Mfec markstein las vegas_sep 2013

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Charts for panel, "Annual Economic Outlook & State of the Industry Report," at Multifamily Executive Council Conference

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Mfec markstein las vegas_sep 2013

  1. 1. SEPTEMBER 9–11 • BELLAGIO • LAS VEGAS, NV
  2. 2. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV Annual Economic Outlook & State of the Industry Report Outlook for the Economy and Nonresidential Construction Bernard Markstein U.S. Chief Economist Reed Construction Data
  3. 3. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT The U.S. Economy
  4. 4. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT  Economy has been growing at a barely acceptable rate  Employment growing, but should be faster  Unemployment rate down, but not always for the right reasons  Inflation moderate  SF housing recovering, but from a very low level  MF largely recovered, but still room for improvement  Lending standards, although improving, remain relatively tight  Interest rates up and headed higher (eventually)
  5. 5. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Risks to the Economy
  6. 6. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT  Funding federal operations – can Congress accomplish any of its basic functions?  The federal debt ceiling – another chance for congressional dysfunction  Fed tightening/higher interest rates  Europe  European government debt default  The euro  Energy (oil) prices
  7. 7. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Construction turned around in 2012, but has struggled this year
  8. 8. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT 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 Residential Nonresidential Building Heavy Construction $ Billions History Forecast Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Construction Spending and its Components
  9. 9. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Residential construction is recovering, but from a low level
  10. 10. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 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 Thousands of Units, SAAR Nation’s long-run (trend) need for the next decade High Estimate (1.45 million starts per year) Nation’s long-run (trend) need for the next decade Low Estimate (1.15 million starts per year) Single-Family Housing Starts Source: U.S. Census Bureau
  11. 11. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Source: U.S. Census Bureau 0 50 100 150 200 250 300 350 400 450 500 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 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
  12. 12. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Source: U.S. Census Bureau 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 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
  13. 13. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT 0 100 200 300 400 500 600 700 800 02 03 04 05 06 07 08 09 10 11 12 13 14 Improvements Single-family Multifamily $ Billions Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Residential Spending Components History Forecast
  14. 14. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Nonresidential building construction has struggled this year, but is expected to perform better in coming months and in 2014
  15. 15. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT 0 10 20 30 40 50 60 70 80 90 100 Hotel/Lodging Office Commerical 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Billions Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Nonresidential Construction Spending
  16. 16. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Nonresidential Construction Spending 0 10 20 30 40 50 60 70 80 90 100 110 Religious Healthcare Education 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Billions
  17. 17. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Nonresidential Construction Spending 0 10 20 30 40 50 60 70 Public safety Amusement and recreation Manufacturing 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Billions
  18. 18. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Heavy engineering (non-building) construction held up best over the last few years
  19. 19. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Heavy Engineering Construction Spending 0 10 20 30 40 50 60 70 80 90 100 110 120 130 Transportation Communication Power 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Billions
  20. 20. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Heavy Engineering Construction Spending 0 10 20 30 40 50 60 70 80 90 100 110 Highway Water and Sewer Conservation 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Billions
  21. 21. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT A look at regional economic performance
  22. 22. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Source: Philadelphia Federal Reserve Bank
  23. 23. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT Source: Philadelphia Federal Reserve Bank
  24. 24. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT  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 Connect with Reed Construction Data
  25. 25. SEPTEMBER 9–11, 2013 • BELLAGIO • LAS VEGAS, NV ANNUAL ECONOMIC OUTLOOK & STATE OF THE INDUSTRY REPORT 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/

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