NACM's Secured Transaction Services (STS) brings best-in-class Notice, Lien and Bond Claim service options to today's credit professional. Our UCC Filing Services provides assistance in the preparation, filing and maintenance of financing statements.
Enormous British Construction Firm is Liquidated, Leaving Small Contractors with Unpaid Bills
Jan. 18, 2018
Britain’s largest corporate failure in a decade concerns 200-year-old construction firm Carillion, which employs 43,000 people, forcing the government to guarantee a broad spectrum of public services, from schooling to roads.
The company has been forced into liquidation following contract delays and slow new business, leaving the company with at least $3 billion in debt and pension liabilities, Reuters reported. “Its demise threatens to hurt smaller suppliers, merchants, rivals and Britain’s biggest banks.”
Small contractors are likely to feel the hit acutely, as Rudi Klein, head of Britain’s Specialist Engineering Contractors’ Group, “estimated Carillion had left a trail of 1.2 billion pounds in unpaid bills to thousands of small subcontractors,” Reuters said. Examples of unpaid bills to smaller firms, so far, include $150,000 pounds owed to a Northern Irish engineering company and $2 million pounds to a concrete frame manufacturer in northwest England.
The U.K. government had hired Carillion to work on 450 projects, including the building and maintenance of hospitals, schools, defense sites and a high-speed rail line, Reuters said. Some $1.3 billion pounds worth of state contracts were awarded to the firm after it began to fall into financial instability last July.
David Lidington, the minister in charge of running Britain’s government, said the government would pay the company’s public sector workers if they carried on in their duties, but workers on private contracts will only be paid by the government for 48 hours. The firm had projects in Britain, Ireland, Canada, the Middle East and North Africa, and worked on London’s Royal Opera House, the Channel Tunnel, the Copenhagen Metro, the Suez Canal road tunnel and Toronto’s Union Station, Reuters said.
– Nicholas Stern, managing editor
Housing Market Index Stays Strong, Despite Dip from December
Jan. 17, 2018
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index dipped two points to 72 in January, according to preliminary results released on Jan. 17.
In NAHB members’ evaluation of this month’s housing market conditions, the latest survey showed results falling within the consensus range of 70 to 75, but below the prior month at a revised 74. Bloomberg reported that traffic is a still strong proponent behind the January results, which overall, maintained a portion of the four-point surge in December.
The traffic component was recorded at 54—below the revised 58 in December. However, year-over-year, traffic is high compared to 51 in January 2017.
“The sudden gain in traffic points to new interest among first-time buyers,” Bloomberg reported.
Despite the slight decline from last month, current traffic suggests a buyer surge in the new home market, with current and future sales holding onto long-term highs.
Additional strengthens included present and six-month sales at 79 and 78, respectively. Present and six-month sales were at a revised 80 and 79 in December.
—Andrew Michaels, associate editor
Rise in Immigrant Construction Labor Force Continues as Native-Born Workers Remain Reluctant
Jan. 16, 2018
Research from the National Association of Home Builders (NAHB) suggests that the share of foreign-born workers in the U.S. construction labor force has been rising since the housing recovery, accounting for close to a quarter of workers.
“The time-series analysis [of American Community Survey data] shows that the rising share of immigrants in construction cannot be explained by an unusually high number of immigrants joining the industry,” wrote Natalia Siniavskaia, with the NAHB. “Rather, a slow, delayed and reluctant post-recession return of native-born workers underlies the shift towards the higher reliance on immigrants in the construction work force.”
From 2004 to 2016, the aging U.S. workforce became more dependent on foreign-born labor, as its portion of overall workers increased to 17% in 2016 from 15% in 2004, NAHB said. For the construction industry, the reliance on foreign-born workers rose quickly during recent years as labor shortages proliferated in several trades. In 2016, immigrant workers in the construction sector grew to the highest level recorded by the American Community Survey—24.4%— from 19.9% in 2004.
In recent years, the flow of new immigrants into construction trades has diminished, highlighting the fact that native-born workers in the industry have been slow to return to their trades after the Great Recession, NAHB said. Nearly 1.7 million native-born workers left the construction industry during the housing downturn and 1.5 million had not returned as of 2016.
– Nicholas Stern, managing editor