The impact on sheet metal work associated with this trend toward larger systems should be favorable on balance. Table 15 displays the percentage of total HVAC work in the two types of buildings analyzed--commercial buildings and schools.

Several reasons account for the increased sheet metal work associated with central station equipment. First, the decision to install a central system usually goes hand in hand with a desire for better air quality and air control. This in itself implies more ductwork and associated airside equipment. More pertinent, however, is the fact that central station units have larger air handling equipment, which implies more extensive-and heavier--ductwork.

The tabulation below shows the result of computing the sheet metal cost as a percentage of total HVAC work averaged for the system market share for a typical commercial complex and school. The numbers are weighted averages computed as for the entries for the core-type buildings.

The impact of the trend toward larger systems on sheet metal worker earnings is assessed in the following tabulation. It displays the level

of total sheet metal worker earnings from the construction of the commercial complex-type buildings--as a function of the trend previously discussed (millions of 1975 dollars).

Earnings grow in real terms from $343 million in 1975 to $458 million in 1985, an increase of about 34 percent. The tabulation permits isolation of the portion of this increase that is directly attributable to the trend toward larger systems as opposed to the increase in construction activity charted in Table 11. If it were not for the trend toward larger systems, total earnings in 1985 would be some $424 million rather than $458 million.

Industrial Plants

Although it is difficult to generalize about trends in the heating, ventilating, and air conditioning of manufacturing plants, the trend toward increased air conditioning of plants is one development that has a significant bearing on projected sheet metal work in this sector of the construction industry.

Increasing

There are several explanations for this development. numbers of workers are coming to expect air conditioning, for a variety of sociological reasons. Moreover, unions are backing up these workers in their demands for greater comfort. Office blocks in plants are increasingly air conditioned, as are special areas such as computer rooms and research laboratories where controlled atmospheres are required. From the standpoint of the other side of the bargaining table, management is becoming aware of the fact that significant productivity gains can be associated with the improvement of working conditions made possible by air conditioning. This is especially true as the proportion of the work force that is engaged in sophisticated light industrial activity (computer manufacturing and electronics) grows. In this kind of work, the productivity gains from air conditioning more than pay for the cost of air conditioning.

SRI's estimate of the current (1975) and projected share of new plant construction that is or will be air conditioned* is shown below.

It is straight forward to ascertain the impact of the trend portrayed above on projected sheet metal work. The percentage of total HVAC work accounted for by sheet metal work as a function of whether a (typical) plant is air conditioned or not then is calculated as:

The tabulation below shows the average percentage of total HVAC work accounted for by sheet metal work as a function of the market share mix (as between air conditioned and not air conditioned) that prevails.

From these calculations, the implications of the trend toward more air conditioning on the projected level of sheet metal worker earnings have been computed in millions of 1975 dollars as shown below:

*

Approximately 12 percent of all existing plants are currently air conditioned. In this discussion, heavy plant construction is combined with light plant construction.

Between 1975 and 1985 real earnings increase in the optimistic case by 64 percent from $99 million to $162 million. Of this increase, $26 million is due solely to the trend toward greater use of air conditioning in industrial plants.

Power Plant Construction

Total installed generating capacity in the United States currently amounts to 452 gigawatts. This is expected to grow at an annual rate of 4 percent over the next decade to an expected capacity of 669 gigawatts in 1985.

At present approximately 35 percent of new capacity added is nuclear. SRI energy experts expect this percentage to grow to 55 percent by 1985. A typical nuclear plant will require twice as much dollar expenditure on sheet metal work as a conventional fossil fuel fired plant. However, since the capacity of the nuclear plant is twice that of the conventional plant, there will be no net effect on the total amount of sheet metal work resulting from a shift toward nuclear energy. Sheet metal work expressed as a percentage of megawatts of capacity added is constant, irrespective of the type of plant constructed. This can be seen from the fact that the sheet metal worker earnings from construction of a typical nuclear plant (1,000 megawatts) amount to $3 million in 1975 dollars as contrasted to $1.5 million in the case of a conventional plant (500 megawatts).

work:

There are several reasons why nuclear plants use more sheet metal

Ventilation--In the "containment area" (which houses the
reactor), the purge system that filters out radioactive
particles will have to be airtight. Joints will have to
be completely welded instead of being riveted. Sheet metal
workers perform this work.

The sheet metal used will be of heavier gauge.

Atomic Energy Commission regulations require three separate
ventilation and air conditioning systems in the three prin-
cipal areas of the power plant, namely the containment area,
the auxiliary area (which contains the radioactive waste and
fuel handling equipment), and the turbine area.

Nuclear plants may have some prefabricated panel work. If
the sheet metal workers claim the installation of such
paneling as within their jurisdiction, there is that much
more sheet metal work for them.

The trend toward nuclear installations should have virtually no impact on the total level of sheet metal worker earnings over the next decade--notwithstanding the fact that a nuclear plant will require twice the sheet metal work of a conventional plant. The reason for this is simply that the capacity of a typical nuclear plant (1,000 megawatts) is twice that of a typical fossil fuel fired plant (500 megawatts). To provide a given increment of generating capacity, only half as many nuclear plants need be built as conventional plants.

Thus, any increase in sheet metal worker earnings from power plant construction over the next decade will come from growth in the construction of power plants, of whatever type.

*

It has been noted that an annual growth rate of 4 percent in installed generating capacity is expected over the next decade. This expectation is reflected in the estimates of total annual expenditures for the construction of power plants in 1975 and 1985 appearing in Table 11 ($7.6 billion in 1975, $11.4 billion in 1985). By applying the cost factors characterizing power plant construction that appear in Table 12 to these dollar figures, the following estimates have been calculated for growth of sheet metal worker earning power: $82 million at the 1975 level and $125 million at the 1985 level. This amounts to a growth of 50 percent in constant dollars. It is emphasized that all this growth is accounted for by the increased activity in power plant construction and not by the trend toward nuclear power.

Other Developments

Several technological trends and related developments will have, at most, a slight impact on sheet metal work.

*

Four percent is perhaps more optimistic than some experts have forecast. Should prices of power continue to rise and conservation efforts succeed, the demand for power may increase at an average annual rate of about 3 percent.