CONSTRUCTION IN THE U.S.A.

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CONSTRUCTION

IN THE US A

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CONSTRUCTION IN THE U.S.A.

December 2017 Caroline Devine

Flanders Investment & Trade 720 Rusk Street. Ste. 200

Houston, TX 77002 United States of America

houston@fitagency.com

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TABLE OF CONTENT

1 GENERAL OVERVIEW 2

1.1 Construction by region and type 2

2 TRENDS & OPPORTUNTIES 2

2.1 Rebuilding the Gulf Coast after Hurricanes 2

2.2 High growth regions 3

2.3 Sustainable materials 3

2.4 Energy & infrastructure 4

3 ADVICE FOR FLEMISH COMPANIES 4

3.1 Regulatory bodies 4

3.2 Licenses & Partnering with Locals 6

3.3 Certifications 6

3.4 Trade Associations 7

4 SOURCES CONSULTED 9

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1 GENERAL OVERVIEW

1.1 CONSTRUCTION BY REGION AND TYPE

The U.S. Census Bureau estimates that during the first 10 months of 2017, total construction spending amounted to $1,029.6 billion, an increase of 4.1 percent above the first 10 months of 2016.¹

In 2015, construction spending on new starts in the U.S. hit $469.5 billion, with most growth in spending on residential construction led by multi-family units². While single-family homes remain popular in the U.S., with growth at 14% in 2015, multi-family residential construction grew at 18% the same year. New York spent the most on new construction starts in 2015, with

$46.6 billion, followed by Dallas with $17.8 billion, Houston with $16.7 billion and Los Angeles with

$11.7 billion.

2 TRENDS & OPPORTUNTIES

2.1 REBUILDING THE GULF COAST AFTER HURRICANES

One significant trend impacting the construction sector in the U.S. is the necessity of rebuilding areas impacted by major hurricanes and preventing future flood damage to areas that have seen record rainfall. According to Time Magazine, the 2017 hurricane season was the second deadliest hurricane season for the U.S. since 1900 and generated an estimated $200 billion in damage³.

After hurricanes there is an immediate need for temporary shelters, mold remediation and prevention after water damage, foundation systems that raise buildings off flood plains and technologies that prevent and control flooding of major infrastructure like hospitals, roadways and airports.

1 U.S. Census Bureau Monthly Construction Spending, October 2017 https://www.census.gov/construction/c30/pdf/release.pdf 6 Dec. 2017

2 Forbes Building Boom Towns: The Metro Areas with the Most New Construction

https://www.forbes.com/sites/erincarlyle/2016/02/10/building-boom-towns-the-metro-areas-with-the-most- new-construction/#13d8233c718b 6 Dec. 2017

3 Time Is This The Worst Hurricane Season Ever? Here’s How it Compares http://time.com/4952628/hurricane- season-harvey-irma-jose-maria/ 6 Dec. 2017.

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Opportunities exist along the coast of the Gulf of Mexico from Texas to Florida and Puerto Rico for building materials and technologies that address water and wind damage from flooding, rain and 100mph+ winds.

2.2 HIGH GROWTH REGIONS

Seattle, Washington, has had the most cranes of any city in the U.S. for the second year in a row.⁴ Other cities with higher-than-average numbers of construction cranes for high-rise buildings are Portland, Chicago, Denver, San Francisco, Los Angeles, Austin, Washington D.C. and New York according to The Seattle Times. The apartments, condos, office buildings and hotels being built in these high-growth cities provide opportunities for Flemish building material manufacturers that can provide materials suitable for use in skyscrapers and high-density living.

The U.S. Census Bureau reports that The South of the United States is home to 10 of the 15 fastest-growing large cities of 2016. ⁵ Four of the top five fastest growing cities in the U.S. by percentage of population are in Texas, including Conroe (part of the Houston greater metropolitan area), Frisco and McKinney (both part of the Dallas Metropolitan area), and Georgetown (part of the Austin metropolitan area). Five of the top 10 cities on the U.S. Census list of cities with the largest numeric increases in population are from Texas, as well, including San Antonio, Dallas, Fort Worth, Houston, and Austin. While California and the East Coast are traditionally thought of as large construction markets, building and construction companies are advised to take note of opportunities in Texas, Washington, Florida and the Southern United States in general as high growth regions to sell products and services.

2.3 SUSTAINABLE MATERIALS

The percentage of commercial office space certified by LEED or Energy Star as “green” or

“efficient” has risen to 38 percent from less than 5 percent in 2005, according to a study published by CBRE in partnership with Maastricht University⁶. The top three markets for green building adoption by percentage of square footage are Chicago, San Francisco and Atlanta.

4 The Seattle Times Seattle has most cranes in the country for 2^nd year in a row – and lead is growing

https://www.seattletimes.com/business/real-estate/seattle-has-most-cranes-in-the-country-for-2nd-year-in- a-row-and-lead-is-growing/ 6 Dec. 2017.

5 U.S. Census Bureau The South is Home to 10 of the 15 Fastest-Growing Large Cities

https://www.census.gov/newsroom/press-releases/2017/cb17-81-population-estimates-subcounty.html 6 Dec. 2017.

6 U.S. Green Building Council 2017 Naitonal Building Adoption Index releases data on growth

https://www.usgbc.org/articles/2017-national-green-building-adoption-index-releases-data-growth 6 Dec.

2017.

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The huge increase in green building certifications as either a means for energy savings or a selling point for environmentally-conscious companies and consumers in the United States is an opportunity for sustainable and eco-friendly building companies from Flanders. There is

significant market interest in both materials for new buildings and remodeling old buildings to meet new standards. The adoption of sustainable building practices in the U.S. has largely been driven by the private sector, with an emphasis on cost savings more than carbon emissions.

2.4 ENERGY & INFRASTRUCTURE

The U.S. presents significant opportunities for companies experienced in building materials or construction of large scale renewable energy projects and infrastructure projects.

Wind electricity generation capacity was 82 gigawatts by the end of 2016, according to the U.S.

Energy Information Administration⁷. The forecast for the end of 2017 is to bring the total wind capacity to 88 gigawatts and 96 by 2018. Solar energy generating capacity has enjoyed similar growth since 2016 growing from 22 gigawatts to a projected 31 by the end of 2018.

As Flanders already generates a large amount of solar and wind energy, Flemish building companies with prior experience designing and building solar and wind farms are encouraged to take advantage of this U.S. energy trend. The trend toward wind, solar and sustainable energy also presents opportunities for residential and commercial building material products that incorporate photovoltaics or generate energy. Use of these materials is currently uncommon in the U.S. but expected to grow along with generation capacity.

3 ADVICE FOR FLEMISH COMPANIES

3.1 REGULATORY BODIES

Construction projects and construction materials are regulated by agencies at several levels of government in the United States. In addition to federal regulations your product or services may be subject to regulations from the state, city and other levels of local government. For this reason, and because the U.S.A. is a litigious society, we encourage you to consult regulatory agencies and meet with lawyers experienced with similar products or on similar projects early in your plans.

The list below includes some of the agencies whose regulations you will need to comply with.

This list is not comprehensive and regulations vary significantly by state:

7 U.S. Energy Information Administration Short Term Energy Outlook http://www.eia.gov/outlooks/steo/report/renew_co2.cfm 6 Dec. 2017.

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United States Environmental Protection Agency (EPA)

EPA Construction Sector regulatory information:

https://www.epa.gov/regulatory-information-sector/construction-sector-naics-23 Clean Construction: https://www.epa.gov/cleandiesel/construction-and-agriculture

United States Department of Labor Occupational Safety and Health Administration (OSHA)

OSHA Safety and Health Regualtions for Construction:

https://www.osha.gov/pls/oshaweb/owastand.display_standard_group?p_toc_level=1&p_part_nu mber=1926

United States Customs and Border Protection (CBP)

CBP Importing into the United States Guide for Commercial Importers:

https://www.cbp.gov/sites/default/files/documents/Importing%20into%20the%20U.S.pdf

CBP Tips for New Importers and Exporers:

https://www.cbp.gov/trade/basic-import-export/importer-exporter-tips

CBP Basic Importing & Exporting:

https://www.cbp.gov/trade/basic-import-export

CBP Determining Duty Rates:

https://www.cbp.gov/trade/programs-administration/determining-duty-rates

United States Department of Justice Civil Rights Division

Americans with Disabilities Act (ADA) Standards for Accessible Design:

https://www.ada.gov/2010ADAstandards_index.htm

National Fire Protection Association (NFPA)

NFPA Codes & Standards: http://www.nfpa.org/Codes-and-Standards

Health and Environmental Agencies of U.S. States and Territories

The U.S. EPA maintains an online list of health and environmental agencies of U.S. states and territories:

https://www.epa.gov/home/health-and-environmental-agencies-us-states-and-territories

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3.2 LICENSES & PARTNERING WITH LOCALS

Construction projects in the United States typically need to be carried out by contractors licensed at the state or local level. Information on which agencies oversee licensing in each state can be found on the Contractor’s License Reference Site at http://www.contractors-license.org/.

State licensing agencies and lawyers experienced in similar projects will be able to give companies the most up-to-date advice about acquiring a license and what type of additional permits may be required for construction projects in that state.

There are certain restrictions on projects carried out for the U.S. Government or in ports, limiting the type of activities that may be performed by non-U.S. citizens or non-U.S. companies.

These restrictions include the Buy American Act and Buy America Act, which require the U.S.

Government and Federal Transit Administration to prefer U.S. made products, and the Jones Act, which limits certain activities in U.S. Ports to U.S. flagged ships and crew.

Because of these regulations, you may choose seek to a partnership with a U.S. company that is already equipped with the appropriate licenses to carry out actual construction or installation work.

Flemish companies are encouraged to consult a lawyer early when partnering with U.S.

companies on projects, as the U.S. is a litigious society. Any contracts should be reviewed by a lawyer before they are signed.

3.3 CERTIFICATIONS

In addition to obtaining contractor’s licenses before carrying out construction work in the United States, Flemish companies may obtain certifications to give their products or services a competitive edge in the relatively large U.S. market.

Below is a list that includes a few, but not all, of the certifications companies may pursue:

United States Green Building Council

LEED Certification or Rating: https://new.usgbc.org/leed#how-leed-works

United States Environmental Protection Agency

Getting Ceritifed by the EPA: https://www.epa.gov/home/getting-certified-epa Lead-Safe Certification: https://www.epa.gov/lead/getcertified

Comparison of Green Building Standards:

https://www.epa.gov/smartgrowth/comparison-green-building-standards

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Underwriters Laboratries Environment (UL Environment)

Greenguard product certification: http://greenguard.org/en/manufacturers.aspx

American Concrete Institute

Certifications: https://www.concrete.org/certification.aspx

American Society for Testing and Materials (ASTM) International Certification Programs: https://www.astm.org/CERTIFICATION/index.html

3.4 TRADE ASSOCIATIONS

Trade associations may provide contacts and information, in addition to hosting networking events. Here are just a few of the many trade associations in the U.S.A. for building materials and construction services:

Associated General Contractors of America https://www.agc.org/

2300 Wilson Blvd. Suite 300 Arlington, VA 22201

Phone: +1-703-548-3118

American Concrete Institute https://www.concrete.org/

38800 Country Club Dr.

Farmington Hills, MI Phone: +1-248-848-3800

American Society of Concrete Contractors https://www.ascconline.org/

2025, S. Brentwood Blvd.

Suite 105

St. Louis, MO 63144 Phone: +1-314-962-0210

Associated Builders and Contractors http://www.abc.org/

440 1^st St., N.W., Ste. 200

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Washington D.C. 20001 Phone: +1-202-595-1505

American Institute of Constructors http://www.professionalconstructor.org/

19 Mantua Road Mount Royal, NJ 08061 Phone: 703-683-499

American Subcontractors Association https://www.asaonline.com/eweb/

1004 Duke St.

Alexandria, VA 22314 Phone: +1-703-684-3450

Mason Contractors Association of America https://www.masoncontractors.org/

1481 Merchant Drive Algonquin, IL 60102 Phone: +1-224-678-9709

Metal Construction Association http://www.metalconstruction.org/

8735 W. Higgins Rd. Suite 300 Chicago, IL 60631

Phone: +1-847-375-4718

National Association of Homebuilders https://www.nahb.org/

1201 15^th Street NW Washington, DC 20005 Phone: 1-800-368-5242

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Pipe Line Contractors Association http://www.plca.org/

1700 Pacific Avenue, Suite 4100 Dallas, TX 75201-4675

Phone: +1-214-969-2700

American Iron and Steel Institute http://www.steel.org/

25 Massachusetts Avenue, NW Suite 800 Washington, D.C. 20001

Phone: 202-452-7100

American Welding Society https://www.aws.org/

8660 NW 36 Street #130 Miami, FL 33166-6672 Phone: +1-305-443-9353 4 SOURCES CONSULTED

Carlyle, E. (2016, February 10). Building Boom Towns: The Metro Areas with the Most New Construction. Retrieved from Forbes Business:

https://www.forbes.com/sites/erincarlyle/2016/02/10/building-boom-towns-the-metro- areas-with-the-most-new-construction/#13d8233c718b

Contractor's License Reference Site. (2017). Retrieved from Contractor's License Reference Site:

www.contractors-license.org

Gunby, J. (2017, July 20). 2017 National Green Building Adoption Index releases data on growth.

Retrieved from U.S. Green Building Council: https://www.usgbc.org/articles/2017- national-green-building-adoption-index-releases-data-growth

Johnson, D. (2017, September 24). Is This the Worst Hurricane Season Ever? Here's How it Compares. Retrieved from Time Magazine: http://time.com/4952628/hurricane-season- harvey-irma-jose-maria/

Rosenberg, M. (2017, July 11). Seattle has most cranes in the country for 2nd year in a row -- and lead is growing. Retrieved from The Seattle Times:

https://www.seattletimes.com/business/real-estate/seattle-has-most-cranes-in-the- country-for-2nd-year-in-a-row-and-lead-is-growing/

U.S. Census Bureau. (2017, May 25). The South is Home to 10 of the 15 Fastest-Growing Large Cities. Retrieved from United States Census Bureau:

https://www.census.gov/newsroom/press-releases/2017/cb17-81-population-estimates- subcounty.html

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U.S. Department of Commerce Economics and Statistics Administration U.S. Census Bureau. (2017, December 1). Monthly Construction Spending October 2017. Retrieved from U.S. Census Bureau: https://www.census.gov/construction/c30/pdf/release.pdf