2008 McGraw-Hill Construction Outlook Cliff Brewis Senior Director Editorial McGraw-Hill...
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2008 McGraw-Hill Construction Outlook Cliff Brewis Senior Director Editorial McGraw-Hill Construction
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Transcript of 2008 McGraw-Hill Construction Outlook Cliff Brewis Senior Director Editorial McGraw-Hill...
2008 McGraw-Hill Construction Outlook
Cliff Brewis
Senior Director Editorial McGraw-Hill Construction
2
U.S. Macroeconomic Picture
Price of Oil
10
20
30
40
50
60
70
80
90
01 02 03 04 05 06 07 08
Dollars per Barrel, West Texas Crude
Real GDP Growth - Quarterly
-4
-2
0
2
4
6
8
01 02 03 04 05 06 07 08
Annualized Percent Change '07 Q4
+0.6%
Change in Employment
-300
-150
0
150
300
450
01 02 03 04 05 06 07 08
Thousands of Workers
2007
95 K /mo. 2006
175 K /mo.
Jan. '08-17 K
Consumer Price Index
0
1
2
3
4
5
01 02 03 04 05 06 07 08
Percent Change, Year-over-Year
CPI
Core CPI
3
Default Rates
Source: Mortgage Bankers’ Association
2.48% to 3.47% Over 3.47%
Under 2.47%
Seriously Delinquent Rate, Q4
4
U.S. Macroeconomic PictureTighter lending standards are a major constraint for 2008.
-30
-15
0
15
30
45
60
75
90
90 92 94 96 98 00 02 04 06 08
Survey of Bank Lending Officers Percent Reporting Tighter Lending Standards --
Commercial Real Estate Loans
-30
-15
0
15
30
45
60
75
90
90 92 94 96 98 00 02 04 06 08
Survey of Bank Lending Officers Percent Reporting Tighter Lending Standards --
Commercial and Industrial Loans
5
World Growth Remains Strong
0
2
4
6
8
US Canada Eurozone Japan Other Asia Latin America
2004 2005 2006 2007 2008 2009
Source: Global Insight and S&P
Real GDP, % change
6
Points of Perspective -- U.S. Construction
80
100
120
140
160
180
200
T T+2 T+4 T+6 T+8 T+10 T+12 T+14 T+16
1982-91
1991- 2005
1975-82
Cyclical Trough (T) = 100, Based on Constant Dollars
Years from Cyclical Trough
Total Construction by Cycle
1991-2008
7
Major U.S. Construction Sectors (Starts)
50
125
200
275
350
90 92 94 96 98 00 02 04 06 08
Single Family Housing 2006
-14% 2007
-26%Billions of Dollars
20
40
60
80
100
120
90 92 94 96 98 00 02 04 06 08
Commercial Building Construction Starts
2006
+27% 2007
+7%Billions of Dollars
20
40
60
80
100
120
90 92 94 96 98 00 02 04 06 08
Institutional Building Construction Starts
2006
+10% 2007
+5%Billions of Dollars
40
60
80
100
120
140
90 92 94 96 98 00 02 04 06 08
Public Works 2006
+17% 2007
+6%Billions of Dollars
8
U.S. Single Family Housing
700
900
1,100
1,300
1,500
1,700
86 88 90 92 94 96 98 00 02 04 06 08
Single Family HousingThousands of Dwelling Units
New Home Prices
-2
02
4
6
810
12
14
90 92 94 96 98 00 02 04 06 08
Percent Change, Based on Median Price
2007 +0.2%
Mortgage Rates - Weekly
5
6
7
8
9
10
11
90 92 94 96 98 00 02 04 06 08
Percent
Supply of Single Family Housing
2
4
6
8
10
90 92 94 96 98 00 02 04 06 08
Number of Months
9
Default Rates
Source: Mortgage Bankers’ Association
2.48% to 3.47% Over 3.47%
Under 2.47%
Seriously Delinquent Rate, Q4
10
U.S. Multifamily Housing
0
200
400
600
800
1,000
86 88 90 92 94 96 98 00 02 04 06 08
Multifamily HousingThousands of Dwelling Units
11
U.S. Multifamily Housing
Top 10 Metros -- ranked by new dwelling units
Year 2007, %ch 07/06
1. New York -35%
2. Chicago -21%
3. Atlanta -1%
4. Seattle +18%
5. Miami -51%
6. Orlando FL -6%
7. Washington DC -19%
8. Houston +14%
9. Los Angeles -42%
10. Boston -8%
Year 2006, %ch 06/05
1. New York -1%
2. Miami -22%
3. Chicago +32%
4. Los Angeles +23%
5. Dallas-Ft.Worth +28%
6. Washington DC -20%
7. Atlanta -20%
8. Orlando FL +21%
9. Seattle +39%
10. Houston -6%
12
U.S. Commercial Bldgs. -- Stores
100
150
200
250
300
350
86 88 90 92 94 96 98 00 02 04 06 08
Stores and Shopping CentersMillions of Square Feet
13
Borrowing Against Your Home
$0
$100
$200
$300
$400
$500
$600
$700
1994 1996 1998 2000 2002 2004 2006 2008
Home equity cashed out Home equity loans
Source: Freddie Mac
14
U.S. Commercial Bldgs.-- Hotels
10
30
50
70
90
110
86 88 90 92 94 96 98 00 02 04 06 08
HotelsMillions of Square Feet
15
U.S. Commercial Bldgs. -- HotelsTop 10 Metros -- ranked by new square feet
Year 2006, %ch 06/05
1. Las Vegas +866%
2. Atlantic City +++%
3. San Diego +228%
4. Phoenix +531%
5. Dallas-Ft. Worth +116%
6. New York +45%
7. Los Angeles +136%
8. Chicago +35%
9. New London CT +++%
10. Miami +58%
Year 2007, %ch 07/06
1. Las Vegas -65%
2. Orlando +190%
3. Los Angeles +35%
4. Chicago +26%
5. Washington DC +132%
6. New York -5%
7. San Antonio +201%
8. Atlanta +65%
9. Phoenix -33%
10. Dallas-Ft. Worth -35%
16
U.S. Commercial Bldgs. -- Offices
50
125
200
275
350
425
86 88 90 92 94 96 98 00 02 04 06 08
Office BuildingsMillions of Square Feet
17
U.S. Commercial Bldgs. -- Offices Office Building Factors
0
5
10
15
20
25
86 88 90 92 94 96 98 00 02 04 06 08
Downtown
Suburban
U.S. Office Vacancy Rates Source: CB Richard Ellis
Change in Office Employment
-750
-500
-250
0
250
500
750
1,000
1,250
86 88 90 92 94 96 98 00 02 04 06 08
Thousands of Workers
18
U.S. Commercial Bldgs. -- OfficesTop 10 Metros -- ranked by new square feet
Year 2006, %ch 06/05
1. Washington DC +29%
2. New York +62%
3. Dallas-Ft. Worth +33%
4. Phoenix -12%
5. Miami +17%
6. Chicago +157%
7. Atlanta +27%
8. Houston +50%
9. Los Angeles -2%
10. Seattle +335%
Year 2007, %ch 07/06
1. Phoenix +24%
2. Washington DC -19%
3. Atlanta +36%
4. Chicago +24%
5. Miami +17%
6. Dallas-Ft. Worth -31%
7. Houston -4%
8. Seattle -7%
9. Charlotte NC +82%
10. New York -49%
19
U.S. Macroeconomic Picture
State & Local Governments
0
2
4
6
8
10
12
90 92 94 96 98 00 02 04 06 08
Year-End Balance, Percent of Expenditures
Federal Budget Surplus/ Deficit
-500
-400
-300
-200
-100
0
100
200
300
90 92 94 96 98 00 02 04 06 08
Billions of Dollars, 2007 -- CBO Projections
20
U.S. Institutional -- Educational Bldgs.
2006 2007 YTD
Primary, Jr. Highs +1% -7%
High Schools +15% -6%
Colleges/Univ. +6% +5%
Libraries -1% -7%
Laboratories -24% +20%
Museums +2% -7%
Comm. Colleges +43% -12%
Vocational Schools +35% -50%50
100
150
200
250
300
86 88 90 92 94 96 98 00 02 04 06 08
Educational BuildingsMillions of Square Feet
21
U.S. Institutional -- Educational Bldgs.
Student Enrollments, Grades K-8
30
33
36
39
42
45
1985 1990 1995 2000 2005 2010 2015
Millions of StudentsU.S. Higher Education Enrollments
10
12
14
16
18
20
22
1985 1990 1995 2000 2005 2010 2015
Millions of Students
Student Enrollments, Grades 9-12
10
12
14
16
18
1985 1990 1995 2000 2005 2010 2015
Millions of Students
22
Educational BuildingsTop 10 States -- ranked by sq. ft. of new starts
Year 2007 YTD, %ch 07/06
1. Texas +2%
2. Florida -1%
3. Georgia +33%
4. California -12%
5. North Carolina +3%
6. Ohio -33%
7. Pennsylvania -27%
8. Illinois +2%
9. New York +9%
10. Arizona -12%
Year 2006, %ch 06/05
1. Texas +5%
2. Florida +22%
3. California +12%
4. Ohio +18%
5. Pennsylvania +61%
6. Georgia -4%
7. North Carolina +8%
8. Illinois +2%
9. Virginia +31%
10. Arizona +63%
U.S. Institutional -- Educational Bldgs.
23
U.S. Institutional -- Healthcare Buildings
Healthcare Facilities
0
15
30
45
60
75
90
86 88 90 92 94 96 98 00 02 04 06 08
Millions of Square Feet
Hospitals
Clinics
24
Year 2007 YTD, %ch 07/06
1. California +32%
2. Florida -31%
3. Texas -42%
4. Ohio -1%
5. Indiana -4%
6. Illinois -4%
7. Michigan -6%
8. Arizona -3%
9. Tennessee +24%
10. Washington +16%
Year 2006, %ch 06/05
1. Texas +40%
2. Florida +7%
3. California -6%
4. Indiana +50%
5. New York +49%
6. Ohio -38%
7. Pennsylvania -3%
8. Illinois -1%
9. Michigan -4%
10. Maryland +190%
U.S. Institutional – Healthcare Bldgs.Healthcare Buildings
Top 10 States -- ranked by sq. ft. of new starts
25
U.S. Institutional Buildings
0
15
30
45
60
75
86 88 90 92 94 96 98 00 02 04 06 08
Public BuildingsMillions of Squaare Feet
15
35
55
75
95
115
86 88 90 92 94 96 98 00 02 04 06 08
Amusement & Rec. BuildingsMillions of Squaare Feet
26
U.S. Institutional Buildings
Airport Terminals
0.0
2.0
4.0
6.0
8.0
10.0
84 86 88 90 92 94 96 98 00 02 04 06 08
Millions of Sq. Ft.Religious Buildings
10
20
30
40
50
60
84 86 88 90 92 94 96 98 00 02 04 06 08
Millions of Sq. Ft.
27
U.S. Manufacturing Buildings
0
50
100
150
200
250
86 88 90 92 94 96 98 00 02 04 06 08
Manufacturing BuildingsMillions of Square Feet
Capacity Utilization
71
74
77
80
83
86
89
90 92 94 96 98 00 02 04 06 08
Percent
28
U.S. Public Works -- Highways & Bridges
Highways and Bridges
10
20
30
40
50
60
86 88 90 92 94 96 98 00 02 04 06 08
Billions of Dollars
29
U.S. Public Works -- Environmental
Sewers, Dams/ Water Resources
0
3
6
9
12
15
18
86 88 90 92 94 96 98 00 02 04 06 08
Billions of Dollars
Dams, Water Resources
Sewers
Water Resources
Water Supply Systems
0
3
6
9
12
15
86 88 90 92 94 96 98 00 02 04 06 08
Billions of Dollars
30
U.S. Total Construction Starts for 2008Billions of Dollars 2004 2005 2006 2007 2008
Total Construction 593.2 670.2 684.7 625.4 579.0 +12% +13% +2% -9% -7%
Single Family Housing 282.7 315.5 272.4 201.4 169.3+17% +12% -14% -26% -16%
Multifamily Housing 50.5 68.7 69.9 62.1 53.1+23% +36% +2% -11% -14%
Commercial Bldgs. 67.3 72.3 91.9 97.9 91.6+14% +7% +27% +7% -6%
Institutional Bldgs. 89.1 99.9 109.9 115.3 117.6 -1% +12% +10% +5% +2%
Manufacturing Bldgs. 8.0 10.1 13.4 16.6 15.0 +17% +26% +33% +23% -10%
Public Works 88.2 95.9 112.4 119.3 120.0 +6% +9% +17% +6% +1%
Electric Utilities 7.3 7.8 14.7 12.8 12.4-18% +6% +89% -13% -3%
