< Previousperiod of slowing growth. Instead, you are in the part of the business cycle that is characterized by accelerating growth. Enjoy! U.S. Private Commercial Construction for the most recent 12 months totaled $85.7 bil- lion, coming in more than $5 billion higher than where the market was at the start of 2020. We project commercial construction to exceed $90 billion by the end of 2022, putting the market at a new record high that will surpass the previous re- cord high set before the Great Recession. When we talk about construction, two concerns frequently arise: z Infrastructure bills and their impact on the construction market z Inflation’s impact on the construction market. INFRASTRUCTURE BILLS IMPACT ON THE CONSTRUCTION MARKET At ITR Economics, we are frequently asked if we plan to change our forecast for US GDP and, more specifically, our construction forecasts due to the Infrastructure Investment and Jobs Act. The general answer is no. While $1.2 trillion is a lot of money, it is not going into the economy all at once. It will be spread out over five years and take time to make its way into the economy, unlike the quick shot to the arm provided by the 2020-21 stimulus spending. Additionally, it is important to remember that of that $1.2 trillion, Congress was already planning to authorize $650 billion as part of regular operations. Select construction markets will receive a boost from this act. The spending package targets in- frastructure segments such as transit, highways, rail, power infrastructure, water, and high-speed internet. While the package will not provide funding to all aspects of construction, it will T he U.S. economy is up 4.9% from the prior year, according to the latest U.S. Real Gross Domestic Product (GDP) data. However, the rate of rise is down from the prior quarter, indicating that GDP has entered a period of slowing growth. Expect general slowing growth for the U.S. economy into the first half of 2023. The “why” for slowing growth in 2022 is com- plex. Leading indicators point decidedly down- ward, signaling a business cycle decline this year. However, the economy is going into the back- side of the business cycle with elevated corpo- rate profits, low interest rates, record-high retail sales, and strong consumers who, having paid down debts during the last two years, are in an excellent financial position. Don’t ignore consumer strength. It will be an es- sential contributing factor to keeping the economy out of recession as we near the low of this business cycle in 2023. Compared to 2021, this year and ul- timately 2023 will be different in that consumers will unlikely receive large influxes of cash from the government. Instead, they may tap into savings or take on debt to help fuel consumption. U.S. Personal Savings as a Percentage of Disposable Personal Income dropped to 6.9% in November 2021, lower than the average of 7.7% for the two years preceding the pandemic. The newly passed infrastructure spending package is not likely to hit the economy in earnest in 2022. However, this is not cause for alarm – just be prepared for the overall economic growth rate to slow in 2022 and 2023 as things normalize. COMMERCIAL CONSTRUCTION If you are involved in the commercial construc- tion market, you are likely not yet feeling this Commercial Construction: 2022 Infrastructure, Inflation, & Insights By Jackie Greene MANAGEMENT 20 FEBRUARY 2022HIGH-PERFORMANCE HVAC TODAYmaterials in the three months through November were up 31.3% from the same period one year prior. Construction material prices have risen faster than overall producer pric- es for multiple reasons, but they all boil down to economic fundamen- tals – supply and demand. Simply put, during the past year, demand for ma- terials increased faster than our supply chain could supply those materials. MORE SUPPLY CHAIN ISSUES Before COVID-19, tariffs were start- ing to squeeze the domestic supply of some materials such as steel. The 2020 wildfires combined with regula- tory changes for lumber mills began to constrict the supply of lumber. More recently, the supply chain con- straints made highly visible by back- logged cargo ships off the coast of Cali- fornia reduced the availability of other materials. All of this was happening while demand was increasing. While demand from certain seg- ments of commercial construction, such as office buildings, declined during the past two years, demand for warehouses has increased amid the ef- fort to accommodate the e-commerce segment of our economy. However, the biggest draw on construction materials came from the market’s residential side. Between U.S. Single-Unit Housing Starts reach- ing a nearly 14-year high and home re- modeling projects skyrocketing due to a quarantined consumer, materials were subject to a demand squeeze. The housing market is beginning to cool, and it is already suggesting that prices for construction materials will ease in 2022. This may mean that the top line for construction projects will look less robust. However, the shift will likely spur on some projects that were on hold, wait- ing for prices to settle back down, or materials to be more readily available. When planning for the upcoming year, be prepared for growth across many nonresidential construction seg- ments and ensure you are using the appro priate inflation metrics to deter- mine real growth versus inflation. offer some longer-term benefits to the economy. Enhancing the above segments of our infrastructure will allow other parts of the U.S. economy to grow by reducing the cost of doing business via more efficient infrastructure. Since nothing occurs in a vacuum, we must also be aware that the draw on resources required to complete these projects will increase the inflation risks already building in the economy. INFLATION’S IMPACT ON THE CONSTRUCTION MARKET Current headlines are running ram- pant with talk of inflation, frequent- ly quoting the Consumer Price Index (CPI) or Producer Price Index (PPI). The rapidly rising inflation is some- thing we cannot ignore, particularly after experiencing relatively low infla- tion during the prior two decades. Because of what we have grown ac- customed to, today’s inflation seems so foreign and concerning for many. The good news is that inflation will ease in 2022. However, it’s vital to be clear: while the rate of rise in prices will ease, we’re not expecting deflation. Prices will be going up in 2022, but the rate of rise will lessen as we progress through the second half of the year. When thinking about inflation, carefully select the measure of infla- tion most applicable to you. The U.S. Producer Price Index measured inflation at 12.6% for the three months through November. This number is frequently reported on, making it an easy benchmark for you to use for pricing. However, let’s look at a measure of inflation that is more specific to the construction industry. We see that prices for construction Jackie Greene is Vice President of Economics and has served ITR Economics’ (itreconom- ics.com) clients since 2005. She has contrib- uted to the company’s forecasts, publications, and thought leadership. Jackie works with many clients in a one-on- one capacity and delivered keynote addresses on multiple continents. HVACTODAY.COMFEBRUARY 2022 21NCI UPDATE Heating and Air Condi- tioning in Modesto, CA. He is a member of ACCA, RSES, and IHACI, and cur- rently holds six different NATE certifications as well as certifications in duct design, load calculations, Title 24, Wrightsoft, zoning, and home automa- tion. He joins the NCI training team in California with more than 38 years of on- the-job experience and has serviced and installed thousands of HVAC systems. Once again congratulations to these three additional members of the NCI training team! Why the NSI 6000 is NOT Sold Direct National Comfort Institute (NCI) staff are often asked why we don’t sell the Na- tional Safety Instruments (NSI) 6000 Car- bon Monoxide (CO) monitor directly to the public? The truth is that we could sell more monitors if we market- ed and sold them di- rectly to consumers. There are, however, some significant rea- sons why — for nearly 20 years — we choose to only sell through trained professionals. To understand why, it’s essential to know the difference between a low-level CO monitor and a CO detector that you can purchase at any retail outlet. In his recent blog post, NCI’s Director of Sales and Operations Nick Guarino explains those differences and provides the reasoning why trained professionals are the only way to make sure that con- sumers are not only safe in their homes, but that they are educated about what to do in the case the NSI 6000 alarms. You can read his entire post here: ncilink.com/Nick6000 . He warns that most fire departments and public utilities are NOT trained in what to do and often ignore calls from customers whose monitors are alarming as nuisance calls. If you are interested in learning more about this low-level CO monitor, check out Nick’s video here: ncilink.com/ NSI6000Vid1 . February PowerPack In this February 2022 edition we focus on some documents and brochures your team can use to capture data and communicate with customers about what is happening with their HVAC system that impacts their comfort. We think you’ll find these tools and training materials very helpful as you continue to grow your High-Perfor- mance HVAC business. Be sure to share them with your team during the month of February: z Static Pressure Test Diagram (Download) z Cooling Test-in Report (Download) z Fundamentals of Fan AIrflow (Online Training) z Value and Comfort Pre-Season Per- formance Air Conditioning Tune-up Flyer (Download). Just go to ncilink.com/PwrPak to access it today. If you have any ques- tions or are unable to access any of the tools in this program, please contact us at 800-633-7058. Welcome to Our New NCI Trainers National Comfort Institute (NCI) is pleased to announce the addition of three new trainers to our High-Perfor- mance HVAC family. Please join us in wel- coming all three. They bring professional experience and industry knowledge to the game and will enhance the training offers we have for you, our members: Jim Ball recently sold his HVAC company, Ball Heating and Air and wants to give back to the industry. He hopes to help those involved with NCI to move forward with the implementation of high-performance processes into their businesses. Jim has been recognized as an NCI Contractor of the Year, he received the Chairman’s Award, and The John Garofalo Implemen- tation Excellence Award at Summit in the past. Welcome aboard, Jim! Jayme Carden began working in the con- struction industry in the 1980s in all areas from residential remodels to large-scale development projects. He became in- volved with HVAC testing and diagnos- tics in the early 1990s, eventually part- nering with NCI’s Scott Johnson to form Maximum Performance Housing, Inc., an HERS rating outfit in California. In addition he worked with IHACI (In- stitute of Heating and Air Conditioning Industries) as a trainer and curriculum developer. Jayme joins NCI as a trainer and will be working with the California team as an in-class High-Performance HVAC trainer. Mitchell Bailey is the owner of Bailey’s 22 FEBRUARY 2022HIGH-PERFORMANCE HVAC TODAYHVACTODAY.COMFEBRUARY 2022 2324 FEBRUARY 2022HIGH-PERFORMANCE HVAC TODAY HVAC SMART MARTHVACTODAY.COMFEBRUARY 2022 25 Advertiser Index AD INDEX To Subscribe to High-Performance HVAC Today: ONLINE: Visit HVACToday.com/subscribe for a FREE digital subscription. PRINT: 1 year/$72; single copy $7. Canada: 1 year/$92; single copy $9. Payable in advance with U.S. funds. Prepaid subscriptions may be sent to: High-Performance HVAC Today, PO Box 147, Avon Lake, OH 44012. Phone: 440-949-1850; toll free 800-633-7058; or visit HVACToday.com/subscribe to order online. Arzel Zoning Technology, Inc. | www.ArzelZoning.com .................................................... 19 Baker Distributing Company | www.BakerDist.com ........................................................... 25 Duct Saddles | www.DuctSaddles.com ..................................................................................... 27 Goodman Manufacturing | www.GoodmanMfg.com ........................................................ 6 Lazco Corp. | www.LazcoCorp.com ............................................................................................ 24 R.E. Michel Company | www.REMichel.com .......................................................................... 23 The New Flat Rate | www.TheNewFlatRate.com ................................................................ 24 To Your Success | www.ToYourSuccess.com .......................................................................... 24 HIGH-PERFORMANCE HVAC TODAY TM Publisher Dominick Guarino Editor-in-Chief and Associate Publisher Mike Weil Art Director Judy Marquardt Online Development Director Brian Roseman Circulation Manager Andrea Begany-Garsed Go to ncilink.com/ContactMe with your comments and questions.26 FEBRUARY 2022HIGH-PERFORMANCE HVAC TODAY ble and latent temperatures to get enthalpy, and subtract supply enthalpy from return enthalpy to determine the temperature reduction (ΔH). You can also measure supply register and re- turn grille temperatures in the same way to get a rough idea of the entire system’s delta. Then mul- tiply this number by the airflow interpreted with your TESP reading to get delivered Btus. There’s a little more to it, and while this is just a rough snapshot, it will give you a pretty good idea of the existing system’s performance. AIRFLOW While you could measure airflow at every sup- ply and return, this often isn’t necessary during a sales call. Instead, use an airflow hood during the initial interview process with your customer. As you discuss existing issues and determine which rooms don’t heat or cool as well as they should, you can take the customer to those rooms and directly measure airflow at the registers and grilles. This is a key part of the educational selling process. Nothing compares to the customer actu- ally seeing what is going on with their own eyes. Each of these tests require some training and good instruments to quickly perform them. The tests will take a bit longer at first, and we rec- ommend practicing by performing them on your own home or a relative’s home the first few times. Most find that in no time they can do this test- ing very quickly and efficiently, truly impressing their customers. NCI even has a free app you can use on a smart phone to speed up the process. The key is getting started. Even your least tech- nical salesperson will be testing like a pro in no time, setting you apart from the competition. And they will be doing the right thing to provide your customers with the value and quality comfort sys- tem they deserve. W e commonly hear from contractors that salespeople are not techs and they don’t want to learn how to test an HVAC system before they pro- pose a replacement. If a salesperson truly cares about doing the right thing for his or her customer, it’s exactly what they should know how to do. Testing can help provide your customer with the safest, healthiest, most comfortable, and energy-efficient system possible. This process is easily learnable even by the least technical individual. Let’s look at the three measurements a sales- person should learn how to take on every working system they encounter. STATIC PRESSURE Static pressure truly is the blood pressure of the system. An equipment’s Total External Stat- ic Pressure (TESP) is equivalent to the highest blood pressure the heart sees. It’s an indicator of what’s going on with the entire system, and it al- lows you to interpret airflow leaving the fan. Typically the higher the static, the lower the airflow. While this doesn’t tell the whole story of whether a home is comfortable, or how much en- ergy is being wasted, it’s a very good start. TEMPERATURE By adding temperature to the equation you can begin to see a clearer picture of what is going on. You can start by measuring temperature at the supply and return side of the equipment to get a ΔT, or temperature change. In heating mode, you subtract the sensible re- turn temperature from the supply temperature to determine the temperature increase from the equipment. In cooling mode, you measure sensi- ONE MORE THING... By Dom Guarino Why Every Salesperson Should Learn How to Test Dominick Guarino is publisher of High-Performance HVAC Today magazine and CEO of National Comfort Institute, Inc. He can be reached at ncilink.com/ ContactMeHVACTODAY.COMFEBRUARY 2022 27Next >