2016 outlook for economy & construction markstein hays webinar_may 4, 2016
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2016 Economic and Construction Outlook Presented by: Bernard M. Markstein, Ph.D. Markstein Advisors HAYS Webinar May 4, 2016
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Transcript of 2016 outlook for economy & construction markstein hays webinar_may 4, 2016
2016 Economic and
Construction Outlook
Presented by:
Bernard M. Markstein, Ph.D.
Markstein Advisors
HAYS Webinar
May 4, 2016
Markstein Advisors2
The U.S.
Economy
Markstein Advisors3
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
Markstein Advisors4
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
Markstein Advisors5
100
105
110
115
120
125
130
135
140
145
150
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Millions
143.5 M
Total Nonfarm Employment (SA)(3-Month Moving Average)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors6
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Millions
6.64 M
Peak, April & May 2001
6.85
Total Construction Employment (SA)(3-Month Moving Average)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors7
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
300
400
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Thousands
209k
Total Nonfarm Employment (SA)(Monthly Change)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors8
-150
-125
-100
-75
-50
-25
0
25
50
75
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Thousands
25k
Total Construction Employment (SA)(Monthly Change)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors9
-6
-5
-4
-3
-2
-1
0
1
2
3
4
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Percent
2.0%
Total Nonfarm Employment(Year-over-year Percent Change)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors10
-20
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Percent
4.9%
Total Construction Employment(Year-over-year Percent Change)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors11
0
1
2
3
4
5
6
7
8
9
10
11
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Percent
5.0%
Total Unemployment Rate (SA)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors12
0
1
2
3
4
5
6
7
8
9
10
11
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Percent
5.1%
Total Unemployment Rate (NSA)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors13
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Percent
8.7%
Construction Unemployment Rate (NSA)
Source: U.S. Bureau of Labor Statistics
Shaded areas represent recession
Overview of the Economy
Markstein Advisors14
Construction
Overview
Markstein Advisors15
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 ContinuesConstruction Spending and its Components
Overview of Construction
Markstein Advisors16
Residential
Construction
Markstein Advisors17
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
Markstein Advisors18
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
Markstein Advisors19
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
Markstein Advisors20
402
451
538
618 620
500
367
256 252 253276
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
Residential Construction
Markstein Advisors21
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
Residential Construction
Markstein Advisors22
Nonresidential
Building
Construction
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275 269283
302
340
404
439
377
292 284301 303
330
386407
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
Markstein Advisors24
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
Markstein Advisors25
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
Markstein Advisors26
Heavy Engineering
Construction
Markstein Advisors27
171 171 169185
208
248
272 274265
251
274 274288 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
Source: History – U.S. Census Bureau; Forecast – Markstein Advisors
Forecast
Heavy Engineering Construction Spending
Heavy Engineering Construction
Markstein Advisors28
Contact Info and Links
Bernard M. Markstein
Office: 301-588-5190
www.linkedin.com/in/markstein3
@BMarkstein
