Presentation on Construction Outlook at AHR Expo in NYC Jan 21 & 22, 2014
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share

Presentation on Construction Outlook at AHR Expo in NYC Jan 21 & 22, 2014

  • 353 views
Uploaded on

Presentation on Construction Outlook with emphasis on nonresidential building construction. Given at the AHR Expo in NYC at the Javits Center on Jan 21 & 22, 2014

Presentation on Construction Outlook with emphasis on nonresidential building construction. Given at the AHR Expo in NYC at the Javits Center on Jan 21 & 22, 2014

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
353
On Slideshare
351
From Embeds
2
Number of Embeds
1

Actions

Shares
Downloads
1
Comments
0
Likes
0

Embeds 2

https://twitter.com 2

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. 2014 AHR Expo January 2014
  • 2. Outlook for the Economy and Construction Presented by: Bernard M. Markstein Reed U.S. Chief Economist
  • 3. Outlook for the Economy and Construction State of the U.S. Economy  Economy improving  Employment growing, but should be faster  Inflation moderate  The Fed begins to taper  Housing/residential construction a positive 3
  • 4. Outlook for the Economy and Construction Risks to the Economy  The federal debt ceiling/Congress  The Fed and interest rates  Europe  European government debt default  The euro  Energy (oil) prices 4
  • 5. Outlook for the Economy and Construction Forecast: Construction to improve Construction Spending and its Components $ Billions 1,400 History 1,300 Forecast 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 02 03 04 Residential 05 06 07 08 09 Nonresidential Building 10 11 12 13 14 15 Heavy Construction Source: History – U.S. Census Bureau; Forecast – Reed Construction Data 5
  • 6. Outlook for the Economy and Construction 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 6
  • 7. Outlook for the Economy and Construction Multifamily Housing Starts Thousands of Units, SAAR 500 450 Nation’s long-run (trend) need for the next decade High Estimate (350,000 starts per year) 400 350 300 250 200 150 Nation’s long-run (trend) need for the next decade Low Estimate (250,000 starts per year) 100 50 0 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Source: U.S. Census Bureau 7
  • 8. Outlook for the Economy and Construction Residential Spending Components 800 $ Billions History 700 Forecast 600 500 400 300 200 100 0 02 03 04 05 06 Improvements 07 08 09 10 11 Single-family Source: History – U.S. Census Bureau; Forecast – Reed Construction Data 12 13 14 15 Multifamily 8
  • 9. Outlook for the Economy and Construction Forecast: Nonresidential construction to strengthen Construction Spending: Nonresidential Construction 475 Billion $, SAAR 450 425 400 375 350 325 300 275 250 225 200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: History – U.S. Census Bureau; Forecast – Reed Construction Data 2012 2013 2014 2015 9
  • 10. Outlook for the Economy and Construction Nonresidential Construction Spending 100 $ Billions 90 80 2006 to 2012 ’13 ’14 ’15 70 60 50 40 30 20 10 0 Hotel/Lodging Office Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Commercial 10
  • 11. Outlook for the Economy and Construction Nonresidential Construction Spending 110 $ Billions 100 90 2006 to 2012 ’13 ’14 ’15 80 70 60 50 40 30 20 10 0 Manufacturing Healthcare Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Education 11
  • 12. Outlook for the Economy and Construction Source: Philadelphia Federal Reserve Bank 12
  • 13. Outlook for the Economy and Construction Source: Philadelphia Federal Reserve Bank 13
  • 14. Outlook for the Economy and Construction Demand for HVAC Materials This heat map is a view of the forecasted demand for materials within CSI division 23 (HVAC) for new construction and additions (excluding renovation and alteration). Reed can look at the forecasted demand for 26 individual categories within division 23 including such as HVAC insulation, instrumentation and control for HVAC, facility fuel piping, pumps and storage tanks, HVAC ducts and casings, etc. Source: Intelligent Leads by Reed Construction Data 14
  • 15. Outlook for the Economy and Construction PPI: HVAC 190 1982 = 100, Not Seasonally Adjusted Y/Y % 8 Y/Y % (RHS) 180 177.1 7 6 170 5 160 2.8% 4 150 3 140 2 1 130 0 120 110 PPI Index (LHS) 100 Up 13% from recession low (March 2008) -1 -2 -3 Source: Bureau of Labor Statistics 15
  • 16. Outlook for the Economy and Construction HVAC Input Costs 500 2000 Q1 = 100 450 400 350 300 250 200 150 100 50 00 Q1 01 Q1 02 Q1 03 Q1 04 Q1 05 Q1 Copper pipe, Type L, 1/2" diam. PVC pipe, Schedule 40, 2" diam. Galvanized steel sheet metal ductwork Source: RSMeans cost data 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 Steel pipe, Schedule 40, black, threaded, 2" diam. Aluminum sheet metal ductwork 16
  • 17. Outlook for the Economy and Construction 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 17
  • 18. Outlook for the Economy and Construction 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/marketintelligence/articles/  Blog: http://www.reedconstructiondata.com/marketintelligence/bernie-markstein/ 18