Newsletters of the PHCC of Greater Boston

From the desk of Hugh Kelleher, Executive Director

Email Hugh with comments or suggestions for future items.

Construction Spending: Nationwide construction spending was at a decade-long low in January, and it dropped again in February. Residential spending is 66% below the peak in early 2006, and non-residential spending is 42% below the peak in January 2008. But the Mass. economy appears ready to rebound more quickly than that in other parts of the country.

A Revival? The Boston Business Journal (BBJ) says that 242 projects worth $27.5 billion may be teeing up for development in Boston. "The blueprints comprise more than 90 million square feet of potential development....many focus on the city's growing life sciences sector."

Vertex: In a major coup, Boston may be getting a major biotech building on the South Boston waterfront. Vertex Pharmaceuticals is expecting that approval of its new Hepatitis-C drug will fund construction of 1 million square feet on Fan Pier. They have tentatively signed a 15-year lease for $1.1 billion. Currently Vertex is in Cambridge. The space they leave behind is expected to be quickly filled by another biotech firm.

Casinos: There is a reasonable chance that Governor Patrick, House Speaker DeLeo and Senate President Murray are working on a deal that would allow some casino construction here in Massachusetts.

Rental: According to the New York Times, Boston housing rents are expected to rise 3.5% this year, compared to a decline of 6% in 2009. The Boston Redevelopment Authority says that this year construction will start on 21 residential buildings, with 1855 apartments.

U-Mass.: This spring $300 million in construction begins at the U-Mass. Boston campus.... Next door, the $150 million Edward M. Kennedy Institute for the Senate recently broke ground. Peter Meade, the Institute's Director, who spoke at our Industry Night last fall, has been named the new head of the Boston Redevelopment Authority (BRA) which controls all major development in the city.

Football: People complained when the new high school in Newton cost more than nearly $200 million--including a fine athletic facility. One Texas town is spending $60 million--on its football stadium. The athletic director says, "Football has always been big here. This is Texas."

Census: Interesting statistics continue to emerge from the 2010 census. For the first time in 130 years, the population of Boston grew at a faster rate than that of the state as whole.... The city's housing stock grew by 8.2% over the decade, largely because the Menino administration has supported new housing construction. Outside of Boston, there has been much less population growth, often because of development restrictions.... Mass. is one of the three richest states in the nation, with average incomes about 25% above the national average.

Employment: The Week reports that in the first four months of the year, employment for Americans with a college degree grew by 521,000. For those with only a high school diploma, employment fell by 318,000.

Union Membership: Massachusetts still has more union members than most states, but even here union membership has declined. Union members accounted for 14.5 percent of wage and salary workers in Massachusetts last year, down from 16.6 percent in 2009, according to the U.S. Bureau of Labor Statistics. There were 415,000 union members in Massachusetts last year, down from 476,000 in 2009 but up from a modern low of 379,000 in 2007.

Nationally: Union members accounted for 11.9 percent of US workers last year. Only 6.9 percent of workers in the private sector are unionized - the lowest rate in more than a century. The drop was largely due to unemployment. Employed union workers averaged $917/week, $200 more than those not in unions.

New York: The New York Times (NYT) reports that just as the city is beginning to see more construction, some major jobs are being built with non-union labor. 30 union collective bargaining agreements expire in June, and there is big pressure for wage and benefit concessions.

Business Interest: If you run a business, starting July 21 you can set up an interest-bearing commercial checking account. Expect banks to compete for your business.

Tar Sands: A major federal decision will soon be made about whether to allow construction of a 36-inch underground pipeline from Alberta to Texas. The high-pressure pipe would contain oil from Canada's 'tar sands'--at a temperature of 150°. Environmentalists oppose the project--in part because a barrel of this oil requires four times as much water as producing a barrel of conventional oil. Decision will be made by the State Department's Hillary Clinton, because pipeline would cross an international border.

Energy Options: The Japanese nuclear disaster is likely to have a major impact on the US nuclear construction industry--which until recently seemed on the verge of a renewal. More than 30 plants were on the drawing boards in 2008, but currently only one, in Tennessee, is under construction, though land excavation has begun for another plant in Georgia. The Obama administration has continued to support such construction.

Nope: Just this month the company planning the largest nuclear project in the US--two giant reactors in South Texas--announced that it was writing off its investment of $331 million. NRG said they were throwing in the towel because the situation in Japan had caused daunting problems.

Taxes: Small business owners and others may be interested in the recent report in the NYT showing that despite worldwide profits last year of $14.2 billion, and US profits of $5.1 billion, General Electric paid no federal taxes. In fact, it claimed a tax refund of $3.2 billion. The top US tax rate for corporate profits is 35% -- but many companies pay far less because of tax shelters. GE has the advantage of an in-house tax staff of 975, and has spent $200 million on lobbying over the past decade.

State Street: Locally, State Street Corp. earned $1.6 billion last year. Taxes: $0. Refund: $885 million. State Street also received $2.2 billion in taxpayer bailout in 2008, and recently laid off 1,000 workers.

Museums: There is a new entry in the growing field of industrial-type museums here in the Boston area. The new Waterworks Museum at the Chestnut Hill Reservoir contains remarkable machinery that in the 19th century began pumping water throughout Boston and other communities. The waterworks were the largest in New England, and also home to the nation's first water supply testing lab.

Plumbing Museum: Not to be outdone, our own Plumbing Museum in Watertown continues to attract many visitors. It even has an on-line blog, where, a few days before the recent royal wedding in England, you could read about a British company that is selling William and Kate Toilet Seat Covers.

Transportation $$: Those who are deeply committed to cutting back the size of government are taking some major steps. In Florida, new governor Rick Scott is refusing to accept $2.4 billion in Federal money for a new high-speed rail line between Orlando and Tampa. The project would create hundreds of jobs, but Scott fears it could become a boondoggle costing the state money. Florida legislators are suing the governor over the issue. Some of that federal money may be diverted to restore a railroad bridge that crosses the Merrimack River in Haverhill.

Sheet Metal License: In February, the grandfathering of sheet metal licenses in the Commonwealth ended. Over 14,000 people applied to be grandfathered. From now on, people interested in obtaining sheet metal licenses will have to pass state exams.... All corporations or businesses doing sheet metal work will also need a sheet metal business license. The new Sheet Metal Board expects to have a new state code in place by next January. It plans to base the code upon the Uniform Mechanical Code.

In Case You Missed It: The Second Annual World Plumbing Day was March 11.

Advances: A study by Nobel economist Robert Fogel shows that technology is having a huge impact on human evolution. Human height and longevity is changing more than at any point in history. For instance, the average height of American men increased four inches between 1880 and 1980, and we are living longer than ever. Economists say there are three major reasons for this evolutionary acceleration: improved nutrition, medicines and sanitation. Modern plumbing, and the improved health it brings about, thus seems to play a key role in this evolutionary advance.