How Basic Costs Affect the Construction Industry – An Analysis

It’s a fact that most industries in the past decades have been suffering from the effects of inflation and never-ending rise of production costs. The construction and engineering industry has not been spared the dilemma. Aside from dealing with shortage in labor and manpower, material costs are also taking a toll on the productivity of the construction industry.

The worker shortage

Fewer employees might translate to more profit for some industries, but this is not the case for the construction industry. According to James R. Bogonet of Bogonet Construction Associates Inc., a D.C. firm that specializes in building and renovating interior office space:

“I’ve had to go out and work weekends to keep a project on schedule. The construction industry is suffering a severe worker shortage that is helping drive up the cost of development, including wages and office rental rates.”

The trend is continuous, because as early as year 2000 more than 240,000 jobs related to the construction industry are glossed over for higher-paying jobs. It’s a case of double jeopardy- if the firms do not pay enough, they don’t get staffed. But they lose immense profit when they do pay higher salaries to construction workers. The problem is cyclical.

Prices are going up, up, up…

According to Engineering News-Record, an industry publication: “National construction costs are up 2.3 percent this year.”

The problem calls for more capital outlay on the part of the clients, because to handle for the backlog due to shortage of workers and even tighter deadlines because of being understaffed, it takes $125-$150 to construct a single square foot of office space in the prime areas of United States.

This figure exponentially rises when we’re talking about the largest buildings and skyscrapers that are either leased or rented out to individual office-space holders.

Subcontractors decline

Smaller outfits are being more selective because of the relative shortage of manpower in the construction business. According to David Dempsey, a senior vice president for Spaulding & Slye Colliers, a development and construction group in the District:

“Ten years ago, if you put out a bid for masonry work, you might get twenty some responses. Today, you’re lucky if you get six.”

As we can see here, the construction industry is experiencing a very tight labor market. In the event that such labor conditions exists, every cost rises to match the unceasing demand. On the other hand, when labor is plenty, the prices drop because of the distributive quality of supply and demand scales.

According to Andrew Craig, vice president of construction and design for Staubach Co., an international commercial real estate brokerage:

“There is so much demand for development in this area that the problem takes on more urgency. We have to be more strategic, more nimble. They (the clients) want to know, `Why am I paying $50,000 for something I paid $30,000 for last year?’ You have to help them understand what’s happening in the marketplace.”

Craig’s analysis is quite dynamic because it highlights a basic truth about all industries- that in the end, if the market is sluggish, everything topples to the ground.

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Industry – Italy’s Export Industries – The Top Five

Latest reports released on Nov 13 from Bloomberg show Italy has emerged from recession and GDP grew by 0.6 percent. The recovery of Germany and France, the country’s largest export markets, also sounded a note of optimism.

Mechanical machinery and equipment
Italy’s engineering sector, covering mechanical machinery and equipment, is now the second largest in the EU and fast catching up with leading manufacturer Germany. It produced 18.7% of machinery in the EU in 2008 and also made significant gains in Russia, Africa and South America.

The sector is dominated by small, family-owned businesses, with the average size of workforce being around 13 people, which is the lowest in Europe. There are over 41,000 manufacturing and engineering companies in Italy and while some claim the sector’s strength lies in the very personal and ‘small is beautiful’ approach of a family business, others claim that this is a risky strategy as old-fashioned attitudes and family loyalties may impede progress in a global market.

Italy’s growing success in the sector has been through focussing on its strengths – quality of design and steady output of mid-range engineering products from small, flexible companies with their sites firmly set on the world markets.

Basic metals and fabricated metal products
Considering Italy has very few mineral resources and has to import most of its raw material, its metal industry is a large and important one in the nation’s economy, particularly regarding exports. Half of the country’s iron output comes from the Isola d’Elba off the coast of Tuscany.

Italy has 50,000 businesses and 850,000 workers in the metal industry, the majority in the north. In the iron and steel industry many of the large companies are in the centre and south of the country.

Transport equipment
Italy’s automobile industry is the country’s largest employer with an estimated (2004) 196,000 employees. The automobile sector is dominated by Fiat which ranks number ten in the world’s top motor vehicle manufacturing companies, although as a country Italy ranks only 17th in terms of motor vehicle producing countries. Fiat went into partnership with US auto manufacturer Chrysler in May 2009, a clear indication that is now seeking to conquer international markets after its dominance of the domestic one. It also intends to bring the Alfa Romeo back to the US market. The company posted its highest ever profits in the last quarter of 2008, defying the global downturn. As well as production and export of iconic luxury brands like Lamborghini, Ferrari and Maserati, the transport export sector also includes city cars, passenger vehicles, transport vehicles, trailers, and auto parts and accessories.

The government’s introduction of incentives to trade in older cars for more energy efficient ones has resulted in new car registrations rising by 16% in October.

Chemical products and synthetic fibres
This is a crucial sector for Italy With a turnover of 57 billion euros it is the fourth largest chemical producer in the EU. There are three thousand companies in the sector employing around 126,000 people.

Of the 200 or so industrial districts in Italy, almost all have some connection with the chemical industry. The main concentration of Italy’s chemical business is in the north of the country, which accounts for 68% of the chemical companies. Lombardy (Lombardia) alone accounts for almost half of that percentage and is the top region in Europe in terms of number of companies in the chemical industry and second largest region in terms of employees.

Italian association Fedechimica conducted a recent survey on why foreign companies appreciated doing business with the Italian chemical industry and the top factors included: the quality of human resources, the market size and quality of customers, the quality and reliability of equipment suppliers and the quality of R&D.

The spread of ownership in the Italian chemical industry is 41% Italian SMEs, 23% medium and large Italian companies and 36% foreign companies.

In June 2009 Italian oil and gas group ENI announced it was investing 700 million euros in the industry between 2009 and 2012.

Electrical Equipment, Electrical, Electronic and Optical Apparatus
Estimates put the value of the global electronics market at $2 trillion per year, $275 billion of that is on semiconductors. The sector has suffered from the global economic crisis, but analyst firm Gartner reported in October 2009 that the industry is showing signs of recovery, although this will not stabilise until 2010, with mobile phones expected to lead the recovery.

Italy’s electronics industry suffered a decline at the end of 2008 and the first quarter of 2009, but a recent report by the ISAE (Istituto di Studi e Analisi Economica) on how the industry itself felt about recovery showed that companies in the centre and south of Italy felt more optimistic about the future. This was probably because they were less affected by the international market while the larger companies in the north west and north east had been harder hit and so were more cautious. That said, the signs of recovery are more widespread in the north.

Another report from the Servizio Studi e Ricerche di Intesa Sanpaolo focussed on the vital role of human resources in the electronics industry. The sector employs 6.8% of Italy’s manufacturing workforce and has the highest percentage of workers in the EU The sector has seen a 10% rise in the number of highly skilled white collar workers in the last ten years from 20% in 1997 to 30% in 2007, higher than other manufacturing industries. Add to this the high percentage of high sklilled blue collar workers and the electronics industry in Italy has one of the most highly skilled workforces in Europe, with the exception of Garmany.

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For Effective Cooling Mechanism Use Only High Pressure Compressors Which Are of Stupendous Quality

From time immemorial the air compressors have been part and parcel of electro mechanical industry and have been facilitating a number of important functions in the field of automobile industry, mechanical industry, and other commercial fields. These are an important part of the commercial and residential areas where these air compressors are used into important electrical and mechanical systems like refrigerators, coolers, air conditioners and also the bike you ride. These equipments are popular because they offer clean, convenient, safe and flexible natural resource which can be used permanently in different applications to increase the efficiency and functionality of the equipment.

The equipment is very convenient in facilitating the change of state of air from gaseous state to kinetic energy and therefore finds useful application in many devices. This change of state is done by the compressing of the air in gaseous state after which it is again released but in sudden gushes of air which surely means the change has been done into the kinetic state. For making this process more manageable and convenient the air can be easily stored into well structured compressor tanks. In the mechanical industry high pressure compressors are used in various machines and equipments which require quick conversion of the change of this natural source so that the various functions in the machines are better facilitated and equipped. There are various types of compressors available in the market which can be used by the professionals according to the different needs and requirements. These include the oil free compressors too. In these oil free compressors the used air is easily compressed with the help of the given screws and there is no application of an oil seal. These compressors have a much low maximum discharge capability. These are used in medical research and also in the manufacturing of semiconductors.

Contrary to oil free compressors the high pressure compressor is used for quick air cooling where the change in energy state results in change in temperature of the room. Thus these compressors are very useful to attain good results. Compact air compressors are also used for personal usage by many consumers as they are easier to carry around and keep safely far away from the reach of the kids I the house. The compact ones function without the traditional storage tanks which are a very important feature in the usual compressors which are used for industrial purposes.

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Grease and Oil Seals – Vital Components for the Industry

There are numerous industrial mechanical systems that produce items designed to make our life more comfortable. Quite a few of such systems need to be totally enclosed units to prevent entry of outside elements and getting mixed up with the system. Any machine would get harmed when dust, dirt or fluids enter into it. While it is vital to keep certain elements from entering into the mechanical system, it is equally vital to introduce certain items such as lubricants within the system. Modern industrial automation, using machine tools of varying sizes and capacities, makes it imperative to have certain systems closed and keep them like that only. Smooth running of these systems would not be possible in the absence of oil seals and greases. Thankfully, there have been tremendous developments in the field of creating these two elements, making the machines a lot more effective. Such developments have been made to their design and manufacturing.

There is no denying the fact that seals and greases have been highly instrumental in keeping our machines running successfully for so many years. During the early periods of the automotive industry, it was equally imperative to use oil seals and greases as it is now. However, back then, the manufacturers and technicians had to do with basic seals. It is interesting to note that leather was the most frequently used material for this purpose and some of the older models of automobiles used seals made from rope! You may find it surprising to know that such seals proved helpful. One reason for that is the vehicles of that time did not move as fast as the present generation of vehicles. As speeds started going up, better seals and greases were needed. That is what led to the development of more useful and effective oil seals and greases.

Initially, they developed oil seals and rubber grease that required the support of a metallic body. Needless to say, such seals proved very useful and helped the automotive industry to gain reliability and enhance the performance of vehicles, making them more powerful at the same time. Though an automobile is just one of the machines requiring oil seals and greases, the simultaneous development of automobiles makes it so easy to appreciate how vital is the role of such a small component. These days, we have a lot of companies manufacturing a very wide range of grease and oil seals. They respect the specific design requirements of various manufacturers of original equipment.

The development of these two items is an ongoing process, enabling a number of industrial machines to perform to expected levels of efficiency.

Seals are essentially needed to keep the spaces closed and thus they prevent the entry of detrimental objects and elements, and keeping the lubrication circuit in order for a continuous and efficient running of the machinery. This would appear a simple matter to those people not connected with the industry, but the rest realize the vital role played by seals and oils in keeping the wheels of industry moving efficiently and gainfully.

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What Do Mechanical Engineers Study?

It is also useful to understand how this knowledge can be applied to a variety of work situations. Mechanical engineers create, design and develop a range of machines and products. The different areas in which mechanical engineers work include chemistry, computer science, aerospace studies, communications and construction.

Working as a mechanical engineer can sometimes be very challenging and sometimes frustrating. The job involves quite a lot of problem solving and therefore determination and intelligence are essential. If you work hard and apply yourself you could find that you can get involved with some groundbreaking projects that will allow you to really make your mark in the industry,

Mechanical engineers need to be able to determine the strength of various materials. This is vital because they need to assess how much weight something can hold and establish what is safe. Their general knowledge of materials should be first class because they also need to determine what materials are best for the job they are working on. Different materials have different uses and if applied correctly can serve a good purpose. They need to be able to look at the properties of different materials and put them into relevant categories.

When thinking about the construction of buildings, mechanical engineers need to consider the way that the building and the rooms will be heated. They will then be able to determine how to regulate the temperature of the building. This concept is called heat transfer.

More and more engineers are being asked to control and be aware of potential vibrations. This varies across different countries and the type of project they are working on. For example, areas that are at risk of Earthquakes may need to call in specialist earthquake engineers to prevent damage occurring.

Mechanical engineers spend a significant amount of their time taking data measurements so that they can interpret the data that is available to them. They may also need to present this data to managers and clients before proceeding with any work.

Other things that Mechanical engineers need to study and build up a strong knowledge of include kinematics, statics, manufacturing and machine design. If this article has highlighted your interest in mechanical engineering then you might want to check out some engineering careers websites.

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