Reed fall econ webcast oct 17, 2013 markstein_part 2

Commercial construction

turned around in 2012

and is expected to

continue to improve

Construction spending and its components

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 Forecast

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

Reed total starts (3-month moving average year-over-year)

Source: Reed Construction Data

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

35

40

45

3-Month Moving Average, Year-over-Year % Change

Total construction spending

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

700

750

800

850

900

950

1,000

1,050

1,100

1,150

1,200

1,250

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Billion $, SAAR

Residential

construction

continues to

improve

Residential construction spending components

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

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

History Forecast

Reed residential starts (3-month moving average year-over-year)

Source: Reed Construction Data

-60

-50

-40

-30

-20

-10

0

10

20

30

40

503-Month Moving Average, Year-over-Year % Change

New residential construction spending

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

100

150

200

250

300

350

400

450

500

550

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Billion $, SAAR

Residential construction spending components

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

0

50

100

150

200

250

300

350

400

450

Single-Family Multifamily Improvements

2002 2003 2004 2005 2006

2007 2008 2009 2010 2011

2012 2013 2014 2015

$ Billions

Nonresidential building

construction has struggled

lately, but is expected to

improve over the remainder

of this year and strengthen

further in 2014 and 2015

Reed nonresidential building starts (3-month moving average year-over-year)

Source: Reed Construction Data

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

353-Month Moving Average, Year-over-Year % Change

Nonresidential construction spending

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

200

225

250

275

300

325

350

375

400

425

450

475

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Billion $, SAAR

Nonresidential spending components

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

0

10

20

30

40

50

60

70

80

90

100

Hotel/Lodging Office Commerical

2002 2003 2004 2005 2006

2007 2008 2009 2010 2011

2012 2013 2014 2015

$ Billions

Nonresidential spending components

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

0

10

20

30

40

50

60

70

80

90

100

110

Religious Healthcare Education

2002 2003 2004 2005 2006

2007 2008 2009 2010 2011

2012 2013 2014 2015

$ Billions

Nonresidential spending components

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

0

10

20

30

40

50

60

70

Public safety Amusement and recreation Manufacturing

2002 2003 2004 2005 2006

2007 2008 2009 2010 2011

2012 2013 2014 2015

$ Billions

Heavy engineering

(non-building)

construction held

up best over the

last few years

Despite considerable

challenges, the outlook

for heavy engineering

construction is fairly

positive

Reed heavy engineering starts (3-month moving average year-over-year)

Source: Reed Construction Data

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

70

80

90

3-Month Moving Average, Year-over-Year % Change

Heavy engineering construction spending

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

150

175

200

225

250

275

300

325

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Billion $, SAAR

Heavy engineering spending components

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

0

10

20

30

40

50

60

70

80

90

100

110

120

130

Transportation Communication Power

2002 2003 2004 2005 2006

2007 2008 2009 2010 2011

2012 2013 2014 2015

$ Billions

Heavy engineering spending components

Source: History – U.S. Census Bureau; Forecast – Reed Construction Data

0

10

20

30

40

50

60

70

80

90

100

110

Highway Water and Sewer Conservation

2002 2003 2004 2005 2006

2007 2008 2009 2010 2011

2012 2013 2014 2015

$ Billions

Regional

economic

performance

Economic performance of the states

Source: Philadelphia Federal Reserve Bank

Economic performance of the states

Source: Philadelphia Federal Reserve Bank

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Bernard M. Markstein

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