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May 7, 2014
2016 Economic and
Construction Outlook
Presented by:
Bernard M. Markstein, Ph.D.
Markstein Advisors
Mechanical...
Markstein Advisors
2
The U.S.
Economy
Markstein Advisors
3
 Economy growing, but should be better
 Employment growing, but should be faster
 Inflation remain...
Markstein Advisors
4
 Washington less of an obstacle, but how much real
cooperation are we seeing?
 China: slow(er) econ...
Markstein Advisors
5
Risks to the Economy
 Failure to pass needed legislation leads to reduced
federal government spendin...
Markstein Advisors
6
Construction
Overview
Markstein Advisors
7
0
200
400
600
800
1,000
1,200
1,400
1,600
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Residential...
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Residential
Construction
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0
250
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750
1,000
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1,750
2,000
2,250
2,500
2000 2001 2002 2003 2004 2005 2006 2007 2008 ...
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011...
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1,000
1,200
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1,600
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2,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2...
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402
451
538
618 620
500
367
256 252 253
276
329
375
425
461
532
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400
450...
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Single-Family Multifamily Improvements
$ Billions
2006 to 2015 ...
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Nonresidential
Building
Construction
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275 269
283
302
340
404
439
377
292 284
301 303
330
386
407
432
0
50
100
150
200
250
300
350
400
450...
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Hotel/Lodging Office Commercial
$ Billions
2006 to 2015 ’16...
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Manufacturing Healthcare Education
$ Billions
2006 to 2015 ...
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Heavy Engineering
Construction
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171 171 169
185
208
248
272 274
265
251
274 274
288 288
305
328
0
50
100
150
200
250
300
350
400
02 ...
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Contact Info and Links
Bernard M. Markstein
 Office: 301-588-5190
 bmarkstein@verizon.net
LinkedIn...
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2016 outlook for economy & construction markstein mcamw_may 2, 2016

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Charts for my presentation to the Mechanical Contractors Association of Metropolitan Washington on the outlook for the economy and construction

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2016 outlook for economy & construction markstein mcamw_may 2, 2016

  1. 1. May 7, 2014 2016 Economic and Construction Outlook Presented by: Bernard M. Markstein, Ph.D. Markstein Advisors Mechanical Contractors Association of Metropolitan Washington Bethesda North Marriott Bethesda, Maryland May 2, 2016
  2. 2. Markstein Advisors 2 The U.S. Economy
  3. 3. Markstein Advisors 3  Economy growing, but should be better  Employment growing, but should be faster  Inflation remains moderate  Federal Reserve raising interest rates: how high, how fast?  Strong dollar: pluses & minuses  Energy (oil) prices Overview of the Economy
  4. 4. Markstein Advisors 4  Washington less of an obstacle, but how much real cooperation are we seeing?  China: slow(er) economic growth impact on world economy  Europe showing signs of improvement Overview of the Economy
  5. 5. Markstein Advisors 5 Risks to the Economy  Failure to pass needed legislation leads to reduced federal government spending in the near term  China  EU – Brexit?  Energy (oil) prices  European government debt default (Greece)  The euro (UK/Greece)  Interest rates (the Fed)  Russia?
  6. 6. Markstein Advisors 6 Construction Overview
  7. 7. Markstein Advisors 7 0 200 400 600 800 1,000 1,200 1,400 1,600 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Residential Nonresidential Building Heavy Construction $ Billions History Source: History – U.S. Census Bureau; Forecast – Markstein Advisors Forecast Forecast: The Rebound Continues Construction Spending and its Components Overview of Construction
  8. 8. Markstein Advisors 8 Residential Construction
  9. 9. Markstein Advisors 9 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 2015 2016 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) 1.13 M Total Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau Shaded areas represent recession Overview of Housing
  10. 10. Markstein Advisors 10 0 50 100 150 200 250 300 350 400 450 500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 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) 341k Multifamily Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau Shaded areas represent recession Overview of Housing
  11. 11. Markstein Advisors 11 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 2015 2016 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) 792k Single-Family Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau Shaded areas represent recession Overview of Housing
  12. 12. Markstein Advisors 12 402 451 538 618 620 500 367 256 252 253 276 329 375 425 461 532 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 $ Billions History Forecast Source: History – U.S. Census Bureau; Forecast – Markstein Advisors Residential Construction Spending
  13. 13. Markstein Advisors 13 0 50 100 150 200 250 300 350 400 450 Single-Family Multifamily Improvements $ Billions 2006 to 2015 ’16 ’17 Residential Construction Spending Source: History – U.S. Census Bureau; Forecast – Markstein Advisors
  14. 14. Markstein Advisors 14 Nonresidential Building Construction
  15. 15. Markstein Advisors 15 275 269 283 302 340 404 439 377 292 284 301 303 330 386 407 432 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 16 17 $ Billions History Forecast Source: History – U.S. Census Bureau; Forecast – Markstein Advisors Nonresidential Construction Spending Nonresidential Construction
  16. 16. Markstein Advisors 16 0 10 20 30 40 50 60 70 80 90 100 110 120 Hotel/Lodging Office Commercial $ Billions 2006 to 2015 ’16 ’17 Nonresidential Construction Spending Source: History – U.S. Census Bureau; Forecast – Markstein Advisors Nonresidential Construction
  17. 17. Markstein Advisors 17 0 10 20 30 40 50 60 70 80 90 100 110 120 Manufacturing Healthcare Education $ Billions 2006 to 2015 ’16 ’17 Nonresidential Construction Spending Source: History – U.S. Census Bureau; Forecast – Markstein Advisors Nonresidential Construction
  18. 18. Markstein Advisors 18 Heavy Engineering Construction
  19. 19. Markstein Advisors 19 171 171 169 185 208 248 272 274 265 251 274 274 288 288 305 328 0 50 100 150 200 250 300 350 400 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 $ Billions History Forecast Source: History – U.S. Census Bureau; Forecast – Markstein Advisors Heavy Engineering Construction Spending Heavy Engineering Construction
  20. 20. Markstein Advisors 20 Contact Info and Links Bernard M. Markstein  Office: 301-588-5190  bmarkstein@verizon.net LinkedIn  www.linkedin.com/in/markstein3 Twitter  @BMarkstein

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