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BUILDER north coast building industry association
Table of Contents ON THE COVER
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NEWSLETTER
North Coast Building Industry Association (NCBIA) BUILDER newsletter is the official newsletter of the NCBIA and is published monthly by the NCBIA. The NCBIA is an affiliate of the Ohio Home Builders Association (OHBA) & the National Association of Home Builders (NAHB).
NCBIA Office
5201 Waterford Dr., Sheffield Village, OH 44035 Ph: 440.934.1090 Fax: 440.934.1089 info@ncbia.com www.ncbia.com
Caruso’s Cabinets
Home & Remodeling Show:
6-7
Exhibitor Forms Sponsorship Forms
8-9
NCBIA Staff Executive Officer - Judie Docs judie@ncbia.com Administrative Assistant - Ashlyn Bellan ashlynncbia@gmail.com Marketing Associate - Maria Sabala maria.sabala.ncbia@gmail.com
2017 NCBIA Officers
President - Chris Majzun Jr., Majzun Construction Co. Vice-President - Jeff Hensley, Lake Star Building & Remodeling Associate VP - Liz Schneider, Dollar Bank Treasurer - Steve Fleming, Shamrock Development Secretary - Jeremy Vorndran, 84 Lumber Company Immed. Past President - Mary H. Felton, Fidelity National Title
2017 NCBIA Board of Directors
19
Spike Update
27
Market Expanding in 2018
10
Home Price Appreciation
11
Balance Sheet Normalization
12
Installation Banquet Flyer
13
Legislative Review
14
Max Conforming Loan Limits
16
Note from Liz Schneider
16
Spike Rolodex
17-19
Executive Officer’s Report
21
Economy Grows in Q3
22
CareWorksComp
23
2018 Events Calendar
26-27
Photo Gallery - OSHA Training
28
Photo Gallery - Oct. GM
29
Spike Report
30
2017 NAHB & OHBA Directors 2017 NAHB Directors Mary H. Felton, Fidelity National Title Jeff Hensley, Lake Star Building & Remodeling
NAHB Alternate Director
Tom Caruso, Caruso’s Cabinets
Sr. NAHB Life Director & Ohio’s State Rep. to NAHB Randy Strauss Dan Strauss
NCBIA Life Directors
Strauss Construction Strauss Construction
1975 1996
OHBA Past Presidents
Tom Caruso, Caruso’s Cabinets Mary H. Felton, Fidelity National Title Jeff Hensley, Lake Star Building & Remodeling Tom Lahetta, Tom Lahetta Builders, Inc. Chris Majzun Sr., Majzun Construction Co. Chris Majzun Jr., Majzun Construction Co. Randy Strauss, Strauss Construction Jeremy Vorndran, 84 Lumber Bob Yost, Dale Yost Construction
Dan Strauss 1975
Randy Strauss 1996
2017 OHBA Trustees Mary H. Felton Liz Schneider Keith Martin
Fidelity National Title Dollar Bank MBD Homes
OHBA Alternate Trustee
Advertising Policy - The North Coast Building Industry Association reserves the right to reject advertising in the Builder newsletter based on content. Acceptance of advertising does not imply endorsement of the product or service advertised.
Thanks for Renewing
10
These are our members who represent our local industry in Washington DC and Columbus.
Ashley Caruso-Noe, Caruso’s Cabinets Mark Craig, Mark F. Craig, Esq. Chris Husted, Prete Builders Sara Majzun-Garwood, BCT Alarm Services, Inc. Keith Martin, MBD Homes Timothy McLaughlin, CFP®, Wells Fargo Advisors, LLC Shannon Niebes, Integrated Restoration Michelle Nowlin, First Federal Savings of Lorain Tom Sear, Ryan Homes Tyler Yost, Dale Yost Construction
December 2017
4
Letter from the President
Gains Ahead
Tom Ostrander Tom Lahetta
84 Lumber Company Tom Lahetta Builders & Remodelers, Inc.
OHBA Area 2 Vice-President Mark Zolllinger
www.ncbia.com
Zollinger Builders
page 3
A Letter from the President by Chris Majzun, Jr., Majzun Construction Co.
It is hard to believe, but a whole year has gone by and my tenure as your president is about to end, but not my membership in the great association. As I look back on this year our industry continues to improve, and our association continues to grow. The Board of Directors, staff and committees seem to be constantly working on new events, promotions and meetings, all to hopefully provide for your needs as our membership. But what many of you don’t realized is the amount of time spent on keeping up with these items. Without these people, our organization would grind to a halt. So, thanks to all that have volunteered their time to make this a great association. The North Coast BIA is committed to each member of our association. You can be proud of the fact that, as a member, you have contributed to the effort that is yielding so many positive results at the national, state and local levels. This organization is great because of you and your fellow members! With the new year comes new leadership and the need for your continued support and guidance. We need you to help build our future. Through our association the voice of one can be heard as the voice of many. I am thankful to you for allowing me the privilege once again to serve as your president this year. My thanks to each of you who helped make 2017 a successful year for our association and I wish you continued success in 2018. I hope to share a farewell toast with you on January 27th at our 2018 Installation Night and welcome in our new president, Jeff Hensley and our new Board of Directors.
Top Reasons to Do Business with an Active NAHB Member ● They support NAHB at the local, state and national levels. ● They volunteer time, talent and treasure to help the North Coast BIA accomplish its goals. ● They recruit their colleagues and business contacts to become members.
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● They serve on committees gaining valuable networking opportunity while helping to advance the North Coast BIA’s mission. ● By doing so, you increase the value proposition for all membership in the North Coast BIA. ● They are a major source of non-dues revenue through sponsorships, advertising, etc. ● As industry partners, they are a valuable resource for business and management tips. ● They are heavily invested in your business success: You win, they win! ● Why wouldn’t you do business with a member?
page 4
www.ncbia.com
December 2017
Mark These Dates in Your Calendar
JAN 01 - NCBIA Office CLOSED - Happy New Year JAN 03 - Sales & Marketing Committee Meeting 8:30 JAN 04 - Home Show Committee Meeting 9:00 JAN 09-11 - International Builders Show - Orlando, FL JAN 17 - Executive Committee 3:30 / Board of Directors Meeting 5:00 JAN 27 - Installation of Directors & Officers 5:00-8:00 PM
Support your community.
FEB 16 - Home & Remodeling Show Setup 4:00-6:00 PM FEB 17 - Home & Remodeling Show 10:00 AM - 6:00 PM
Shop local businesses.
MAR 01 - OHBA Spring Board Meeting - Sheraton at Capitol Square, Columbus MAR 14 - Executive Committee 3:30 pm / Board of Directors Mtg 5:00 MAR 21 - General Membership Meeting (details to come) Check the website at www.ncbia.com for up-to-date changes, additions and corrections to these events!
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December 2017
NAHB Member Advantage Discounts NAHB Member Advantage gives members an easy way to reduce expenses, maximize profits and increase efficiency. Through agreements with leading national companies, NAHB offers exclusive discounts on a variety of products and services that can benefit your business, employees and family. In the past year, members have saved over $17M through Member Advantage. For the most up-to-date information about which companies are offering discounts as well as detailed information on how to access the savings, please visit www.nahb.org/ma.
www.ncbia.com
page 5
Rising Starts and Sales Indicate More Gains Ahead
Builders Confident as Market Primed to Expand in 2018
BY ROBERT DIETZ
BY ROBERT DIETZ, NAHB CHIEF ECONOMIST
October was a good month for housing. Single-family and multifamily housing starts rose by almost 14%. Single-family starts (877,000) are at a post-recession high and have grown 8% on a year-to-date basis compared to last year. And rising home sales indicate more gains are in store for residential construction. Existing home sales expanded 2% in October, while inventory fell for the 29th consecutive month to only a 4.4 months’ supply. Newly built single-family homes sales rose 6% last month, recording its strongest reading in a decade.
Builder confidence in the market for newly-built single-family homes increased five points to a level of 74 in December on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) after a downwardly revised November reading. This was the highest report since July 1999, over 18 years ago. Builder confidence has improved in 2017 on hopes of an improved regulatory environment for firms in the residential construction sector. Moreover, the HMI measure of home buyer traffic rose eight points, showing that demand for housing is on the rise. With low unemploy-
At this sales pace, there is only a 4.9 months’ supply of new homes available. Moreover, a rising share of new home sales is coming from homes that have not yet begun construction, pointing to additional gains for construction in the near term.
ment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family sector next year.
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. All three HMI components registered gains in December. The component measuring buyer traffic jumped eight points to 58, the index gauging current sales conditions rose four points to 81 and the index charting sales expectations in the next six months increased three points to 79. Looking at the three-month moving averages for regional HMI scores, the Midwest climbed six points to 69, the South rose three points to 72, the West increased two points to 79 and Northeast inched up a single point to 54. page 10
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December 2017
Home Price Appreciation Continues in September BY JING FU National home price appreciation continued in September, while local home prices grew at different rates. All of the 20 metro areas had positive annual growth rates.
Among the 20 metro areas, Atlanta, San Francisco and Tampa had the highest home price appreciation. Atlanta led the way with 16.4%, followed by San Francisco with 14.6% and Tampa with a 12.7% increase. Half of the 20 metro areas exceeded the national average of 9.0%. The ten metro areas that had lower home price appreciation than the national level were: Los Angeles (8.1%), Denver (7.9%), Charlotte (7.4%), Seattle (6.8%), Miami (6.6%), Chicago (6.4%), Portland (6.2%), Detroit (3.9%), Washington, DC (3.7%) and Minneapolis (2.2%).
The Case-Shiller U.S. National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 9.0% in September, faster than an 8.2% increase in August. It was the highest seasonally adjusted annual growth rate since October 2013. Tight inventory of existing homes is contributing to strong house price appreciation. Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 4.2% in September, following the 9.7% increase in August.
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Figure 2 shows the annual growth rate of home prices for 20 major U.S. metropolitan areas. In September, local home price varied greatly, and its annual growth rates ranged from 2.2% to 16.4%. However, all 20 metro areas tracked recorded year-over-year appreciation.
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December 2017
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page 11
Fed Raises Key Rate, Balance Sheet Normalization to Accelerate in January
inflation”.
BY MICHAEL NEAL, NAHB In its statement following its December 12-13, 2017 meeting, the Federal Open Markets Committee (FOMC) decided to raise the target range for the federal funds rate to a range of 1.25 to 1.5 percent, a decision that was widely expected. Despite the increase, the FOMC believes that the “stance of monetary policy remains accommodative”. As illustrated by the Federal Reserve Bank of Atlanta, the actual federal funds rate remains below the rate implied by the Taylor Rule. The FOMC seeks to foster maximum employment and price stability, which is generally accepted as 2 percent inflation. In its statement, the FOMC noted that despite “hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further. However, “on a 12-month basis, both overall inflation and inflation for items other than food and energy have declined this year and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.” While the majority of FOMC members voted for the rate hike, including Chair Yellen and Vice Chairman Dudley, two members, Charles Evans of the Federal Reserve Bank of Chicago and Neel Kashkari of the Federal Reserve Bank of Minnesota voted against this action “preferring to maintain the existing target range of the federal funds rate”, possibly in response to still low inflation. Despite the minority of detractors, the FOMC believes that its decision to raise the federal funds rate will support strong labor market conditions and a sustained return to 2 percent
page 12
In addition to traditional monetary policy, the FOMC has also been normalizing its balance sheet since October. According to an implementation note issued on December 13, 2017, the FOMC will increase the level at which principal payments from its holdings will be reinvestment, from $10 billion, $6 billion of Treasury securities and $4 billion of agency debt and agency mortgage-backed securities, to $20 billion, $12 billion of Treasury securities and $8 billion of agency debt and agency mortgage-backed securities. The increase will take place in January 2019. NAHB analysis demonstrated that the real return on 10-Year Treasury securities rose in October, the month that the Fed began normalizing its balance sheet. The FOMC also released an advance copy of its Summary of Economic Projections. These projections indicate that that the median FOMC member has become more optimistic about near-term economic growth and the unemployment rate since September. At the median, inflation is expected to return to its 2 percent level, unchanged from September. Despite the improved expectation about the short-run performance of the economy, the median longer-run expectation did not change. More precisely, the median longer-run projection for real GDP growth remains at its potential rate. However, the ranges and central tendency for these economic indicators shifted somewhat. According to the projections, the median projection of the federal funds rate implies three rate hikes in 2018. By 2020, the median expectation for the federal funds rate is now about 30 basis points above its longer-run level, exceeding the approximately 10 basis point median gap expected in September.
www.ncbia.com
December 2017
2017 OHBA Year in Review OHBA SERVED AS MAIN RESOURCE FOR PROPERTY RESIDENTIAL CONSTRUCTION ADVISORY TAX RELIEF BILL TO HELP ENCOURAGE RESIDENTIAL COMMITTEE (RCAC) OPERATING AS INTENDED DEVELOPMENT Prior to introduction OHBA held in depth discussions on the importance of residential development and reducing any regulatory burden to encourage more development throughout the state. Further, as the House committee held hearings on the bill, OHBA testified and worked closely with the sponsor, chairman, and committee members to explain the practical impacts of the bill: to encourage residential lot development in Ohio, help ease the burden of lot shortages and grant a sense of equity for property owners from unfair property valuations.
After years of effort to establish and educate stakeholders on the role of the RCAC, OHBA continues to make the operation of the RCAC a priority. Throughout the year, OHBA attended meetings, monitored the code review process, encouraged use of code interpretations, and brought builders in to provide their practical insight on the impacts of more stringent codes.
BENCHCARD ISSUED ON COGNOVITS HELPS LIMIT USE OF COGNOVIT TO MONETARY DEFAULT
OHBA COMMITTEE REVIEWED AND ADOPTED After OHBA involvement in interested party meetings, committee SECOND EDITION OF MINIMUM QUANTIFIABLE hearings, and several OHBA members testified on a bill to limit the use WORKMANLIKE STANDARDS of cognovit notes, the Ohio Judicial Conference (OJC) posted a new The workmanlike standards committee reviewed and voted unanimously to adopt the 2017 2nd edition of the minimum quantifiable workmanlike standards. These standards are promulgated by the Ohio Home Builders Association, as a result of HB 383, the Home Construction Services Act.
benchcard dealing with cognovit judgments. The benchcard includes a checklist of six items which must be answered in the affirmative before a judge determines the cognovit note is valid and can be enforced against the debtor. The presence of monetary default was one of the six items listed.
OHBA DEFENDED USE OF SUB-CONTRACTORS PARTNERED WITH LOCAL UTILITIES NEW HOME DURING LICENSING DEBATES CONSTRUCTION ENERGY PROGRAMS Discussions continued all year on the licensure of roofers, plumbers and other specialty trades. During efforts to extend the specialty licensing law to include those doing work on residential, OHBA defended the industry and the importance of allowing the current practice of subcontracting. OHBA has objected to recent actions by the state licensing board requiring all licensed contractors to use employees on the job. Further, OHBA continued to work on correcting the current prohibition.
OHBA ENGAGED IN NUMEROUS PIECES LICENSING LEGISLATION UNDER DISCUSSION
Utilities offering incentives to builders and remodelers asked OHBA to be an important partner in developing its energy efficiency program, and provide ongoing feedback as it moves ahead with further demand side management discussions. OHBA brought valuable insight on code adoption among other things.
WORKFORCE DEVELOPMENT DISCUSSION
OF Workforce development was a consistent topic of discussion throughout
OHBA, as well as, around the statehouse. OHBA’s workforce development committee and speakers at the Fall board meeting provided Ranging from home inspectors to commercial roofing, there were quite a valuable insight into the challenges currently facing the industry. OHBA few bills under review dealing with the topic of licensing. OHBA closely closely monitored workforce development legislation in both the House watched and engaged in discussions on each and every one. OHBA and Senate. was able to offer amendments to be included in several of the proposed pieces of legislation. Licenses for home improvement contractors, REVIEWED POTENTIAL CHANGES TO WORKERS commercial roofers, home inspectors, residential elevator contractors, COMPENSATION SYSTEM and residential specialty contractors were brought up by the legislature in 2017. OHBA served as a vocal member of a coalition reviewing potential changes to the workers compensation system. As the BWC proposed page 14
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December 2017
changes to group rating and group retro programs, OHBA continued to defend the value of such programs, and questioned the impact of any and all potential changes to these programs.
IMPORTANCE OF ALL TYPES OF RESIDENTIAL HOUSING DEFENDED TO LEGISLATURE OHBA defended the industry and the economic development it provides. In pushing for some relief in property tax assessments on undeveloped residential lots, OHBA firmly expressed the need for equity when considering such types of relief and provided members of the legislature with facts and data on the potential impact of new development, as well as, the current state of the housing industry in Ohio.
OHBA MEMBERS CONTINUE TO PROVIDE VALUABLE EXPERTISE FOR COMMERCIAL AND RESIDENTIAL CODE AUTHORITIES
MONITORED NUMEROUS OEPA RULE PACKAGES OUT FOR REVIEW Throughout the year, several changes had been put out for review by the OEPA and Army Corp of Engineers. OHBA submitted comments, met with staff, as well as, participated in group stakeholder meetings to offer input on changes to NPDES Storm Water rules, 401/404 Permit mitigation changes, and certified water quality professional rules.
MONITORED LEGISLATION Throughout the year, OHBA tracked and monitored numerous other items receiving attention by the legislature. Some of these included HB 69 TIF, HB 128 Building Inspectors, HB 121 Piping Materials, SB 43 Building Codes, and SB 3 Workforce Development.
OHBA members served active and valuable roles on both the Residential Construction Advisory Committee (RCAC), as well as, the Board of Building Standards (BBS) helping to maintain reasonable codes and ensuring proper review.
December 2017
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page 15
Fannie Mae, Freddie Mac Maximum Conforming Loan Limits to Rise in 2018
limit in high-cost markets will be $679,650, or 150% of the $453,100 for single-family properties. The previous ceiling was $636,150. Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $679,650 for single-family properties, but actual loan limits may be higher in some specific locations. A list of the 2018 maximum conforming loan limits for all counties and countyequivalent areas in the country may be found here. Questions concerning the maximum conforming loan limits can be addressed to LoanLimitQuestions@fhfa.gov. For additional information, contact Curtis Milton at 800-368-5242 x8597.
The Federal Housing Finance Agency (FHFA) today announced that the maximum baseline conforming loan limit for mortgage loans acquired by Fannie Mae and Freddie Mac in 2018 will increase to $453,100 from $424,100.
Note from Liz Schneider, Associate Vice President New higher FHA maximum loan limits were announced for all case
The loan limit will rise 6.8% in 2018 because FHFA has determined
numbers ordered after January 1, 2018. Maximum FHA loan lim-
that the average U.S. home value increased 6.8% between the third
its for single family properties in most of Northeast Ohio (Ashland,
quarters of 2016 and 2017.
Cuyahoga, Lake, Lorain, Erie, Ottawa, Medina, Sandusky, Summit, Stark, Geauga, Huron, Holmes, Mahoning, Portage, Richland, Trum-
Higher loan limits will be in effect in higher-cost areas as well. In areas
bull, Tuscarawas, & Wayne counties) will be $294,515- which equates
where 115% of the local median home value exceeds the baseline loan
to approximately a $300,000 sale price with the minimum 3.5% down
limit, the maximum area loan limit will be higher. The new ceiling loan
payment.
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December 2017
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December 2017
Thank You for Renewing Your Membership
Executive Officer’s Report by Judie Docs, CSP, MCSP, MIRM, CMP, CGP
Another year has flown by at the North Coast BIA Steve Whitman, Advanced Comfort Systems, Inc. – another year of networking, education and great John Blakeslee, Blakeslee Excavating, Inc. events. Thank you to the many dedicated and active members who give of their time and energy to make this a great association. And maybe a group that doesn’t get thanked enough - the board of directors, the driving force behind the association. Many thanks to Chris Majzun Jr. for stepping up once again to lead the North Coast BIA, and the confidence and support that he has given to me this past year. And to Kelli Moss, for all her efforts of not only this year, but the 17 years she has been with the North Coast BIA, I wish her the best in her new adventure. I can truly say I love coming to work for you, our members. I really want to thank you for all your support as I start my fifth year with the association. Looking forward to working together in 2018!
Lisa Marti, Cambria Tom Caruso, Caruso’s Cabinets Kelly Christie, Cleveland Custom Homes Terry Gilles, Elyria Pressure Seal, Inc. Jim Tweardy, Jim’s Electric, Inc. Doug Gerber, Landscaping by Gerbers LLC Keith Martin, MBD Homes Sean Smith, MPW Construction Services Bob Perritt, R.J. Perritt Homes Gary Post, Re/Max Crossroads Kelly Post, Re/Max Crossroads James Sturgill, Sturgill Drywall Tim Hutman, Tim Hutman Home Renovations LLC Tom Pfeifer, Tom Pfeifer Excavating Mike Gardner, Wes Gardner, Inc. Joanne Fitzpatrick, Western and Southern Financial Group Paul Zdroik, Zdroik Building, Inc.
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page 21
Economy Grows in Q3, Exceeds Potential BY MICHAEL NEAL The Bureau of Economic Analysis (BEA) reported that the economy, as measured by growth in real gross domestic product (GDP), rose by 3.2 percent in the third quarter of 2017. The third estimate of third quarter 2017 GDP growth is slightly less than the 3.3 percent growth rate recorded in the second estimate, but faster than the “advance”, or initial, estimate of 3.0 percent. With this reading, GDP growth has accelerated for two consecutive quarters after decelerating over the second half of 2016. The third quarter of 2017 reading marks the fastest rate of growth since the first quarter of 2015. However, this strong rate of growth is likely not sustainable over a longer period of time.
The figure below shows the contribution to the third quarter of 2017 GDP growth estimate by each major category. Personal consumption expenditures (PCE) accounted for the largest contribution to each estimate of GDP growth. This reflects that PCE represents 70 percent of GDP. As BEA notes in its release, “With this third estimate for the third quarter, personal consumption expenditures increased less than previously estimated, but the general picture of economic growth remains the same.”
Potential GDP is estimated by the Congressional Budget Office and represents the “CBO’s estimate of the maximum sustainable output of the economy”. If the levels of potential output represent the “maximum sustainable output of the economy”, then the growth rates implied by these levels are the maximum sustainable growth rates for the economy . The table above highlights this and other important phenomenon. First, over a longer period of time, the growth of the economy, which averaged 3.5 percent on an annualized basis between 1950 and 2007, just prior to the Great Recession, matched the growth rate of potential GDP over the same period. A large part of the reason why growth over the 57 years ending just prior to the Great Recession exceeds the average annualized growth rates of actual GDP in the years following the recession, 2010-2017, is because the economy’s potential growth rate was higher . At the same time, the damage to the economy caused by the Great Recession significantly and adversely affected both actual GDP growth, the economy nose-dived into a recession, and the growth of the economy’s potential. The average annualized potential growth rate between 2000 and 2007 was 2.8 percent, still lower than growth rates over previous decades, but declined 1.2 percentage points over the Great Recession to 1.6 percent on average over 2008 and 2009. The growth rate of potential GDP has slowed further in the years since the recession, however, the growth rate of actual GDP since the recession ended has exceeded its rate of potential, 2.1 percent versus 1.4 percent. The faster growth of actual GDP, which partly reflects “accommodative” monetary policy, has allowed actual GDP to return to, and now exceed its potential level. At the same time, and very importantly, the average annualized growth rate of 2.1 percent in the years following the recession was enough to push the actual level of GDP to and above its potential, in part because the growth of the economy’s potential level has decelerated since the 1960s.
A previous post illustrated that the level of actual economic activity has returned to its potential level. The GDP growth rate in the third quarter of 2017 marks the first time since the fourth quarter of 2007, the quarter that the Great Recession officially began, that actual GDP exceeds its potential level. Earlier commentary noted that the Fed typically raises its key interest rate when the “output gap” is converging, actual GDP is returning to its potential level, or when actual GDP exceeds its potential level. The response by the Fed to the output gap is captured by the role that the output gap plays in a basic Taylor Rule. (Continued on page 25) page 22
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December 2017
“The Holiday Season is a perfect time to reflect on our blessings and seek out ways to make life better for those around us.” ~ Terri Marshall Unbelievably, another year is hastening to a close. Growing and developing relationships with our clients has been our first and foremost goal this year. We will nurture that culture of partnership in the year ahead and explore ways to make everyday operations easier and more costeffective for you in your risk management programs. We’re wholeheartedly embracing 2018 and the exciting promise of all that it holds for us! Important Dates: ● December 31, 2017
○ Deadline to submit offer and acceptance forms (TWB-2) for July 2016 Transitional Work Bonus Program participants.
● January 24, 2018
○ Deadline to enroll in Group Retrospective Rating programs!
● January 31, 2018
○ Individual retro rating application deadline for 7/1 start
○ One Claim Program (OCP) program application deadline for 7/1 start date.
○ Deadline for the BWC’s Deductible program for 7/1 start date.
Paying BWC Premiums: Now that we are two years in to the BWC’s prospective payment plan, it is more important than ever to ensure you are paying the premium installments on time, as the BWC will remove employers from programs for not paying premiums or filing true-ups timely. Since there are several payment plan options and BWC statements can be quite confusing, it is easy to miss a payment or misunderstand when one is due. CareWorksComp is here to help if you need it. Mergers and Acquisitions: If the new year is bringing you the possibility of buying or selling part of your operation, please contact CareWorksComp if you need guidance on how this relates to your workers’ comp policy. It’s important to know how this may affect your business and the impact to the alternative rating program in which you participate. Additionally, BWC may be issuing rebates or refunds depending on your participation in these programs, and you will want to ascertain who receives these monies. Unemployment Taxable Wage Base Increases for 2018: Ohio employers will be paying more unemployment taxes in 2018 primarily due to the increase in the taxable wage base. The Ohio Department of Job and Family Services (ODJFS) has raised the taxable wage base from $9,000 per employee to $9,500 per employee. Also the tax table used by ODJFS has shifted upward for 2018. This will also have an impact on the amount of unemployment taxes Ohio employers will pay. CareWorksComp can assist you in controlling unemployment claims and taxes. Employers wanting an analysis of their tax notice or to learn about different tax options such as common/joint rating should contact Kammy Staton, our Unemployment Manager at 614.526.7165 or kammy.staton@careworkscomp.com.
December 2017
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December 2017
dicates that the average growth rate of potential GDP by decade has
ECONOMY GROWS IN Q3
been slowing since the 1960s. Most notably, there has been a marked deceleration in the growth rate of potential GDP between the third
(Continued from page 22)
quarter of 1998 when it reached 4.1 percent, and the fourth quarter of 2010 when it was 0.9 percent.
Hypothetically, if the actual level of GDP matched its potential level through time, then the growth rate of actual GDP would match the growth of the economy’s potential. While this exactness emerges over
The CBO does expect the growth rate of potential GDP to acceler-
longer periods of estimation, quarter to quarter, actual GDP growth typ-
ate in the coming years. However, it is expected to remain below 2.0
ically deviates from its potential growth rate as indicated in the figure
percent, averaging 1.7 percent in 2018 and 1.8 percent in 2019, the
above. This chart does confirm that growth in actual GDP that exceeds
longer-run projection of the median FOMC member in the Decem-
the potential rate of growth is not sustainable, partly because short-
ber Summary of Economic Projections. The expected growth rates
term interest rates typically rise under these conditions in response
of potential GDP are less than both the current growth rate in actual
to Fed rate hikes. Second, periods of recessions, marked by the gray
GDP and the 1950-2007 average rate of 3.5 percent. Nevertheless,
shaded regions, coincide with both declines in GDP and deviations in
potential GDP is a theoretical construct and is subject to some skepti-
actual GDP to rates below its potential growth rate.
cism. At the same time, recently enacted federal policy could raise the actual GDP growth because it increases the rate of growth in potential
While the growth rate of potential GDP is not as volatile as the growth
GDP.
rate of actual GDP, it does exhibit some variability. The above table in-
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Photo Gallery -- 10-Hour OSHA Training
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December 2017
Photo Gallery -- October General Meeting/ Election Night
Steve Fleming, Shamrock Development; Jeff Hensley, Lake Star Builders & Remodelers & Chris Majzun Jr., Majzun Construction
New Member Orientation
Newly Elected Board Members John Toth, Floor Coverings International; Mark Craig, Mark F. Ben Cislo, Howard Hanna; Mary Felton, Fidelity National Title; Kathleen Cisco, Howard Hanna & Mark Patterson, Comm Star
Craig, Esq.; Liz Schneider, Dollar Bank; Linda LaFleur, Howard Hanna; Ashley Caruso-Noe, Caruso’s Cabinets & Tim King, K.
Credit Union
Chris Husted, Prete Builders & Tim Conrad, Graves Lumber
December 2017
Hovnanian Homes
Mike Longo, Lorain County Workforce Development Director
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THANK YOU SPIKES!
STATESMAN SPIKE (500-999 SPIKE CREDITS) Bob Yost.......................Dale Yost Construction............................ 605.25 SUPER SPIKE (250-499 SPIKE CREDITS) Mary H. Felton...........Fidelity National Title............................. 368.00 Terry Bennett...............Bennett Builders....................................... 297.75 ROYAL SPIKE (150-249 SPIKE CREDITS) Jack Kousma...............Kousma Insulation................................... 233.50 Chris Majzun Jr. .........Majzun Construction............................... 229.00 Bill Perritt....................Perritt Building Co................................... 220.50 Bucky Kopf..................Kopf Construction Corp......................... 190.00 Randy K. Strauss........Strauss Construction............................... 175.00 Bill Comerford............Hovey Kaiser Insurance Associates...... 173.50 Jeff Hensley.................Lake Star Building & Remodeling......... 162.25 RED SPIKE (100-149 SPIKE CREDITS) Tom Lahetta................Tom Lahetta Builders.............................. 137.00 Chris Majzun Sr..........Majzun Construction............................... 101.00 GREEN SPIKE (50-99 SPIKE CREDITS) Patrick Shenigo...........ShenCon Construction, LLC.................. 96.50 Thomas Caruso...........Caruso’s Cabinets.................................... 91.75 Tom Sear......................Ryan Homes............................................. 91.25 Mike Lapos..................Lapos Construction................................. 75.50 Chris Mead..................Maloney & Novotny, LLC...................... 64.00
Sara Majzun- Garwood.... BCT Alarm Services................................. 64.50 Aaron Kalizewski.......Grande Maison Construction................. 57.50 Ray Allen Thom..........Thom Concrete ........................................ 50.50 LIFE SPIKE (25-49 SPIKE CREDITS) Jason Scott...................North Star Builders.................................. 39.00 Steve Schafer...............Schafer Development.............................. 30.50 Jeremy Vorndran........84 Lumber................................................. 30.50 John Daly.....................Old Republic Title.................................... 25.50 BLUE SPIKE (6-24 SPIKE CREDITS) Liz Schneider..............Dollar Bank............................................... 18.50 Jason Higgins..............Sunnyside Chevrolet............................... 14.00 Ken Cassell..................Cassell Construction................................ 13.50 Michelle Nowlin.........First Federal Savings of Lorain.............. 13.00 Chris Collins...............Carter Lumber Company....................... 12.50 Tom Ostrander............84 Lumber Co........................................... 11.50 Tami Lanphere............Town Money Saver.................................. 10.50 Jeff Lugar.....................ABC Supply Co........................................ 10.00 Keith Martin................MBD Homes............................................. 9.00 John Wargo..................Mason Structural Steel............................ 6.50
Our SPIKES are Our FOUNDATION
AUTO
INSURANCE MADE EASY. NATIONAL ASSOCIATION OF HOME BUILDERS members could save even more on car insurance with a special discount from GEICO. Contact us today for your free quote!
geico.com/disc/nahb 1-800-368-2734 Some discounts, coverages, payment plans and features are not available in all states or all GEICO companies. GEICO contracts with various membership entities and other organizations, but these entities do not underwrite the offered insurance products. Discount amount varies in some states. One group discount applicable per policy. Coverage is individual. In New York a premium reduction may be available. GEICO may not be involved in a formal relationship with each organization; however, you still may qualify for a special discount based on your membership, employment or affiliation with those organizations. GEICO is a registered service mark of Government Employees Insurance Company, Washington, D.C. 20076; a Berkshire Hathaway Inc. subsidiary. GEICO Gecko image © 1999-2016. © 2016 GEICO
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December 2017
We’re in the offering NAHB members up to $1,000 business.
2017 Chevrolet Low Cab Forward 3500HD
2017 Chevrolet Silverado 2500HD
2017 GMC Sierra 1500
2017 Chevrolet Express 2500 Cargo Van
NAHB MEMBERS BENEFIT FROM THESE SPECIAL OFFERS. Members of the National Association of Home Builders (NAHB) can now enjoy a private offer1 of up to $1,000 toward the purchase or lease of most new Chevrolet, Buick and GMC vehicles. Choose an eligible vehicle at your local dealer and present your NAHB proof of membership. You can add on incentives from the National Fleet Purchase Program2 and Business Choice3 to get the best value on vehicles that run your business. For private offer details, visit nahb.org/gm.
Example offer for NAHB members who are business owners purchasing a 2017 Chevrolet Express 2500 Cargo Van. Up to
$1,000 Private Offer1
Up to
+
$4,000
National Fleet Purchase Program (FVX)2
Up to
+
$1,200
Eligible Accessory Cash Allowance3,4
Up to
=
$6,200 In Potential Value
1 Private offer amount varies by model. Up to $500 offer for retail deliveries and up to $1,000 offer for fleet deliveries. Valid toward the purchase or lease of eligible new 2016 and 2017 model year vehicles. Customer must take delivery by 1/2/18. Not compatible with other private offers. Not valid on prior purchases. Compatible with many current incentives. Incentives are subject to change without notice. Offer excludes Chevrolet Bolt, Camaro, Chevy SS, Corvette, Sonic, Spark, Trax, Volt, Buick Cascada, Lacrosse, Regal, Verano and all Cadillac vehicles. Additional GM models may be excluded from time to time at GM’s sole discretion. See dealer for details. 2Offer available to qualified fleet customers. Not compatible with some other offers. Take delivery by 12/31/17. See dealer for details. 3To qualify, vehicle must be used in the day-to-day operations of your business and not solely for personal/non-business-related transportation purposes. Must provide proof of business. For complete program requirements, including information regarding offers, vehicles, equipment, options, warranties, and ordering, consult your dealer or visit gmbusinesschoice.com. Take delivery by 1/2/18. 4 Not eligible on associated accessories from third-party independent suppliers. Not available with some other offers. Take delivery by 1/2/18. See dealer for details. ©2017 General Motors, LLC. All rights reserved. The marks appearing in this ad are the trademarks or service marks of GM, its subsidiaries, affiliates, or licensors.