly exceedingly pessimistic about the outlook, despite some glimmers of hope in the residential sector, and the outlook for the sector is for a reduction in both output and employment.”

Mr Jones has used the survey’s findings to call for further interest rate cuts and more stimulus measures in the May Federal Budget, including an extension of the first home owners grant beyond its June 30 cut-off.