Cliff Brewis Outlook 2012

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Cliff Brewis presentation at Construction Outlook 2012

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Cliff Brewis Outlook 2012

  1. 1. Cliff BrewisSenior Director, OperationsMcGraw-Hill Construction
  2. 2. Where We Have Been Total Construction Activity by Cycle Cyclical Trough (T) = 100, Based on Constant 2000 Dollars 190 175 1975-1982 160 145 1982-1991 1991-2012 130 115 100 85 70 1991- 2005 T T+2 T+4 T+6 T+8 T+10 T+12 T+14 T+16 T+18 T+20 T+22 Years from Cyclical Trough
  3. 3. The Overall Economy The US Economy has upside limits and downside potential. GDP Pattern: Real GDP Growth Quarterly “11Q2 +1.3% History Forecast7 2009 2010 2011 20125 -3.5% +3.0% +1.6% +2.0%31-1-3-5 Major Inhibitors:-7 – Intractable Housing-9 01 02 03 04 05 06 07 08 09 10 11 12 – Budget Deficit – Unemployment/Demand – Europe
  4. 4. Area of Concern: Public Construction Funding Pushing down on the economy Federal Budget Surplus/Deficit Billions of Dollars, CBO Projections State and Local Revenues 400 200 0 -200 -400 -600 -800-1,000-1,200-1,400-1,600 90 92 94 96 98 00 02 04 06 08 10 12
  5. 5. Significance Of Housing Best Indicator of Local Market Strength S&P Case Shiller Home Price Index 20-Metro Composite, Indexed: Jan. 2000=100 220 200 180 160 140 120 100 01 02 03 04 05 06 07 08 09 10 11 12
  6. 6. Employment by State
  7. 7. California: Single Family $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012‘$000.00
  8. 8. California: Multi Family $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012‘$000.00
  9. 9. U.S. • Multifamily Housing Top 8 Metros – September YTD 2011 vs. 2010 New York +32% Washington DC +183% Boston +32% Dallas +270% +36% Chicago 2010 2011 +170% Seattle +66% Los Angeles +57%Miami-Fort Lauderdale 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Value in Billions
  10. 10. California: Retail/Warehouses Retail$3,000,000 Warehouses$2,500,000 $2,500,000$2,000,000 $2,000,000$1,500,000 $1,500,000$1,000,000 $1,000,000 $500,000 $500,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ‘$000.00
  11. 11. California: Offices $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012‘$000.00
  12. 12. U.S. Commercial Buildings • Offices Top 8 Metros – September YTD 2011 vs. 2010 - 48% New York Salt Lake City +1200% Boston +134% -52% Washington DC Houston +143 Chicago +26% 2010 2011Minneapolis-St. Paul +428% Seattle +83% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Value in Billions
  13. 13. California: Healthcare $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012‘$000.00
  14. 14. California: Education $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012‘$000.00
  15. 15. U.S. Institutional • Educational Buildings K-12 School Construction larger than Colleges/Universities/ Community Colleges, particularly in sq. ft. terms, less so in dollar terms. K-12 has typically shown steeper up-and-down swings. Education Buildings - Segments Education Buildings - Segments Millions of Sq. Ft. Billions of Dollars200 40175 35 K-12 Schools K-12 Schools150 30125 25100 20 Colleges/Universities/ 75 15 Community Colleges Colleges/Universities/ 50 10 Community Colleges 25 5 0 0 90 92 94 96 98 00 02 04 06 08 10 12 90 92 94 96 98 00 02 04 06 08 10 12• In 2010, sq. ft for K-12 school construction • In 2010, dollars for K-12 school construction was 3.6 times the size for Colleges/ was 2.3 times the size of Colleges/Universities/ Universities/Community Colleges Community Colleges
  16. 16. U.S. Institutional • Educational Buildings Top 5 States – September YTD 2011 vs. 2010 -11% New York -34% California -35% Texas +17%Massachusetts 2010 2011 -14% Ohio 0.0 1.0 2.0 3.0 4.0 5.0 Value in Billions
  17. 17. California: Public ex Schls $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012‘$000.00
  18. 18. California: Highways $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012‘$000.00
  19. 19. U.S. Public Works • Highways & Bridges Top 5 States – September YTD 2011 vs. 2010 +24% Texas +2% California +112%Washington 2010 2011 -29% Illinois -35% Florida 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Value in Billions
  20. 20. California: Structure Type 2006 2007 2008 2009 2010 2011 2012 EDUCATION $6,693,899 $5,624,163 $8,389,268 $4,243,638 $5,461,528 $3,652,842 $3,453,074 -16.0% 49.2% -49.4% 28.7% -33.1% -5.5% GOVT x schls $917,450 $901,991 $941,567 $1,651,554 $589,838 $1,109,676 $1,003,439 -1.7% 4.4% 75.4% -64.3% 88.1% -9.6% HEALTH $2,105,817 $3,128,049 $2,325,602 $2,953,438 $2,940,200 $3,164,533 $3,144,388 48.5% -25.7% 27.0% -0.4% 7.6% -0.6% HIGHWAY $3,586,689 $3,584,021 $4,135,368 $3,617,681 $3,578,835 $3,692,858 $3,639,106 -0.1% 15.4% -12.5% -1.1% 3.2% -1.5% HOTEL $1,268,243 $1,132,320 $544,434 $556,980 $114,601 $147,377 $220,710 -10.7% -51.9% 2.3% -79.4% 28.6% 49.8% MFG $694,380 $516,590 $512,135 $568,810 $257,108 $355,898 $420,674 -25.6% -0.9% 11.1% -54.8% 38.4% 18.2% MULTI RES $7,286,060 $5,458,202 $3,741,078 $963,068 $1,541,216 $1,523,600 $2,077,791 -25.1% -31.5% -74.3% 60.0% -1.1% 36.4% OFFICE $3,509,386 $3,359,340 $1,862,668 $1,462,696 $948,541 $780,430 $838,371 -4.3% -44.6% -21.5% -35.2% -17.7% 7.4% ONE FAMILY $25,689,625 $16,847,205 $8,882,785 $6,889,277 $7,167,967 $6,332,685 $6,686,356 -34.4% -47.3% -22.4% 4.0% -11.7% 5.6% RETAIL $2,185,000 $2,782,949 $2,013,468 $998,577 $936,040 $910,142 $1,022,755 27.4% -27.6% -50.4% -6.3% -2.8% 12.4% WAREHOUSE $1,409,346 $1,363,134 $1,214,879 $448,252 $217,810 $298,518 $408,937 -3.3% -10.9% -63.1% -51.4% 37.1% 37.0% WATER $1,716,305 $2,049,777 $2,004,652 $1,582,216 $1,684,722 $1,141,553 $1,155,952 19.4% -2.2% -21.1% 6.5% -32.2% 1.3% TOTAL $67,998,286 $59,244,698 $48,043,677 $35,672,178 $40,892,129 $42,431,483 $42,217,077 -12.9% -18.9% -25.8% 14.6% 3.8% -0.5%‘$000.00
  21. 21. Questions?Cliff BrewisSenior Director OperationsMcGraw-Hill Construction/Dodge510-566-0913cliff_brewis@mcgraw-hill.com
  22. 22. AppendixNational numbers
  23. 23. U.S. Total Construction Starts for 2012Billions of Dollars 2007 2008 2009 2010 2011 2012Total Construction 641.0 556.8 425.9 428.6 409.8 411.8 -7% -13% -24% +1% -4% -0- 100.8 81.4 47.1 41.3 43.9 47.4Commercial Bldgs. +9% -19% -42% -12% +6% +8% 117.7 130.6 112.0 109.7 93.6 92.1Institutional Bldgs. +6% +11% -14% -2% -15% -2% 20.8 31.0 9.7 9.2 12.4 12.9Manufacturing Bldgs. +51% +49% -69% -5% +35% +4% 201.2 122.4 94.3 100.0 94.7 104.6Single Family Housing -26% -39% -23% +6% -5% +10% 60.3 38.2 17.9 21.0 23.6 28.0Multifamily Housing -13% -37% -53% +17% +13% +18% 121.3 121.1 123.6 119.0 99.6 94.8Public Works +8% -0- +2% -4% -16% -5% 19.0 31.9 21.2 28.5 42.0 32.0Electric Utilities +7% +68% -34% +34% +48% -24%
  24. 24. Risks to the Forecast Baseline Forecast Recession Forecast 2011 2012 2011 2012Total Construction -4% -0- -5% -7%Commercial Bldgs. +6% +8% +5% -6%Institutional Bldgs. -15% -2% -15% -3%Manufacturing Bldgs. +35% +4% +30% -5%Single Family Housing -5% +10% -6% -2%Multifamily Housing +13% +18% +12% -5%Public Works -16% -5% -17% -7%Electric Utilities +48% -24% +45% -35%

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