cliff brewis outlook 2012
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Senior Director, OperationsMcGraw-Hill Construction
Cliff Brewis
70
85
100
115
130
145
160
175
190
T T+2 T+4 T+6 T+8 T+10 T+12 T+14 T+16 T+18 T+20 T+22
1982-1991
1991- 2005
1975-1982
Cyclical Trough (T) = 100, Based on Constant 2000 Dollars
Years from Cyclical Trough
Total Construction Activity by Cycle
1991-2012
Where We Have Been
The Overall EconomyThe US Economy has upside limits and downside potential.
GDP Pattern:
History Forecast
2009 2010 2011 2012
-3.5% +3.0% +1.6% +2.0%
Major Inhibitors:– Intractable Housing
– Budget Deficit
– Unemployment/Demand
– Europe
-9
-7
-5
-3
-1
1
3
5
7
01 02 03 04 05 06 07 08 09 10 11 12
Real GDP Growth Quarterly “11Q2 +1.3%
Area of Concern: Public Construction Funding Pushing down on the economy
Federal Budget Surplus/DeficitBillions of Dollars, CBO Projections
-1,600
-1,400
-1,200
-1,000
-800
-600
-400
-200
0
200
400
90 92 94 96 98 00 02 04 06 08 10 12
State and Local Revenues
Significance Of Housing
100
120
140
160
180
200
220
01 02 03 04 05 06 07 08 09 10 11 12
S&P Case Shiller Home Price Index20-Metro Composite, Indexed: Jan. 2000 = 100
Best Indicator of Local Market Strength
Employment by State
California: Single Family
‘$000.00
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
California: Multi Family
‘$000.00
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
U.S. • Multifamily Housing Top 8 Metros – September YTD 2011 vs. 2010
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Miami-Fort Lauderdale
Los Angeles
Seattle
Chicago
Dallas
Boston
Washington DC
New York
2010 2011
+32%
+183%
+32%
+270%
+36%
+170%
+66%
+57%
Value in Billions
California: Retail/Warehouses
‘$000.00
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Retail
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Warehouses
California: Offices
‘$000.00
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
U.S. Commercial Buildings • OfficesTop 8 Metros – September YTD 2011 vs. 2010
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Seattle
Minneapolis-St. Paul
Chicago
Houston
Washington DC
Boston
Salt Lake City
New York
2010 2011
- 48%
+1200%
+134%
-52%
+143
+26%
+428%
+83%
Value in Billions
California: Healthcare
‘$000.00
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
California: Education
‘$000.00
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
U.S. Institutional • Educational BuildingsK-12 School Construction larger than Colleges/Universities/Community Colleges, particularly in sq. ft. terms, less so in dollar terms.
K-12 has typically shown steeper up-and-down swings.
• In 2010, dollars for K-12 school constructionwas 2.3 times the size of Colleges/Universities/Community Colleges
• In 2010, sq. ft for K-12 school construction was 3.6 times the size for Colleges/Universities/Community Colleges
Education Buildings - SegmentsBillions of Dollars
0
5
10
15
20
25
30
35
40
90 92 94 96 98 00 02 04 06 08 10 120
25
50
75
100
125
150
175
200
90 92 94 96 98 00 02 04 06 08 10 12
K-12 Schools
Colleges/Universities/
Community Colleges
Colleges/Universities/
Community Colleges
K-12 Schools
Education Buildings - SegmentsMillions of Sq. Ft.
U.S. Institutional • Educational BuildingsTop 5 States – September YTD 2011 vs. 2010
0.0 1.0 2.0 3.0 4.0 5.0
Ohio
Massachusetts
Texas
California
New York
2010 2011
-11%
-34%
-35%
+17%
-14%
Value in Billions
California: Public ex Schls
‘$000.00
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
California: Highways
‘$000.00
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
U.S. Public Works • Highways & BridgesTop 5 States – September YTD 2011 vs. 2010
0.0 1.0 2.0 3.0 4.0 5.0 6.0
Florida
Illinois
Washington
California
Texas
2010 2011
-35%
-29%
+112%
+2%
+24%
Value in Billions
California:
‘$000.00
Structure Type 2006 2007 2008 2009 2010 2011 2012EDUCATION $6,693,899 $5,624,163 $8,389,268 $4,243,638 $5,461,528 $3,652,842 $3,453,074
-16.0% 49.2% -49.4% 28.7% -33.1% -5.5%GOVT x schls $917,450 $901,991 $941,567 $1,651,554 $589,838 $1,109,676 $1,003,439
-1.7% 4.4% 75.4% -64.3% 88.1% -9.6%HEALTH $2,105,817 $3,128,049 $2,325,602 $2,953,438 $2,940,200 $3,164,533 $3,144,388
48.5% -25.7% 27.0% -0.4% 7.6% -0.6%HIGHWAY $3,586,689 $3,584,021 $4,135,368 $3,617,681 $3,578,835 $3,692,858 $3,639,106
-0.1% 15.4% -12.5% -1.1% 3.2% -1.5%HOTEL $1,268,243 $1,132,320 $544,434 $556,980 $114,601 $147,377 $220,710
-10.7% -51.9% 2.3% -79.4% 28.6% 49.8%MFG $694,380 $516,590 $512,135 $568,810 $257,108 $355,898 $420,674
-25.6% -0.9% 11.1% -54.8% 38.4% 18.2%MULTI RES $7,286,060 $5,458,202 $3,741,078 $963,068 $1,541,216 $1,523,600 $2,077,791
-25.1% -31.5% -74.3% 60.0% -1.1% 36.4%OFFICE $3,509,386 $3,359,340 $1,862,668 $1,462,696 $948,541 $780,430 $838,371
-4.3% -44.6% -21.5% -35.2% -17.7% 7.4%ONE FAMILY $25,689,625 $16,847,205 $8,882,785 $6,889,277 $7,167,967 $6,332,685 $6,686,356
-34.4% -47.3% -22.4% 4.0% -11.7% 5.6%RETAIL $2,185,000 $2,782,949 $2,013,468 $998,577 $936,040 $910,142 $1,022,755
27.4% -27.6% -50.4% -6.3% -2.8% 12.4%WAREHOUSE $1,409,346 $1,363,134 $1,214,879 $448,252 $217,810 $298,518 $408,937
-3.3% -10.9% -63.1% -51.4% 37.1% 37.0%WATER $1,716,305 $2,049,777 $2,004,652 $1,582,216 $1,684,722 $1,141,553 $1,155,952
19.4% -2.2% -21.1% 6.5% -32.2% 1.3%TOTAL $67,998,286 $59,244,698 $48,043,677 $35,672,178 $40,892,129 $42,431,483 $42,217,077
-12.9% -18.9% -25.8% 14.6% 3.8% -0.5%
Questions?
Cliff BrewisSenior Director OperationsMcGraw-Hill Construction/Dodge510-566-0913cliff_brewis@mcgraw-hill.com
Appendix
National numbers
Billions of Dollars 2007 2008 2009 2010 2011 2012
Total Construction 641.0-7%
556.8-13%
425.9-24%
428.6+1%
409.8-4%
411.8-0-
Commercial Bldgs. 100.8+9%
81.4-19%
47.1-42%
41.3-12%
43.9+6%
47.4+8%
Institutional Bldgs. 117.7+6%
130.6+11%
112.0-14%
109.7-2%
93.6-15%
92.1-2%
Manufacturing Bldgs. 20.8+51%
31.0+49%
9.7-69%
9.2-5%
12.4+35%
12.9+4%
Single Family Housing 201.2-26%
122.4-39%
94.3-23%
100.0+6%
94.7-5%
104.6+10%
Multifamily Housing 60.3-13%
38.2-37%
17.9-53%
21.0+17%
23.6+13%
28.0+18%
Public Works 121.3+8%
121.1-0-
123.6+2%
119.0-4%
99.6-16%
94.8-5%
Electric Utilities 19.0+7%
31.9+68%
21.2-34%
28.5+34%
42.0+48%
32.0-24%
U.S. Total Construction Starts for 2012
Baseline Forecast Recession Forecast
2011 2012 2011 2012
Total Construction -4% -0- -5% -7%
Commercial Bldgs. +6% +8% +5% -6%
Institutional Bldgs. -15% -2% -15% -3%
Manufacturing Bldgs. +35% +4% +30% -5%
Single Family Housing -5% +10% -6% -2%
Multifamily Housing +13% +18% +12% -5%
Public Works -16% -5% -17% -7%
Electric Utilities +48% -24% +45% -35%
Risks to the Forecast
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