The document provides an overview and outlook for construction activity in the United States and New York metropolitan area for 2010. It summarizes key economic indicators such as GDP growth and unemployment rates. It also discusses the impact of government stimulus programs on construction spending. Overall construction activity is expected to increase modestly in the US and NY metro area in 2010 from steep declines in 2009, with gains in public works, residential, and institutional building sectors.

1. 2010 Outlook for Construction Activity -- U.S. and New York Metropolitan Area Robert Murray Vice President, Economic Affairs McGraw-Hill Construction New York, NY -- June 2, 2010

3. U.S. Macroeconomic Picture The U.S. has been in recession since Dec. 2007. Recovery now emerging. GDP Pattern: History Forecast 2007 2008 2009 2010 +2.1% +0.4% -2.4% +3.0% What shape will the recovery be? V or U or L or W ? (Still probably U-shaped, but the V-shape possibility gaining some momentum.)

4. U.S. Macroeconomic Picture The job losses have slowed over the past year. Job rebound seems to be taking hold. March 2010 now up 230,000 and April 2010 up 290,000.

5. U.S. Macroeconomic Picture Inflation in check for now; oil prices have stabilized.

6. U.S. Macroeconomic Picture Short-term rates very low; long term rates seem to have leveled off. Since Dec. 2008, the federal funds funds rate target set at 0% to .25%. Numerous steps taken to improve liquidity were taken by Federal Reserve over the course of 2008 and 2009. Federal Reserve ended its purchase of mortgage securities at end of March – long-term interest rates have stayed low to this point.

7. U.S. Macroeconomic Picture Building material prices down, but starting to edge up, particularly metals.

8. U.S. Macroeconomic Picture

13. U.S. Macroeconomic Picture Tighter lending standards are still a major constraint for 2010. Modest “plus” - rate of tightening now settling back. Numerous instances of tight credit affecting large projects, such as Echelon Resort in Las Vegas Chicago Spire World Trade Center Towers 2, 3 A few emerging signs of “improvement” … Oct. 30 – Federal bank regulators issue guidelines on commercial real estate loans A few “positive” reports.

16. U.S. Construction Market Indicators The decline for Total Construction grew steeper in 2009 .

17. Major U.S. Construction Sectors (Starts) Single Family now edging up; Commercial Building still declining; Institutional Bldg. slipping; Public Works set to turn up.

18. U.S. Total Construction Starts for 2010 Billions of Dollars 2006 2007 2008 2009 2010 Total Construction 689.4 641.7 552.9 416.5 457.7 +3% -7% -14% -25% +10% Single Family Housing 272.4 201.2 122.4 94.3 121.4 -14% -26% -39% -23% +29% Multifamily Housing 69.8 61.1 39.1 17.4 19.2 +2% -12% -36% -56% +10% Commercial Bldgs. 92.9 100.9 80.6 45.6 43.1 +29% +9% -20% -43% -5% Institutional Bldgs. 110.7 117.7 129.3 109.4 110.9 +11% +6% +10% -15% +1% Manufacturing Bldgs. 13.5 20.8 29.5 10.0 8.2 +33% +53% +42% -66% -18% Public Works 112.5 121.2 120.8 120.5 137.6 +17% +8% -0- -0- +14% Electric Utilities 17.7 18.8 31.3 19.3 17.3 +125% +7% +66% -38% -10%

19. New York City Metro Area Comparing the pattern of total construction to the U.S. Year 2009 NYC Metro Tot al Construction and Major Sector %ch 09/08 Total Const. -19% Single Family -29% Multifamily -57% Commercial -7% Inst. Bldgs. +20% Mfg. Bldgs. -30% Public Works -25% Electric Util. +63%

22. New York City Metro Area Single family Housing dropped 63% from 2005 peak; now edging upward. Multifamily Housing dropped 64% from 2006 peak.

23. New York City Metro – Recent Large Projects Multifamily Housing

24. U.S. Multifamily Housing Multifamily Housing Top 10 Metros -- ranked by dollars Year 2009, %ch 09/08 1. New York -57% 2. Chicago -40% 3. Washington DC -66% 4. Dallas- Ft.Worth -55% 5. Seattle -52% 6. Boston -45% 7. Houston -53% 8. Los Angeles -81% 9. San Francisco -64% 10. Miami -67% Year 2008, %ch 08/07 1. New York -3% 2. Los Angeles -34% 3. Washington DC -23% 4. Chicago -51% 5. Atlanta -46% 6. Dallas- Ft.Worth -16% 7. Seattle -51% 8. San Francisco -5% 9. Miami -60% 10. Houston -44%

25. New York City Metro Area Stores and Warehouses fell sharply in 2009, as did Hotels

26. New York City Metro – Recent Large Projects Stores and Warehouses

27. New York City Metro – Recent Large Projects Hotels

28. New York City Metro Area Office construction decline has been uneven since 2006 peak.

29. New York City Metro – Recent Large Projects Offices

30. New York City Metro Area Educational Buildings slipping, with some exceptions.

31. New York City Metro – Recent Large Projects Educational Buildings

32. New York City Metro Area Healthcare Facilities lost momentum in 2009.

33. New York City Metro – Recent Large Projects Healthcare Facilities

34. New York City Metro Area Public Buildings climbed sharply in 2009.

35. New York City Metro – Recent Large Projects Public Buildings

36. New York City Metro Area Amusement-related projects, Transportation Terminals have shown recent strength.

37. New York City Metro – Recent Large Projects Amusement & Rec. Buildings

38. New York City Metro – Recent Large Projects Transportation Terminals

40. New York City Metro – Recent Large Projects Highways, Bridges, Rail-related

41. New York City Metro Area Environmental-related Public Works had exceptional 2008.

42. New York City Metro – Recent Large Projects Environmental Public Works

43. New York City Metro Area Electric Utilities has shown recent volatility.

44. New York City Metro Total Construction Starts for 2010 Billions of Dollars 2006 2007 2008 2009 2010 Total Construction 33.755 34.347 31.242 25.313 28.245 +17% +2% -9% -19% +12% Single Family Housing 4.277 3.473 2.604 1.839 2.025 -13% -19% -25% -29% +10% Multifamily Housing 8.345 7.417 7.184 3.073 2.980 +18% -11% -3% -57% -3% Commercial Bldgs. 7.396 6.182 4.377 4.082 3.550 +97% -16% -29% -7% -13% Institutional Bldgs. 5.637 7.460 6.671 7.997 10.570 -9% +32% -11% +20% +32% Manufacturing Bldgs. .144 .492 .092 .064 .065 +84% +241% -81% -30% +2% Public Works 7.188 8.336 9.759 7.353 8.325 +10% +16% +17% -25% +13% Electric Utilities .768 .986 .555 .904 .730 +235% +29% -44% +63% -19%