Construction Charts from National Association of Pipe Fabricators Annual Meeting Feb 2014

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Business & Mgmt

Published on March 17, 2014

Author: BernieMarkstein

Source: slideshare.net

Description

Charts from a presentation I made to the National Association of Pipe Fabricators (NAPF) Annual Meeting Feb 28, 2014 on the outlook for construction with an emphasis on residential and water & sewer

NAPF Annual Meeting February 28, 2014

Outlook for the Economy and Construction Presented by: Bernard M. Markstein Reed U.S. Chief Economist

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Outlook for the Economy and Construction 7 The U.S. Economy

Outlook for the Economy and Construction 8 State of the U.S. Economy  Economy improving, but weather muddles the numbers. What is really going on?  Employment growing, but should be faster  Inflation moderate (too low?)  The Fed has started to taper  Housing/residential construction a positive

Outlook for the Economy and Construction 9 Risks to the Economy  The Fed and interest rates  Significant cuts in government spending in the near term  Europe  European government debt default  The euro  Energy (oil) prices

Outlook for the Economy and Construction 10 -40 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 3-Month Moving Average, Year-over-Year % Change Reed Total Starts (3-Mo MA YoY) Source: Reed Construction Data

Outlook for the Economy and Construction 11 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 15 Residential Nonresidential Building Heavy Construction $ Billions History Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Forecast Forecast: Construction to improve Construction Spending and its Components

Outlook for the Economy and Construction 12 Residential construction is recovering, but from a low level  Single-family housing market is on the mend, but much further to go before it is back to normal  Multifamily market has largely recovered, but still some room for growth

Outlook for the Economy and Construction 13 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 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) Total Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau

Outlook for the Economy and Construction 14 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 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) Single-Family Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau

Outlook for the Economy and Construction 15 0 50 100 150 200 250 300 350 400 450 500 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 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) Multifamily Housing Starts (3-Month Moving Average) Source: U.S. Census Bureau

Outlook for the Economy and Construction 16 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 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 (3-Month Moving Average) Source: U.S. Census -Bureau

Outlook for the Economy and Construction 17 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 3-Month Moving Average, Year-over-Year % Change Reed Residential Starts (3-Mo MA YoY) Source: Reed Construction Data

Outlook for the Economy and Construction 18 0 100 200 300 400 500 600 700 800 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Improvements Single-family Multifamily $ Billions Residential Spending Components Source: History – U.S. Census Bureau; Forecast – Reed Construction Data History Forecast

Outlook for the Economy and Construction 19 0 50 100 150 200 250 300 350 400 450 Single-Family Multifamily Improvements $ Billions 2006 to 2013 ’14 ’15 Residential Construction Spending Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

Outlook for the Economy and Construction 20 Nonresidential Building Construction

Outlook for the Economy and Construction 21 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 3-Month Moving Average, Year-over-Year % Change Reed Nonresidential Starts (3-Mo MA YoY) Source: Reed Construction Data

Outlook for the Economy and Construction 22 275 269 283 302 340 404 438 376 290 284 298 299 317 343 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 $ Billions History Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Forecast Nonresidential Construction Spending

Outlook for the Economy and Construction 23 Heavy engineering

Outlook for the Economy and Construction 24 Reed Heavy Engineering Starts (3-Mo MA YoY) Source: Reed Construction Data -40 -30 -20 -10 0 10 20 30 40 50 60 3-Month Moving Average, Year-over-Year % Change

Outlook for the Economy and Construction 25 171 171 169 185 208 248 272 274 265 251 272 263 278 300 0 50 100 150 200 250 300 350 400 02 03 04 05 06 07 08 09 10 11 12 13 14 15 $ Billions History Source: History – U.S. Census Bureau; Forecast – Reed Construction Data Forecast Heavy Engineering Construction Spending

Outlook for the Economy and Construction 26 0 10 20 30 40 50 60 70 80 90 100 110 120 Transportation Communication Power $ Billions 2006 to 2013 ’14 ’15 Heavy Engineering Construction Spending Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

Outlook for the Economy and Construction 27 0 10 20 30 40 50 60 70 80 90 100 Highway Water and Sewer Conservation $ Billions 2006 to 2013 ’14 ’15 Heavy Engineering Construction Spending Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

Outlook for the Economy and Construction 28 Regional economic performance

Outlook for the Economy and Construction 29Source: Philadelphia Federal Reserve Bank

Outlook for the Economy and Construction 30Source: Philadelphia Federal Reserve Bank

Outlook for the Economy and Construction 31 Connect with Reed Construction Data  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

Outlook for the Economy and Construction 32 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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