Report: Construction starts down 7% in June; pandemic recovery to be uneven in months ahead | Senator: Agreement reached on key infrastructure issues | Experts: Fla. condo collapse spurs risk-modeling questions
July 28, 2021
CONNECT WITH NASBP
Targeted news for surety, construction, and allied professionals
June brought a 7% decline in total construction starts, with residential, nonresidential and nonbuilding all experiencing slowdowns, a report says. Residential and nonresidential starts are providing "mixed signals" indicating "that recovery from the pandemic will remain uneven in coming months as rising materials prices and labor shortages weigh on the industry," an economist says.
Sen. Rob Portman, R-Ohio, said lawmakers have arrived at an agreement on the key issues in a $1 trillion bipartisan infrastructure proposal. Senate Majority Leader Chuck Schumer, D-N.Y., said a procedural vote on advancing the proposal could take place today.
How catastrophe risk on Florida's coastline is modeled might need to be reevaluated in light of the tragic partial collapse of a condominium building in Surfside, although modelers and rating firms are waiting for more definitive information about the collapse before making any changes, experts say. Insurance demand for similar condo buildings is outpacing supply, and insurers could help mitigate structural risks by mandating that condo boards have access to the expertise of construction engineers, an insurance adviser suggests.
Surety companies closely examine contractors' ability to provide accurate financial statements, which are a key element in assessing capacity, two surety professionals write. Accurate and timely financials give sureties "comfort that any potential issues on a job can be detected early and corrected before it becomes a real problem," they write.
Construction's shift toward carbon neutrality is leading to five key trends that apply to contractors, developers, lenders and all other participants in construction projects, two attorneys write. Among these trends is the need to address rising extreme-weather risk and to provide extended performance warranties and guarantees, they write.
The US Small Business Administration recently notified lenders that the Paycheck Protection Program loan necessity questionnaires, which were released in November and were required as part of the review process for loans over $2 million, are no longer required to be submitted. This NASBP Blog post, from NASBP CPA Advisory Council firm CliftonLarsonAllen, discusses why the questionnaires were controversial and stresses that contractors should keep detailed documentation of the need for the loan and keep a copy of the questionnaire for guidance on preparing documentation to support their loan. Read more.
New NASBP podcast explains special-purpose acquisition companies
Did you miss any of the 5 top-ranked NASBP Virtual Seminars of 2021?
Watch them now! If you missed any of the top five NASBP Virtual Seminars of 2021, you still have a chance to watch them. These NASBP Virtual Seminars had a combined total of more than 2,000 registrants (300 to 400 registrants at each). NASBP Spotlight Series -- Conversations with Surety Industry Leaders -- Part 1 -- Ed Heine of NASBP Member PayneWest Insurance moderates this informative discussion with surety execs: Rick Ciullo of The Hartford; Larry Taylor of Merchants Bonding Company; and Steve Anderson of North American Surety Swiss Re Corporate Solutions/NAS Surety. PPP Loans -- Updates on Accounting, Tax and Forgiveness Issues -- NASBP CPA Advisory Council (CPAAC) Participant Julian Xavier of CliftonLarsonAllen, LLP, addresses what bond producers and their clients should discuss about the second-draw Paycheck Protection Program loans and modifications to original PPP loans resulting from the Consolidated Appropriations Act, 2021. Customs Bond Risk in Current Trade Environment -- Colleen Clarke of NASBP Member Roanoke Insurance Group, Michelle Lucaccioni of The Hartford, and John Sheppard of NASBP Member C.A. Shea & Company, Inc. explain obligations and underwriting of customs bonds and what happens when importers have defaulted on standard payment of duties, taxes and fees, causing liquidated damages claims for these payments to skyrocket. The Road Ahead: What Sureties Need to Know to Work with Contractors in 2021 -- NASBP CPAAC Participant Marty McCarthy explores which markets will expand and contract in 2021 and the challenges contractors face with their backlog, overhead, labor and material costs to maintain productivity and profitability. Topic 606: Revenue Recognition and the Impact to Contractors' Financial Statements -- This stellar team from the CPA firm Marcum LLP, also represented on the NASBP CPAAC, reviews how revenue recognition rules are being adopted by nonpublic entities and modifications that users of the financial statements should be seeing to ensure proper adoption is present. For more information, visit SuretyLearn.
Whether design professionals can make a payment bond claim can vary by state, and the process depends on how a particular state's laws are written, two attorneys write. States usually require claimants to have a direct contractual relationship with a contractor and to have provided services that are necessary to ensure the contractor's performance, the attorneys write.
It is not everyday that the world arranges itself into a poem.
Wallace Stevens, poet
Founded in 1942, NASBP is the association of and resource for surety bond producers and allied professionals. NASBP producers specialize in providing surety bonds for construction contracts and other purposes to companies and individuals needing the assurance offered by surety bonds.