Charts on Construction for AGC Financial Issues Forum June 19, 2014
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Charts on Construction for AGC Financial Issues Forum June 19, 2014

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Charts on residential and nonresidential construction presented to the Associated General Contractors of America (AGC) Financial Issues Forum June 19, 2014

Charts on residential and nonresidential construction presented to the Associated General Contractors of America (AGC) Financial Issues Forum June 19, 2014

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Charts on Construction for AGC Financial Issues Forum June 19, 2014 Charts on Construction for AGC Financial Issues Forum June 19, 2014 Presentation Transcript

  • AGC Financial Issues Forum June 19, 2014
  • ECONOMIC OUTLOOK Presented by: Bernard M. Markstein Reed U.S. Chief Economist
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  • Economic Outlook 7 The U.S. Economy
  • Economic Outlook 8 State of the U.S. Economy  Economy improving, but weather muddles the numbers. What is really going on?  Employment growing, but should be faster  Inflation moderate (too low?)  The Fed has started to taper  Housing/residential construction a positive
  • Economic Outlook 9 Risks to the Economy  Energy (oil) prices  The Fed and interest rates  Significant cuts in government spending in the near term  Europe  European government debt default  The euro
  • Economic Outlook 10 Construction Outlook
  • Economic Outlook 11 700 750 800 850 900 950 1,000 1,050 1,100 1,150 1,200 1,250 Billion $, SAAR Total Construction Spending (3 Month Moving Average) Source: History – U.S. Census Bureau
  • Economic Outlook 12 -40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 3-Month Moving Average, Year-over-Year % Change Reed Total Starts (3-Mo MA YoY) Source: Reed Construction Data
  • Economic Outlook 13 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Residential Nonresidential Building Heavy Construction $ Billions History Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Forecast Forecast: Construction to improve Construction Spending and its Components
  • Economic Outlook 14 Residential construction is recovering, but from a low level  Single-family housing market is on the mend, but much further to go before it is back to normal  Multifamily market has largely recovered, but still some room for growth
  • Economic Outlook 15 0 250 500 750 1,000 1,250 1,500 1,750 2,000 2,250 2,500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Thousands of Units, SAAR Nation’s long-run (trend) need for the next decade Low Estimate (1.4 million starts per year) Nation’s long-run (trend) need for the next decade High Estimate (1.8 million starts per year) Total Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau
  • Economic Outlook 16 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Thousands of Units, SAAR Nation’s long-run (trend) need for the next decade Low Estimate (1.15 million starts per year) Nation’s long-run (trend) need for the next decade High Estimate (1.45 million starts per year) Single-Family Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau
  • Economic Outlook 17 0 50 100 150 200 250 300 350 400 450 500 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Thousands of Units, SAAR Nation’s long-run (trend) need for the next decade Low Estimate (250,000 starts per year) Nation’s long-run (trend) need for the next decade High Estimate (350,000 starts per year) Multifamily Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau
  • Economic Outlook 18 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 Thousands of Units, SAAR Nation’s long-run (trend) need for the next decade High Estimate (350,000 starts per year) Nation’s long-run (trend) need for the next decade Low Estimate (250,000 starts per year) Multifamily Housing Starts (3-Month Moving Average) Source: U.S. Census -Bureau
  • Economic Outlook 19 100 150 200 250 300 350 400 450 500 550 Billion $, SAAR New Residential Construction Spending (3 Month Moving Average) Source: History – U.S. Census Bureau
  • Economic Outlook 20 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 3-Month Moving Average, Year-over-Year % Change Reed Residential Starts (3-Mo MA YoY) Source: Reed Construction Data
  • Economic Outlook 21 0 100 200 300 400 500 600 700 800 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Improvements Single-family Multifamily $ Billions Residential Spending Components Source: History – U.S. Census Bureau; Forecast – Reed Construction Data History Forecast
  • Economic Outlook 22 0 50 100 150 200 250 300 350 400 450 Single-Family Multifamily Improvements $ Billions 2006 to 2013 ’14 ’15 Residential Construction Spending Source: History – U.S. Census Bureau; Forecast – Reed Construction Data
  • Economic Outlook 23 Nonresidential Building Construction
  • Economic Outlook 24 200 250 300 350 400 450 500 Billion $, SAAR Nonresidential Construction Spending (3 Month Moving Average) Source: History – U.S. Census Bureau
  • Economic Outlook 25 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 3-Month Moving Average, Year-over-Year % Change Reed Nonresidential Building Starts (3-Mo MA YoY) Source: Reed Construction Data
  • Economic Outlook 26 275 269 283 302 340 404 438 376 290 284 298 299 310 336 0 50 100 150 200 250 300 350 400 450 500 550 02 03 04 05 06 07 08 09 10 11 12 13 14 15 $ Billions History Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Forecast Nonresidential Construction Spending
  • Economic Outlook 27 0 10 20 30 40 50 60 70 80 90 100 Hotel/Lodging Office Commercial $ Billions 2006 to 2013 ’14 ’15 Nonresidential Construction Spending Source: History – U.S. Census Bureau; Forecast – Reed Construction Data
  • 28 0 10 20 30 40 50 60 70 80 90 100 110 Manufacturing Healthcare Education $ Billions 2006 to 2013 ’14 ’15 Nonresidential Construction Spending Source: History – U.S. Census Bureau; Forecast – Reed Construction Data
  • Economic Outlook 29 Heavy engineering
  • Economic Outlook 30 125 150 175 200 225 250 275 300 325 Billion $, SAAR Heavy Engineering Construction Spending (3 Month Moving Average) Source: History – U.S. Census Bureau
  • Economic Outlook 31 Reed Heavy Engineering Starts (3-Mo MA YoY) Source: Reed Construction Data -40 -30 -20 -10 0 10 20 30 40 50 60 3-Month Moving Average, Year-over-Year % Change
  • Economic Outlook 32 171 171 169 185 208 248 272 274 265 251 272 263 275 299 0 50 100 150 200 250 300 350 400 02 03 04 05 06 07 08 09 10 11 12 13 14 15 $ Billions History Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Forecast Heavy Engineering Construction Spending
  • Economic Outlook 33 0 10 20 30 40 50 60 70 80 90 100 110 120 Transportation Communication Power $ Billions 2006 to 2013 ’14 ’15 Heavy Engineering Construction Spending Source: History – U.S. Census Bureau; Forecast – Reed Construction Data
  • Economic Outlook 34 0 10 20 30 40 50 60 70 80 90 100 Highway Water and Sewer Conservation $ Billions 2006 to 2013 ’14 ’15 Heavy Engineering Construction Spending Source: History – U.S. Census Bureau; Forecast – Reed Construction Data
  • Economic Outlook 35 Connect with Reed Construction Data  Twitter twitter.com/Bmarkstein  Twitter twitter.com/ReedConstrData  Facebook www.facebook.com/Reed-Construction-Data  LinkedIn www.linkedin.com/company/reed-construction-data  web www.reedconstructiondata.com
  • Economic Outlook 36 Contact Information and Links Bernard M. Markstein  Office: 301-588-5190  Mobile: 404-952-3381  b.markstein@reedbusiness.com  U.S. Forecast and Commentary: http://www.reedconstructiondata.com/market- intelligence/articles/  Blog: http://www.reedconstructiondata.com/market- intelligence/bernie-markstein/