2018 michigan forecast in a global context · pdf file2018 michigan forecast in a global...

2018 Michigan Forecast in a Global ContextJanuary 12, 2018Detroit Athletic Club, Detroit, Michigan
Dr. Walter KemmsiesChief StrategistJLL Ports Airports and Global Infrastructure

2017 Jones Lang LaSalle IP, Inc. All rights reserved. 2
Global firm and capabilities overview
890 Strategic Consultants: balancing long-term strategy with practical execution
4,560 Transaction Specialists: best portfolio results through local market expertise and action
640 Lease Administrators: portfolio transparency eliminates business risk
4,400 Project Managers: fast, flexible and on-time delivery
25,120 Facility Management staff: safe, reliable, expert and productive work environments
Diverse services and locations deliver investment grade ratings: Moodys: Baa2 (positive outlook) S&P: BBB+ (stable outlook)Committed to environmental sustainability for clients: $47,000,000 year-end energy
savings 278k metric tons reduced
greenhouse gas emissions
companyOnly real estate firm listed nine years running
Fortune Worlds Most Admired Companies
list - 2015
Recognition for the fifth
consecutive year
2009-2016 Global outsourcing 100 list

Agenda
Positive U.S. economic outlook but neutral for autos and housing
Unbalanced investment in freight corridors results in congestion and ecommerce
U.S. could increase exports via restructuring trade agreements and investing in and repurposing infrastructure

Synchronized global growthfinallyReal GDP growth of major economies
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
India
China
US
Brazil
Mexico
Eurozone
Japan
Source: IMF, JLL

Sales and imports of vehicles leveling off
Source: IMF, JLL
-
5
10
15
20
2002 2004 2006 2008 2010 2012 2014 2016
Uni
ts (M
illio
n)
-
5
10
15
20
2002 2004 2006 2008 2010 2012 2014 2016
Uni
ts (M
illio
n)
Domestic Land-Based Sea-Based
U.S. retail sales
U.S. retail sales by source

The global automobile market continues to grow
0
10
20
30
40
50
60
70
80
90
100
2009 2010 2011 2012 2013 2014 2015 2016 2017
Hundreds of Million People Million Vehicles
Global population and vehicle sales
Chart1
Million Vehicles40178405434090841274416394200442369427354310060.4568.59999999999999471.7376.1377.8781.06999999999999383.1687.6990.05
Chart2
Hundreds of Million People40178405434090841274416394200442369427354310067.88203577999999568.66054280999999569.43437437999999470.20760224999999470.98495230999999771.76023055000000372.53260111999999573.30119639000000174.065212160000002Million Vehicles40178405434090841274416394200442369427354310060.4568.59999999999999471.7376.1377.8781.06999999999999383.1687.6990.05
Sheet1
Million VehiclesHundreds of Million People
200960.4567.96,788,203,57868
201068.668.76,866,054,281
201171.7369.46,943,437,438
201276.1370.27,020,760,225
201377.8771.07,098,495,231
201481.0771.87,176,023,055
201583.1672.57,253,260,112
201687.6973.37,330,119,639
201790.0574.17,406,521,216
Hundreds of Million People40178405434090841274416394200442369427354310067.88203577999999568.66054280999999569.43437437999999470.20760224999999470.98495230999999771.76023055000000372.53260111999999573.30119639000000174.065212160000002Million Vehicles40178405434090841274416394200442369427354310060.4568.59999999999999471.7376.1377.8781.06999999999999383.1687.6990.05

Production and exports could continue to grow slowly
Source: IMF, JLL
U.S. vehicle production
- 2 4 6 8
10 12 14
2002 2004 2006 2008 2010 2012 2014 2016
Uni
ts (M
illio
n)
Autos Light Trucks
- 2 4 6 8
10 12 14
2002 2004 2006 2008 2010 2012 2014 2016
Uni
ts (M
illio
n)
Production Exports
U.S. vehicle production and exports

U.S. imports roughly 2M autos per year from Mexico
Source: IMF, JLL
Total production & exports Exports by OEM to U.S. 2016
0.0
1.0
2.0
3.0
4.0
1990 1995 2000 2005 2010 2015
Mill
ions
Production Exports
505,543
430,127
398,456
362,508
238,834
159,060
129,640
89,413
66,467
GENERAL MOTORS
FCA MEXICO
NISSAN
FORD
VOLKSWAGEN
HONDA
TOYOTA
KIA
MAZDA

Autonomy is not here yet but much closer than most realize
Building blocks of automation
2010 2015 2020 2025 2030
Self-driving only
Fullself-driving
Limitedself-driving
Partial autonomy
Adaptive cruise control
Autonomous braking
ACC & LKA
Park assist
Auto pilot: traffic jam
Auto pilot: highway
Auto pilot: parking
Auto pilot: road train
Self driving & human-driven car
Self driving only
Source: WWL

Distribution of population ages is widening
Source: Census Bureau , Kemmsies
Proportion of population over 55 years of age
Typical maturing developed economies
Highest growth potential economies
0%
10%
20%
30%
40%
50%
60%
1990 2000 2010 2020 2030 2040 2050
Japan
Europe
China
Canada
US
Brazil
Mexico
India

International labor cost comparisons then and now
Source: Government statistics agencies, Trading Economics. JLL
Local manufacturing wages converted into us$ at prevailing exchange rates in 2001 and 2016
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000

Trade growth trends underlie global economic growth
Source: WTO, JLL
World real GDP and trade indexes 1950-2015e
Japan, Brazil
Korea, Taiwan
China
0
10
20
30
40
50
60
70
80
90
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
Volu
me
Inde
x
GDP Total Agriculture Fuels & Mining Manufactured
1950 - 2015 CAGR Relative to GDP growthGDP 3.7% 1.0
Manufactured goods 7.0% 1.9
Fuels and mining products 3.8% 1.0
Agricultural goods 3.5% 1.0
Total trade 5.8% 1.6
Trade growth drivers
Technology
Infrastructure
Resource constraints
Trade agreements
Demographics
Trade growth

Ship sizes increased to accommodate global trade growth
Evolution of containership size
Source: Alphaliner, World Shipping Council

Panama Canal expansion
Source: JLL Research

Accommodating larger vessels

San Pedro Harbor conversion of LAXT

Roadway congestion is getting worse and ecommerce is growing
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
200
400
600
800
1,000
1,200
1,400
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Share of Total
$ B
illio
nsEcommerce Share (right axis) E-commerce Total
2020 congestion forecasts, with trucks Ecommerce vs total retail sales

Inland hubs are becoming more numerous
Source: JLL Research

Michigan cross-border trade is forecast to double from 2009
Michigan Cross-Border Freight Tonnage, 2009 (millions) Change in Cross-Border Freight Tonnage, 20092030 (millions)

Inventory-to-sales ratio is structurally different
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

2018 michigan forecast in a global context · pdf file2018 michigan forecast in a global...

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