1. A PERSPECTIVE ON THE U.S. CONSTRUCTION INDUSTRY Luke M. Snell Director, Concrete Industry Management Del E Webb School of Construction Arizona State University Tempe, Arizona

2. U.S. CONSTRUCTION INDUSTRY Estimated Value of Construction in Place (2004): $1,009 Billion Private Sector $ 773 Billion Public Sector $ 236 Billion Total $1,009 Billion Private Sector Residential Construction $549 Billion Non-Residential Construction $224 Billion Total $773 Billion

3. CONSTRUCTION INDUSTRY Construction Management/Design Build approaches have become popular in the Private Sector Non-Residential Projects. Public Sector has just started using these methods.

4. CONSTRUCTION INDUSTRY IS A MAJOR CONTRIBUTOR TO THE U.S. ECONOMY Representing 8 % of the Gross Domestic Product (GDP) Gross Domestic Product equals the Value of Goods and Services Produced in a Country.

5. GDP OF THE LEADING COUNTRIES IN 2003 U.S. $11 Trillion China $6.5 Trillion Japan $3.6 Trillion India $3 Trillion Germany $2.3 Trillion

6. GDP PER CAPITA OF THE LEADING COUNTRIES IN 2003 Luxembourg $55,100 U.S. $37,800 Norway $37,700 San Marino $34,600 Denmark $31,200 China $5,000 India $2,900

7. U.S. CONSTRUCTION INDUSTRY Employees – 6 Million Workers equaling 5 percent of the workforce. Construction Growth in the last 30 years has been poor. Record Year was 1972 (11.2% of the GDP).

8. 67 68 6971 72 73 7476 77 78 7981 82 83 8486 87 88 8991 92 93 9496 97 98 9901 02 03 Annual Construction as % Of Gross Domestic Product (GDP) (Source: U.S. Department of Commerce) 197519851995 10.9% 10.2% 9.4% 9.8% 9.6% 8.2% 8.1% 8.4% 11.2% 7.9%

9. U.S. CONSTRUCTION INDUSTRY REASONS FOR SLOW GROWTH Quality Problems Construction Accidents/Injuries Schedule/Cost Overruns Lack of Research/Innovations Poor Management Excessive Regulation Increasing Litigation Lack of Resources (Materials, Skilled Labor)

10. U.S. Share in International Construction

11. DECLINING U.S. SHARE IN FOREIGN MARKETS Reasons High overhead (competing with Korea, China, Japan and others) Lack of knowledge of how work in foreign countries is bid and executed. Language problems Unfamiliarity with Metric Measurement. Reluctance on the part of the U.S. constructors to work abroad.

12. COST INCREASES EXAMPLE PROJECT #1 Denver International Airport, Denver, Colorado uCost Overrun: $3 Billion uSchedule Delay: 18 months

13. EXAMPLE PROJECT #2 St. Louis Airport – East Terminal uCost Estimate 1994 - $61 Million uCost Estimate 1997 - $97 Million uCost Estimate 1999 - $106 Million

14. CONSTRUCTION SAFETY Construction Industry Employees 5% of the Workforce but Responsible for 20% of the Accidents. Considered 4 Times More Hazardous than Other Industries Fatalities in 2003: 1,060 Cost per death: Average $1,000,000 Cost to Construction Industry due to: uFatalities $12 Billion uDisabling Injuries $8 Billion uTotal $20 Billion

15. Construction Industry Fatalities 1984-2003 2,200 1,060

16. Construction Industry Disabling Injuries 1984-2003 220,000 390,000

17. Work-Related Deaths and Injuries in 2003 IndustryDeathsDisabling Injuries All Industries4,5003,400,000 Agriculture710 110,000 Mining, Quarrying120 20,000 Construction1,060390,000 Manufacturing490 460,000 Transportation770 320,000 Trade380 710,000 Services550 890,000 Government420 500,000

18. Top 10 Violations: Construction DescriptionNumber of Citations 1Scaffolding8,377 2Fall Protection5,403 3Excavations2,024 4Ladders1,736 5Head Protection1,594 6Excavations, Requirements for Protective Systems1,410 7Electrical, Wiring Design & Protection1,397 8Electrical Wiring Methods, Components & Equipment 1,379 9Construction, General Safety & Health Provision1,215 10Fall Protection Training Requirements1,191

19. CONCLUSIONS Construction Industry has to: Improve the project delivery process to: uImprove Quality uManage Costs and Schedule uControl Construction Accidents/Injuries Increase Research Spending Promote Training of Construction Skills Encourage Undergraduate/Graduate Education in Construction