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Presentation to the National Association of Steel Pipe Distributors Summer Conference in Toronto, Friday, June 7, 2013 on the outlook for commercial construction

Presentation to the National Association of Steel Pipe Distributors Summer Conference in Toronto, Friday, June 7, 2013 on the outlook for commercial construction

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Naspd 2013 summer conference toronto jun 7, 2013 Naspd 2013 summer conference toronto jun 7, 2013 Presentation Transcript

  • NASPD 2013 Summer ConferenceJune 7, 2013
  • Greenbuild 2010Construction Trends and HowThey Will Affect the Steel PipeIndustryPresented by: Bernard M. MarksteinReed U.S. Chief Economist
  • Outlook for ConstructionGreenbuild 2010About Reed Construction DataReed Construction Data is a leading constructioninformation provider.We deliver targeted and timely project leads, market intelligence,marketing solutions and RSMeans cost data to constructionprofessionals throughout the US and Canada.MaximizeProductivityIncreaseProfitsDriveGrowthOur products and services simplify decision-making and helporganizations:
  • Outlook for ConstructionGreenbuild 2010Reed Construction DataPlanExecuteAnalyzePredictMarket Intelligence cūbus Reed Construction Forecast Construction Starts Database Reed Market Fundamentals Expansion IndexRSMeans RSMeans Online™ RSMeans Cost Data Green ModelsProject Leads Connect™ SmartSpecs™ DataLink™Marketing Solutions specEdge™ SmartBuilding Index™
  • Outlook for ConstructionGreenbuild 2010PlanExecuteAnalyzePredictMarket Intelligence and ForecastsWith Reed you can: Set strategy based on current market trends Identify new development opportunities Discover high-growth markets Align resources to meet demandReduce UncertaintyReed Construction Data delivers timely forecastsand industry analysis to keep your businessprofitable–even in this tough economic climate.
  • Outlook for ConstructionThe U.S.Economy
  • Outlook for Construction7Greenbuild 2010 Economy has been growing at a barely acceptable rate Employment growing, but should be faster Unemployment rate down, but not always for the rightreasons Inflation moderate Single-family housing recovering, but from a very lowlevel Multifamily largely recovered Lending standards, although improving, remainrelatively tight
  • Outlook for Construction8Risks to theEconomy
  • Outlook for Construction9Greenbuild 2010 The federal budget (see you in September?) The federal debt ceiling Europe European government debt default The euro Energy (oil) prices
  • Outlook for Construction10Commercial constructionturned around in 2012and is expected tocontinue to improve
  • Outlook for Construction11Greenbuild 201001002003004005006007008009001,0001,1001,2001,3001,40002 03 04 05 06 07 08 09 10 11 12 13 14Residential Nonresidential Building Heavy Construction$ BillionsHistory ForecastSource: History – U.S. Census Bureau; Forecast – Reed Construction DataConstruction Spending andits Components
  • Outlook for Construction12Greenbuild 2010-35-30-25-20-15-10-50510152025303540453-Month Moving Average, Year-over-Year % ChangeReed Total Starts(3-Mo MA YoY)Source: Reed Construction Data
  • Outlook for Construction13Greenbuild 20107007508008509009501,0001,0501,1001,1501,2001,2502002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Billion $, SAARTotal Construction SpendingSource: History – U.S. Census Bureau; Forecast – Reed Construction Data
  • Outlook for Construction14Residentialconstruction isrecovering, butfrom a low level
  • Outlook for Construction15Greenbuild 201002505007501,0001,2501,5001,7502,0002,2502,50088 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13Thousands of Units, SAARNation’s long-run (trend) need forthe next decadeLow Estimate(1.4 million starts per year)Nation’s long-run (trend) need forthe next decadeHigh Estimate(1.8 million starts per year)Total Housing StartsSource: U.S. Census Bureau
  • Outlook for Construction16Greenbuild 201002505007501,0001,2501,5001,7502,0002,2502,5002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Thousands of Units, SAARNation’s long-run (trend) need for thenext decadeLow Estimate(1.4 million starts per year)Nation’s long-run (trend) need forthe next decadeHigh Estimate(1.8 million starts per year)Total Housing Starts(3-Month Moving Average)Source: U.S. Census Bureau
  • Outlook for Construction17Single-family housingmarket is showingsolid recovery
  • Outlook for Construction18Greenbuild 201002004006008001,0001,2001,4001,6001,8002,00088 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13Thousands of Units, SAARNation’s long-run (trend) need forthe next decadeHigh Estimate(1.45 million starts per year)Nation’s long-run (trend) need forthe next decadeLow Estimate(1.15 million starts per year)Single-Family Housing StartsSource: U.S. Census Bureau
  • Outlook for Construction19Greenbuild 201002004006008001,0001,2001,4001,6001,8002,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Thousands of Units, SAARNation’s long-run (trend) need for thenext decadeLow Estimate(1.15 million starts per year)Nation’s long-run (trend) need forthe next decadeHigh Estimate(1.45 million starts per year)Single-Family Housing Starts(3-Month Moving Average)Source: U.S. Census Bureau
  • Outlook for Construction20The multifamilyconstruction market isnear normal
  • Outlook for Construction21Greenbuild 201005010015020025030035040045050088 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13Thousands of Units, SAARNation’s long-run (trend) need forthe next decadeHigh Estimate(350,000 starts per year)Nation’s long-run (trend) needfor the next decadeLow Estimate(250,000 starts per year)Multifamily Housing StartsSource: U.S. Census Bureau
  • Outlook for Construction22Greenbuild 201001002003004005006007008009001,0001,1001,20059 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 13Thousands of Units, SAARNation’s long-run (trend) needfor the next decadeHigh Estimate(350,000 starts per year)Nation’s long-run (trend) needfor the next decadeLow Estimate(250,000 starts per year)Multifamily Housing StartsSource: U.S. Census -Bureau
  • Outlook for Construction23Greenbuild 201005010015020025030035040045050000 01 02 03 04 05 06 07 08 09 10 11 12 13Thousands of Units, SAARNation’s long-run (trend) need for thenext decadeLow Estimate(250,000 starts per year)Nation’s long-run (trend) needfor the next decadeHigh Estimate(350,000 starts per year)Multifamily Housing Starts(3-Month Moving Average)Source: U.S. Census Bureau
  • Outlook for Construction24Residentialconstructionspending
  • Outlook for Construction25Greenbuild 2010010020030040050060070080002 03 04 05 06 07 08 09 10 11 12 13 14Improvements Single-family Multifamily$ BillionsResidential Spending ComponentsSource: History – U.S. Census Bureau; Forecast – Reed Construction DataHistory Forecast
  • Outlook for Construction26Greenbuild 2010-60-50-40-30-20-10010203040503-Month Moving Average, Year-over-Year % ChangeReed Residential Starts(3-Mo MA YoY)Source: Reed Construction Data
  • Outlook for Construction27Greenbuild 201010015020025030035040045050055093 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14Billion $, SAARSource: History – U.S. Census Bureau; Forecast – Reed Construction DataConstruction Spending:New Residential Construction
  • Outlook for Construction28Greenbuild 2010050100150200250300350400450Single-Family Multifamily Improvements2002 2003 2004 2005 20062007 2008 2009 2010 20112012 2013 2014$ BillionsResidential Construction SpendingSource: History – U.S. Census Bureau; Forecast – Reed Construction Data
  • Outlook for Construction29Nonresidential buildingconstruction hasstruggled lately, but isexpected to performbetter in the second halfof this year and in 2014
  • Outlook for Construction30Greenbuild 2010-40-35-30-25-20-15-10-50510152025303-Month Moving Average, Year-over-Year % ChangeReed Nonresidential Starts(3-Mo MA YoY)Source: Reed Construction Data
  • Outlook for Construction31Greenbuild 20102002252502753003253503754004254504752002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Billion $, SAARConstruction Spending:Nonresidential ConstructionSource: History – U.S. Census Bureau; Forecast – Reed Construction Data
  • Outlook for Construction32Greenbuild 2010Nonresidential Construction SpendingSource: History – U.S. Census Bureau; Forecast – Reed Construction Data0102030405060708090100Hotel/Lodging Office Commerical2002 2003 2004 2005 20062007 2008 2009 2010 20112012 2013 2014$ Billions
  • Outlook for Construction33Greenbuild 2010Nonresidential Construction SpendingSource: History – U.S. Census Bureau; Forecast – Reed Construction Data0102030405060708090100110Religious Healthcare Education2002 2003 2004 2005 20062007 2008 2009 2010 20112012 2013 2014$ Billions
  • Outlook for Construction34Greenbuild 2010Nonresidential Construction SpendingSource: History – U.S. Census Bureau; Forecast – Reed Construction Data010203040506070Public safety Amusement and recreation Manufacturing2002 2003 2004 2005 20062007 2008 2009 2010 20112012 2013 2014$ Billions
  • Outlook for Construction35Heavy engineering(non-building)construction heldup best over thelast few years
  • Outlook for Construction36Despite considerablechallenges, the outlookfor heavy engineeringconstruction is fairlypositive
  • Outlook for Construction37Greenbuild 2010Reed Heavy Engineering Starts(3-Mo MA YoY)Source: Reed Construction Data-50-40-30-20-10010203040506070803-Month Moving Average, Year-over-Year % Change
  • Outlook for Construction38Greenbuild 2010Construction Spending:Heavy EngineeringSource: History – U.S. Census Bureau; Forecast – Reed Construction Data1501752002252502753003252002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Billion $, SAAR
  • Outlook for Construction39Greenbuild 2010Heavy Engineering Construction SpendingSource: History – U.S. Census Bureau; Forecast – Reed Construction Data0102030405060708090100110120130Transportation Communication Power2002 2003 2004 2005 20062007 2008 2009 2010 20112012 2013 2014$ Billions
  • Outlook for Construction40Greenbuild 2010Heavy Engineering Construction SpendingSource: History – U.S. Census Bureau; Forecast – Reed Construction Data0102030405060708090100110Highway Water and Sewer Conservation2002 2003 2004 2005 20062007 2008 2009 2010 20112012 2013 2014$ Billions
  • Outlook for Construction41A look at regionaleconomicperformance
  • Outlook for Construction42Source: Philadelphia Federal Reserve Bank
  • Outlook for Construction43Source: Philadelphia Federal Reserve Bank
  • Outlook for Construction44Greenbuild 2010Connect with Reed Construction Data Twittertwitter.com/BMarkstein Twittertwitter.com/ReedConstrData Facebookwww.facebook.com/Reed-Construction-Data LinkedInwww.linkedin.com/company/reed-construction-data webwww.reedconstructiondata.com
  • Outlook for Construction45Greenbuild 2010Contact Information and LinksBernard 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/