honolulu’s construction industry: where is it...

Honolulus Construction Industry: Where is it Going?

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December 2015Introduction

Introduction Introduction of Rider Levett Bucknall National View Local View Quarterly Cost Reports (QCR) What Influences Construction Costs? 2015 and Beyond

December 2015

History

Rider Levett Bucknall employs over 3,500

staff in more than 150 offices worldwide

Introduction

December 2015

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Introduction

December 2015

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Introduction

Park Lane Ala Moana

Kapiolani Medical Center for Women & Children NICU / PICU Phase II

December 2015

Hilton Waikoloa Kings Land Phase II

Introduction

DOTA ARFF Training FacilityKamehameha Schools Hawaii Campus

Univ. of Hawaii at Hilo Bookstore

December 2015

RLB Worldwide Locations

Introduction

December 2015About Us

AMERICASCANADACARIBBEANUSA

Austin, TXBoston, MAChicago, ILDenver, COHagta, GUHilo, HIHonolulu, HIKennewick, WALas Vegas, NVLos Angeles, CAKihei, HINew York, NYOrlando, FLPhoenix, AZPortland, ORSan Francisco, CASeattle, WATucson, AZWaikoloa, HIWashington, DC

December 2015

National View

National View

December 2015

National View

Source: U.S. Bureau of Labor Statistics

Monthly Change in Construction Employment, January 2012 November 2015

National View

Mon

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Cha

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in E

mpl

oym

ent

Seas

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nds

December 2015

U.S. Construction Put in Place, Seasonally Adjusted (Billions)

Source: US. Census Bureau *RLB Estimate for 2015

* RLB Estimate

National View

National View

Chart1

848.34

890.521

989.334

1102.213

1169.836

1153.027

1067.045

903.549

802.678

777.553

842.834

915.765

964.934

1037.454

Seasonally Adjusted, in billions

Chart

848.34

890.521

989.334

1102.213

1169.836

1153.027

1067.045

903.549

802.678

777.553

842.834

915.765

964.934

1037.454

Seasonally Adjusted, in billions

CIDR

U.S. Census Bureau

Source: Construction Spending

Annual Rate for Total Construction: U.S. Total

Seasonally Adjusted Total Construction [Millions of Dollars]

Period: 2002 to 2015

Data Extracted on: September 3, 2015 (4:41 pm)

PeriodValue

2002858,654

862,338

844,551

858,240

850,935

846,777

847,129

839,008

832,134

839,690

844,697

855,921

2003863,855

859,225

851,132

859,459

866,814

880,865

891,264

901,839

911,589

925,732

925,985

948,491

2004938,826

938,656

960,946

967,761

974,158

983,072

1,006,119

1,013,724

1,012,290

1,015,562

1,023,210

1,037,684

20051,036,187

1,056,492

1,065,262

1,058,365

1,078,586

1,089,505

1,109,691

1,119,782

1,131,739

1,145,663

1,156,977

1,178,305

20061,183,861

1,199,767

1,213,270

1,183,485

1,180,059

1,172,932

1,165,093

1,158,193

1,151,104

1,139,292

1,137,488

1,153,491

20071,149,899

1,156,008

1,167,402

1,159,124

1,168,195

1,166,892

1,154,018

1,160,593

1,165,162

1,152,511

1,127,558

1,108,958

20081,106,047

1,092,331

1,094,910

1,091,142

1,091,008

1,074,637

1,066,919

1,057,459

1,056,666

1,050,690

1,029,211

993,515

2009962,704

959,907

954,984

929,593

911,241

901,987

899,601

889,643

880,259

869,374

850,732

832,565

2010816,132

795,808

805,985

824,008

816,318

816,302

788,524

791,653

798,916

800,266

798,328

779,895

2011752,638777,553

746,056

753,433

755,420

775,837

786,784

763,468

786,308

790,294

795,733

804,046

820,614

2012824,687842,834

820,677

817,842

825,133

838,778

845,072

846,645

855,916

862,220

868,215

865,989

2013872,531915,765

888,043

881,524

893,137

896,992

907,334

925,110

930,029

937,660

945,076

951,836

959,909

2014961,002964,934

968,303

964,995

964,738

957,641

950,282

952,468

955,017

959,182

979,573

976,888

989,118

2015990,0511,037,454

993,465

1,006,351

1,044,641

1,068,424

1,075,865

1,083,378

Sheet1

PeriodValuegraph Value

2002848,340848.340

2003890,521890.521

2004989,334989.334

20051,102,2131,102.213

20061,169,8361,169.836

20071,153,0271,153.027

20081,067,0451,067.045

2009903,549903.549

2010802,678802.678

2011777,553777.553

2012842,834842.834

2013915,765915.765

2014964,934964.934

20151,037,4541,037.454

*RLB Estimate

Sheet1

December 2015

National ViewConstruction Activity Cycle

National View

December 2015

Local View

Local View

December 2015

Honolulu ViewHonolulu vs. National Average Bid Prices, 2002-2015

Local View

Source: Rider Levett Bucknall

Chart1

103.67100.53

103.85100.85

104.06101.37

104.08101.49

104.13101.55

104.54102.38

104.89103.09

107.77106.47

110.42108.35

112.65111.57

114.2114.78

115.81117.36

117.5119.64

119.83122.04

122.83127.8

126.06131.13

129.57134.65

132.89137.31

135.63138.52

138.74140.89

142.38144.86

145.63148.11

147.78149.77

150.4153.37

152.36156.5

154.04159.55

152.95158.89

145.19152.32

143.35146.99

142.48145.69

141.8145.55

142.21144.46

142.58144.54

142.6144.56

142.77144.86

143.42146.23

144.53150.77

145.29150.93

145.73152.57

146.35153.81

146.67155.18

147.74156.83

149.19157.37

150.75159.66

151.89159.86

153.09162.6

154.56169.46

156.33175.92

158.48181.26

161.11186.36

162.98192

164.96197.82

4218642186

4227842278

National

Honolulu

Index Value, April 2001 = 100

National vs. Honolulu Index

NationalHonolulu

Apr-01100100

Jul-01100.63100.04

Oct-01101.25100.08

Jan-02102.16100.05

April-02103.12100.22

Jul-02103.67100.53

Oct-02103.85100.85

Jan-03104.06101.37

Apr-03104.08101.49

Jul-03104.13101.55

Oct-03104.54102.38

Jan-04104.89103.09

Apr-04107.77106.47

Jul-04110.42108.35

Oct-04112.65111.57

Jan-05114.2114.78

Apr-05115.81117.36

Jul-05117.5119.64

Oct-05119.83122.04

Jan-06122.83127.8

Apr-06126.06131.13

Jul-06129.57134.65

Oct-06132.89137.31

Jan-07135.63138.52

Apr-07138.74140.89

Jul-07142.38144.86

Oct-07145.63148.11

Jan-08147.78149.77

Apr-08150.4153.37

Jul-08152.36156.5

Oct-08154.04159.55

Jan-09152.95158.89

Apr-09145.19152.32

Jul-09143.35146.99

Oct-09142.48145.69

Jan-10141.8145.55

Apr-10142.21144.46

Jul-10142.58144.54

Oct-10142.60144.56

Jan-11142.77144.86

Apr-11143.42146.23

Jul-11144.53150.77

Oct-11145.29150.93

Jan-12145.73152.57

Apr-12146.35153.81

Jul-12146.67155.18

Oct-12147.74156.83

Jan-13149.19157.37

Apr-13150.75159.66

Jul-13151.89159.86

Oct-13153.09162.6

Jan-14154.56169.46

Apr-14156.33175.92

Jul-14158.48181.26

Oct-14161.11186.36

Jan-15162.98192

Apr-15164.96197.82

Jul-15

Oct-15

National vs. Honolulu Index

National

Honolulu

Index Value, April 2001 = 100

Honolulu Index

Apr-01Jul-01Oct-01Jan-02April-02Jul-02Oct-02Jan-03Apr-03Jul-03Oct-03Jan-04Apr-04Jul-04Oct-04Jan-05Apr-05Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-11Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15

1150711511.5115161151311532115681160511665116791168511781118621225212468128381320813505.08513766.88614043.43314705.84915089.66515494.05715800.25115939.08216211.67916668.8117043.43117233.52917648.80318008.72518359.1518283.9951752816913.5916764.7916748.441166231663216635166691682717349173681755617699178571804618109183721839518710195002024320858214452209322763

100100.04100.08100.05100.22100.53100.85101.37101.49101.55102.38103.09106.47108.35111.57114.78117.36119.64122.04127.8131.13134.65137.31138.52140.89144.86148.11149.77153.37156.5159.55158.89152.32146.99145.69145.55144.46144.54144.56144.86146.23150.77150.93152.57153.81155.18156.83157.37159.66159.86162.6169.46175.92181.26186.36192197.82

Sheet3

December 2015

Hawaii Economic Indicators

Source: UHERO Figures for 2015-2017 are forecasts

Local View

December 2015

Hawaii Population Current population of Hawaii and growth rate:

2010 Census: 1,360,301 2013 (estimated): 1,408,987 2014 (estimated): 1,419,561 Growth Rate of 0.8%

From 2010 to 2014, population grew by 4.4% 70% of the total population lives in the City & County

of Honolulu Greatest population growth on the Big Island (24.5%,

2000-2010)

Local View

Source: Hawaii.gov DBEDT Research & Economic Analysis Division

December 2015

Hawaii EmploymentUnemployment rate decreased from 2014 to 2015 in all counties across the State of Hawaii.

Local View

Unemployment

2014 2015 % ChangeHonolulu County 4.6% 4.1% -0.5%

Hawaii County 6.5% 5.5% -1.0%

Maui County 5.1% 4.4% -0.7%

Kauai County 5.3% 4.8% -0.5%


December 2015

Hawaii Construction Industry Construction has been one of the major

contributors to job growth in Hawaii over the past few years Construction sector added 1,700 jobs in the third

quarter of 2015 (compared to same quarter of 2014) Indicators of Hawaiis construction industry were

all positive in 3rd Quarter of 2015: Private building authorizations, construction jobs,

government contracts awarded, but State CIP expenditures decreased in this quarter

Local View

December 2015

Hawaii Construction Industry Before the recession (specifically 2002-2007),

construction job growth averaged 8.0% per year; in 2007, the average number of construction jobs reached a peak of 40,000 jobs. As of the 3rdquarter, 2015, there are 34,200 construction jobs.

The strength of the current construction job market is in sharp contrast to the recession period, (from 2008-2011) where quarter-over-quarter construction job growth was negative.

Local View


December 2015

Hawaii Construction

Growth rates in total private building permits were positive in all counties, with major increase in Maui County.

Local View


December 2015

Hawaii Construction Industry Last years construction gains were smaller than

anticipated. Activity will continue to increase this year, as

Kakaako condo building intensifies and new tourism-related projects add to the mix.

The more attenuated schedule of rail building and lagging single-family developments will generate a lower and later peak to the current construction cycle.

Local View

Source: UHERO, Hawaii Construction Forecast, 3/27/15

December 2015

Hawaii Construction

Local View

Source: UHERO, Hawaii Construction Forecast, 3/27/15

December 2015

Hawaii Construction

Local View

Source: UHERO Data Portal (http://www.uhero.hawaii.edu)Rider Levett Bucknall Quarterly Construction Cost Report (http://rlb.com/publications/rlb-usa-report-second-quarter-2015/)

http://www.uhero.hawaii.edu/Chart1

41111000002004126912842004

42171000002005140053132005

46239000002006155807642006

44549000002007166685392007

38594000002008178125522008

27775000002009173735912009

30379000002010166930862010

22895000002011172751052011

34167000002012179280282012

39147000002013184924002013

441170000044117000002047163520471635

20155554000000201523452528

20165658000000201624952188

20175257000000201725965347

20184503000000201827019645

Building Permits

Building Permits (Forecast)

Construction Costs

Construction Costs (Forecast)

Building Permits (Millions)

Construction Costs (Thousands)

Historic Actuals & Construction Cost Escalation

Chart 2

YearBuilding PermitsBuilding Permits (Forecast)Construction CostsConstruction Costs (Forecast)

2004$4,111,100,000$ 12,691,284

2005$4,217,100,000$ 14,005,313

2006$4,623,900,000$ 15,580,764

2007$4,454,900,000$ 16,668,539

2008$3,859,400,000$ 17,812,552

2009$2,777,500,000$ 17,373,591

2010$3,037,900,000$ 16,693,086

2011$2,289,500,000$ 17,275,105

2012$3,416,700,000$ 17,928,028

2013$3,914,700,000$ 18,492,400

2014$4,411,700,000$4,411,700,000$ 20,471,635$ 20,471,635

2015$5,554,000,000$ 23,452,528

2016$5,658,000,000$ 24,952,188

2017$5,257,000,000$ 25,965,347

2018$4,503,000,000$ 27,019,645

Source:UHERO Data Portal (http://www.uhero.hawaii.edu)

*Note: The Building Permits listed are a total of Private Building Permits and Government Contracts Awarded per year

Rider Levett Bucknall Quarterly Construction Cost Report (http://rlb.com/publications/rlb-usa-report-fourth-quarter-2013/)

*Note: The Construction Costs listed are an average of all 4 quarters per year

Chart 2

Building Permits

Building Permits (Forecast)

Construction Costs

Construction Costs (Forecast)

Building Permits (Millions)

Construction Costs (Thousands)

Historic Actuals & Construction Cost Escalation

Total Building Permits

200420052006200720082009201020112012201320142015201620172018

Private Building Permits2,726.53,492.03,770.13,585.42,906.61,998.91980.31858.82643.82720.53315.14459460041803442

Government Contracts Awarded1,384.6725.1853.8869.5952.8778.61057.6430.7772.91194.21096.61095105810771061

TOTAL BUILDING PERMITS4,111.14,217.14,623.94,454.93,859.42,777.53037.92289.53416.73914.74411.75554565852574503

*Information from UHERO (Construction Indicators, Statewide)

Source: UHERO Data Portal (http://www.uhero.hawaii.edu). Table copyright UHERO, 2013.

Sheet3

December 2015

What is the Quarterly Cost Report (QCR)?

Comparative cost of construction in 12 U.S. cities, indexing them to show how costs are changing in each city in particular, and against the costs in the other 11 locations.

Youll be able to find this information on the Comparative Cost Index and Cost & Change Summary.

What is the QCR?

December 2015

Quarterly Cost Reports

What is the QCR?

December 2015

Cost & Change Summary

What is the QCR?

December 2015What is the QCR?

Las Vegas

New YorkHonolulu


Cost escalation in Honolulu in the 2ndQuarter hit 2.76% (11.0% annualized) leading its construction costs to eclipse those of New York City and making it the most expensive city to build in the USA.

December 2015

(Continued)

What is the QCR?

December 2015

Total Construction Cost Inputs Labor Materials Equipment

Including operations and maintenance costs Subcontractors Bonds Insurance Taxes General Contractor Overhead and Profit

About Construction Costs

December 2015

Total Construction Cost Inputs

Andthe Most Overlooked Factor

What the Market Will Bear:

Supply vs. Demand


December 2015

Economics 101SD1 D2

Q2

P2

Q1

P1

Q

P


December 2015

About Construction Costs Types of IndexesLabor & Material (ENR) Buy / Sell (RLB)


Rider Levett Bucknall 2015 4th Quarter ReportEngineering News-Record December 3, 2012

December 2015

Predicting Escalation


December 2015


Sources: Rider Levett Bucknall, Engineering News-Record, U.S. Bureau of Labor Statistics

Rates of Inflation

* ENR BCI and CPI Indexes recalibrated so Base = 100 at April 2001


Chart1

78.6877.67

199278.6278.07

79.3378.86

80.3479.42

80.9780.16

199381.580.61

84.0481.4

85.7981.63

85.1782.36

199486.7382.65

88.3183.32

87.7483.89

8884.51

199587.8884.96

87.5585.87

87.9486.21

88.0386.89

199688.3187.28

88.988.36

90.0988.75

92.7489.49

199794.189.94

9590.56

95.7990.73

95.2391.35

199894.9791.35

95.3191.86

95.5192.26

96.6792.71

199996.7292.88

96.6193.95

97.7194.23

98.9895.08

200098.9395.42

99.896.83

100.1197.68

100.1798.36

2001100.1198.98

100100100

100.63102.37100.34

101.25101.72100.45

102.16101.13100.11

103.12101.19101.64

103.67103.13101.81

103.85103.11102.49

104.06103.02102.71

104.08103.13103.9

104.13104.01103.96

104.54105.76104.58

104.89106.38104.69

107.77110.36106.27

110.42113.33107.07

112.64116.61107.91

114.2116.13107.8

115.81117.71110.01

117.5118.53110.46

119.83120.45112.61

122.83122.42112.1

126.06122.42113.91

129.57123.02115.04

132.89125.13114.08

135.63125.16114.42

138.74124.71116.84

142.38126.89117.75

145.63128.07118.11

147.78128.69119.32

150.4129.17121.44

152.36133.38124.34

154.04137.45122.43

152.95135.05119.36

145.19134.45120.54

143.35134.48121.74

142.48134.48122.2

141.8135.55122.49

142.21136.04123.24

142.58138.66123.24

142.6139.7123.64

142.77140.33124.49

143.42141.99127.14

144.53143.29127.71

145.32144.14127.99

145.73144.59128.13

146.35145.44130.07

146.67146.4129.51

147.74146.96130.76

149.19147.59130.18

150.75148.46131.45

151.89149.14132.05

153.09149.9132.02

154.56150.35132.23

156.33151.28134.01

158.48152.02134.68

161.11153.69153.69

162.98155.24155.24

164.96155.35155.35

RLB Index

ENR BCI

CPI

Index Values, Base = 100 at April 2001*

CPI

ActualIndexBase=100 at April 2001

1991Jan134.676.09

Apr135.276.43

Jul136.276.99

Oct137.477.67

1992Jan138.178.07CPI Datahttp://inflationdata.com/Inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded=true

Apr139.578.86

Jul140.579.42

Oct141.880.16http://www.bls.gov/cpi/#tables

1993Jan142.680.61

Apr144.081.4

Jul144.481.63

Oct145.782.36

1994Jan146.282.65

Apr147.483.32

Jul148.483.89

Oct149.584.51

1995Jan150.384.96

Apr151.985.87

Jul152.586.21

Oct153.786.89

1996Jan154.487.28

Apr156.388.36

Jul157.088.75

Oct158.389.49

1997Jan159.189.94

Apr160.290.56

Jul160.590.73

Oct161.691.35

1998Jan161.691.35

Apr162.591.86

Jul163.292.26

Oct164.092.71

1999Jan164.392.88

Apr166.293.95

Jul166.794.23

Oct168.295.08

2000Jan168.895.42

Apr171.396.83

Jul172.897.68

Oct174.098.36

2001Jan175.198.98

Apr176.9100

Jul177.5100.34

Oct177.7100.45

2002Jan177.1100.11

Apr179.8101.64

Jul180.1101.81

Oct181.3102.49

2003Jan181.7102.71

Apr183.8103.9

Jul183.9103.96

Oct185.0104.58

2004Jan185.2104.69

Apr188.0106.27

Jul189.4107.07

Oct190.9107.91

2005Jan190.7107.8

Apr194.6110.01

Jul195.4110.46

Oct199.2112.61

2006Jan198.3112.1

Apr201.5113.91

Jul203.5115.04

Oct201.8114.08

2007Jan202.416114.42

Apr206.686116.84

Jul208.299117.75

Oct208.936118.11

2008Jan211.080119.32

Apr214.823121.44

Jul219.964124.34

Oct216.573122.43

2009Jan211.143119.36

Apr213.240120.54

Jul215.351121.74

Oct216.177122.2

2010Jan216.687122.49

Apr218.009123.24

Jul218.011123.24

Oct218.711123.64

2011Jan220.223124.49

Apr224.906127.14

Jul225.922127.71

Oct226.421127.99

2012Jan226.665128.13

Apr230.085130.07

Jul229.104129.51

Oct231.320130.76

2013Jan230.280130.18

Apr232.531131.45

Jul233.596132.05

Oct233.546132.02

2014Jan233.916132.23

Apr237.072134.01

Jul238.250134.68CPI Datahttp://inflationdata.com/Inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded=true

Oct237.852134.46

2015Jan233.7132.11

Apr236.6133.75http://www.bls.gov/cpi/#tables

Jul

Oct

http://inflationdata.com/Inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded=true

http://inflationdata.com/Inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded=true

http://www.bls.gov/cpi/#tables

ENR

ActualIndexBase=100 at April 2001

1991January272076.81

April270976.5

July275777.86

October278678.68

1992January278478.62

April280979.33

July284580.34

October286780.97

1993January288681.5

April297684.04

July303885.79

October301685.17

1994January307186.73

April312788.31

July310787.74

October311688

1995January311287.88

April310087.55

July311487.94

October311788.03

1996January312788.31

April314888.9

July319090.09

October328492.74

1997January333294.1

April336495

July339295.79

October337295.23

1998January336394.97

April337595.31

July338295.51

October342396.67

1999January342596.72

April342196.61

July346097.71

October350598.98

2000January350398.93

April353499.8

July3545100.11

October3547100.17

2001January3545100.11

April3541100

July3625102.37

October3602101.72

2002January3581101.13

April3583101.19

July3652103.13

October3651103.11

2003January3648103.02

April3652103.13

July3683104.01

October3745105.76

2004January3767106.38

April3908110.36

July4013113.33

October4129116.61

2005January4112116.13

April4168117.71

July4197118.53

October4265120.45

2006January4335122.42

April4335122.42

July4356123.02

October4431125.13

2007January4432125.16

April4416124.71

July4493126.89

October4535128.07

2008January4557128.69

April4574129.17

July4723133.38

October4867137.45

2009January4782135.05

April4761134.45

July4762134.48

October4762134.48

2010January4800135.55

April4817136.04

July4910138.66

October4947139.7

2011January4969140.33

April5028141.99

July5074143.29

October5104144.14

2012January5120144.59

April5150145.44

July5184146.4ENR Building Cost Index

October5204146.96Economics_Historical Indicies_Building Cost Index History

2013January5226147.59

April5257148.46source:http://enr.construction.com/economics/historical_indices/Building_Cost_Index_History.asp

[email protected]

October5308149.9password:costindex1

2014January5324150.35

April5357151.28

July5383152.02

October5390152.22

2015January5497155.24

April5501155.35

July

October

http://enr.construction.com/economics/historical_indices/Building_Cost_Index_History.asp

[email protected]

Comparison

RLB IndexENR BCICPI

199176.8176.09Jan

76.576.43Apr

77.8676.99July

78.6877.67Oct

199278.6278.07Jan

79.3378.86Apr

80.3479.42July

80.9780.16Oct

199381.580.61Jan

84.0481.4Apr

85.7981.63July

85.1782.36Oct

199486.7382.65Jan

88.3183.32Apr

87.7483.89July

8884.51Oct

199587.8884.96Jan

87.5585.87Apr

87.9486.21July

88.0386.89Oct

199688.3187.28Jan

88.988.36Apr

90.0988.75July

92.7489.49Oct

199794.189.94Jan

9590.56Apr

95.7990.73July

95.2391.35Oct

199894.9791.35Jan

95.3191.86Apr

95.5192.26July

96.6792.71Oct

199996.7292.88Jan

96.6193.95Apr

97.7194.23July

98.9895.08Oct

200098.9395.42Jan

99.896.83Apr

100.1197.68July

100.1798.36Oct

2001100.1198.98Jan

100.00100100Apr

100.63102.37100.34July

101.25101.72100.45Oct

2002102.16101.13100.11Jan

103.12101.19101.64Apr

103.67103.13101.81July

103.85103.11102.49Oct

2003104.06103.02102.71Jan

104.08103.13103.9Apr

104.13104.01103.96July

104.54105.76104.58Oct

2004104.89106.38104.69Jan

107.77110.36106.27Apr

110.42113.33107.07July

112.64116.61107.91Oct

2005114.20116.13107.8Jan

115.81117.71110.01Apr

117.50118.53110.46July

119.83120.45112.61Oct

2006122.83122.42112.1Jan

126.06122.42113.91Apr

129.57123.02115.04July

132.89125.13114.08Oct

2007135.63125.16114.42Jan

138.74124.71116.84Apr

142.38126.89117.75July

145.63128.07118.11Oct

2008147.78128.69119.32Jan

150.40129.17121.44Apr

152.36133.38124.34July

154.04137.45122.43Oct

2009152.95135.05119.36Jan

145.19134.45120.54Apr

143.35134.48121.74July

142.48134.48122.2Oct

2010141.80135.55122.49Jan

142.21136.04123.24Apr

142.58138.66123.24July

142.60139.7123.64Oct

2011142.77140.33124.49Jan

143.42141.99127.14Apr

144.53143.29127.71July

145.32144.14127.99Oct

2012145.73144.59128.13Jan

146.35145.44130.07Apr

146.67146.4129.51July

147.74146.96130.76Oct

2013149.19147.59130.18Jan

150.75148.46131.45Apr

151.89149.14132.05July

153.09149.9132.02Oct

2014154.56150.35132.23Jan

156.33151.28134.01Apr

158.48152.02134.68July

161.11153.69153.69Oct

2015162.98155.24155.24Jan

164.96155.35155.35Apr

July

Oct

Comparison

RLB Index

ENR BCI

CPI

Index Values, Base = 100 at April 2001*

December 2015About Construction Costs

(Projections in 2012)

December 2015

Labor

Source: U.S. Bureau of Labor Statistics

Construction Employment, 2003-2015


Chart1

6689

6713

6700

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6010

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6121

6152

6169

6191

6201

6231

6275

6316

6347

6335

6365

6377

6378

6385

6388

Employment, in thousands

BLS Data Series

Employment, Hours, and Earnings from the Current Employment Statistics survey (National)

Original Data Value

Series Id:CES2000000001

Seasonally Adjusted

Super Sector:Construction

Industry:Construction

NAICS Code:23

Data Type:ALL EMPLOYEES, THOUSANDS

Years:2000 to 2015

2000Jan6752

Feb6730

Mar6811

Apr6794

May6770

Jun6778

Jul6794

Aug6796

Sep6807

Oct6814

Nov6817

Dec6792

2001Jan6824

Feb6841

Mar6862

Apr6844

May6849

Jun6840

Jul6845

Aug6827

Sept6813

Oct6804

Nov6784

Dec6785

2002Jan6775

Feb6766

Mar6755

Apr6710

May6684

Jun6701

Jul6688

Aug6701

Sept6702

Oct6689

Nov6713

Dec6700

2003Jan6704

Feb6667

Mar6654

Apr6689

May6706

Jun6723

Jul6735

Aug6760

Sept6783

Oct6784

Nov6796

Dec6827

2004Jan6848

Feb6838

Mar6887

Apr6901

May6948

Jun6962

Jul6977

Aug7003

Sept7029

Oct7077

Nov7091

Dec7117

2005Jan7095

Feb7153

Mar7181

Apr7266

May7294

Jun7333

Jul7353

Aug7394

Sept7415

Oct7460

Nov7524

Dec7533

2006Jan7601

Feb7664

Mar7689

Apr7726

May7713

Jun7699

Jul7712

Aug7720

Sept7718

Oct7682

Nov7666

Dec7685

2007Jan7718

Feb7621

Mar7707

Apr7690

May7675

Jun7687

Jul7659

Aug7611

Sept7575

Oct7562

Nov7535

Dec7487

2008Jan7472

Feb7433

Mar7402

Apr7337

May7281

Jun7212

Jul7157

Aug7115

Sept7042

Oct6967

Nov6813

Dec6701

2009Jan6567

Feb6446

Mar6291

Apr6154

May6100

Jun6010

Jul5932

Aug5855

Sept5787

Oct5716

Nov5696

Dec5654

2010Jan5580

Feb5500

Mar5537

Apr5553

May5520

Jun5516

Jul5508

Aug5524

Sept5501

Oct5508

Nov5506

Dec5467

2011Jan5432

Feb5458

Mar5476

Apr5492

May5516

Jun5527

Jul5547

Aug5552

Sept5588

Oct5585

Nov5588

Dec5612

2012Jan5629

Feb5629

Mar5628

Apr5627

May5608

Jun5623

Jul5632

Aug5641

Sept5649

Oct5668

Nov5684

Dec5724

2013Jan5746

Feb5798

Mar5815

Apr5813

May5833

Jun5856

Jul5854

Aug5866

Sept5893

Oct5918

Nov5933

Dec5937

2014Jan6006

Feb6032

Mar6062

Apr6103

May6114

Jun6121

Jul6152

Aug6169

Sept6191

Oct6201

Nov6231

Dec6275

2015Jan6316

Feb6347

Mar6335

Apr6365

May6377

Jun6378

Jul6385*preliminary

Aug6388*preliminary

Sept

Oct

Nov

Dec

&CBureau of Labor Statistics&L&R

&C&LSource: Bureau of Labor Statistics&RGenerated on: October 20, 2010 (07:47:26 PM)

BLS Data Series

Employment, in thousands

Construction Employment

December 2015

Labor Cost Trends

Source: Engineering News-Record

ENRs Skilled Labor Cost Index


Chart1

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9563

Base = 100 at 1913

Acr2A68

2000Jan5641

Feb5650

Mar5676

Apr5676

May5714

Jun5735

Jul5750

Aug5764

Sep5770

Oct5812

Nov5817

Dec5873

2001Jan5874

Feb5874

Mar5874

Apr5892

May5906

Jun5948

Jul5978

Aug5984

Sep6052

Oct6065

Nov6065

Dec6067

2002Jan6097

Feb6097

Mar6109

Apr6109

May6148

Jun6166

Jul6242

Aug6264

Sep6291

Oct6306

Nov6333

Dec6338

2003Jan6366

Feb6393

Mar6411

Apr6421

May6426

Jun6487

Jul6515

Aug6553

Sep6569

Oct6596

Nov6604

Dec6616

2004Jan6644

Feb6660

Mar6672

Apr6672

May6672

Jun6698

Jul6717

Aug6728

Sep6838

Oct6874

Nov6878

Dec6912

2005Jan6912

Feb6926

Mar6926

Apr6926

May6972

Jun6981

Jul6997

Aug7065

Sep7157

Oct7164

Nov7199

Dec7199

2006Jan7201

Feb7207

Mar7209

Apr7213

May7213

Jun7213

Jul7218

Aug7224

Sep7266

Oct7416

Nov7450

Dec7459

2007Jan7459

Feb7459

Mar7464

Apr7466

May7579

Jun7579

Jul7590

Aug7644

Sep7701

Oct7718

Nov7793

Dec7796

2008Jan7796

Feb7796

Mar7796

Apr7803

May7818

Jun7818

Jul7846

Aug7861

Sep7975

Oct8103

Nov8105

Dec8107

2009Jan8112

Feb8112

Mar8112

Apr8112

May8171

Jun8191

Jul8200

Aug8240

Sep8251

Oct8255

Nov8255

Dec8356

2010Jan8356

Feb8391

Mar8391

Apr8391

May8437

Jun8449

Jul8494

Aug8499

Sep8517

Oct8593

Nov8634enr -

[email protected]

2011Jan8644costindex1

Feb8644

Mar8644

Apr8652

May8652

Jun8711

Jul8725

Aug8748

Sep8763

Oct8773

Nov8793

Dec8800

2012Jan8809

Feb8820

Mar8848

Apr8848

May8848

Jun8851

Jul8879

Aug8963

Sep8966

Oct8973

Nov8997

Dec9010

2013Jan9010

Feb9028

Mar9028

Apr9028

May9029

Jun9047

Jul9051

Aug9058

Sep9062

Oct9129

Nov9164

Dec9183

2014Jan9188

Feb9192

Mar9225

Apr9265

May9294

Jun9295

Jul9306

Aug9309

Sep9341

Oct9387

Nov9387

Dec9434

2015Jan9465

Feb9468

Mar9475

Apr9529

May9474

Jun9551

Jul9563

Aug

Sep

Oct

Nov

Dec

Acr2A68

Base = 100 at 1913

ENR's Skilled Labor Cost Index

December 2015

Labor Cost Trends


December 2015

Constraints & Materials Glazing Factories around the world have

extended production times or simply stopped taking orders

Shipping:o West Coast slow downso Tianjin Port Explosiono Local Customso Greater quantity of materials

Many manufacturers closed during recession, which will put added pressure on materials when national construction demand peaks.


December 2015

Rising Utility Costs Surge of photovoltaic expected to

continue as electrical costs rise With billions to be spent on our sewer

system, expect sewer costs to continue increasing

Current low oil prices have kept down shipping cost increases; however, historically oil prices will increase


December 2015

Identification of Risks Entitlement Utilities (partially sewer) Traffic studies Environmental constraints more stringent Archeological Rising construction costs:

Maintaining levels of competition Locking in prices Alternative materials


December 2015

The Future

Source: The American Institute of Architects, http://www.calculatedriskblog.com

Architectural Billings Index

The Future

December 2015

The FutureTHE GOOD

RLB survey indicates that construction industry on road to recovery in major cities.

Consultant PSMJ declares the recession in the A/E/C industry to be officially over.

Good industry growth expected through 2020. Interest rates to remain low. Housing continues to recover. Pace expected to pick

up, especially now that unemployment has dropped below 7%.

The Future

December 2015

The FutureTHE NOT SO GOOD

Industry survivors continue to hang on, with some trades doing well and others only now bringing up their fees.

Capacity in some trades is becoming a problem and has led to upward price pressure.

Despite temporary setback, commodities will face ongoing price pressure driven by recovery in global demand and scarcity.

The Future

December 2015

The FutureEVERYTHING ELSE

Watch exchange rate of US$.

Watch consumer spending and consumer confidence.

Concern that overseas economic issues may negatively impact US economy.

Expect further bid prices to spike at activity tipping point.

2015 labor and materials prices continue to rise with increasing greater pressure on both.

The Future

December 2015

The Future - Inflation

The Future

Source: Rider Levett Bucknall

Con

stru

ctio

n C

ost

Chart1

11861854.580167237975

12251755.428660838065

12468036.507746538155

12837538.911872938245

13207805.926635738336

13505084.951940838427

13766885.805433838518

14043432.676429938609

14705848.912816438700

15089664.660741438791

15494056.929354438882

15800251.100474838973

15939082.394868539064

16293377.424704939155

16668810.111345639246

17043430.523864939366

17233529.213675139457

17648803.208760939548

18008724.80027639639

18359149.536786739730

18283994.966307739821

17528000.245145839912

16917579.788959340003

16764789.972420440094

16748440.900052340185

16623497.037203540246

16631921.462720240337

16634981.236035140428

16826591.466525840519

16826591.466525840610

17349311.687052840701

17368311.564138540792

17556203.317639340883

17699067.355041440974

17857341.65641341065

18046262.035600441156

18109439.926597841247

18372400.725388341338

18394833.433841459

18709965.899651541550

19499526.460616841641

2008451241732

2078747041823

2151503241914

2226805842005

2293609942096

2362418223624182.4639503

4227824096666.1132293

4236924337632.7743616

4246024824385.4298488

4255125320873.1384458

4264225827290.6012147

4273326085563.5072269

4282426607274.7773714

4291527139420.2729188

4300627546511.5770126

4309727821976.6927827

4318828100196.4597106

4327928381198.4243077

4337028665010.4085508

4346128951660.5126363

Actuals

Forecast Escalation

Timeframe

Honolulu Construction Cost Escalation

Sheet1

Dec-03$11,861,855

Mar-04$12,251,7553.29%10.90%

Jun-04$12,468,0371.77%

Sep-04$12,837,5392.96%

Dec-04$13,207,8062.88%

Mar-05$13,505,0852.25%10.92%

Jun-05$13,766,8861.94%

Sep-05$14,043,4332.01%

Dec-05$14,705,8494.72%

Mar-06$15,089,6652.61%8.14%

Jun-06$15,494,0572.68%

Sep-06$15,800,2511.98%

Dec-06$15,939,0820.88%

Mar-07$16,293,3772.22%7.89%

Jun-07$16,668,8102.30%

Oct-07$17,043,4312.25%

Jan-08$17,233,5291.12%

Apr-08$17,648,8032.41%5.99%

Jul-08$18,008,7252.04%

Oct-08$18,359,1501.95%

Jan-09$18,283,995-0.41%

Apr-09$17,528,000-4.13%-8.62%

Jul-09$16,917,580-3.48%

Oct-09$16,764,790-0.90%

Jan-10$16,748,441-0.10%

Mar-10$16,623,497-0.75%0.47%

Jun-10$16,631,9210.05%

Sep-10$16,634,9810.02%

Dec-10$16,826,5911.15%

Mar-11$16,826,5910.00%4.30%

Jun-11$17,349,3123.11%

Sep-11$17,368,3120.11%

Dec-11$17,556,2031.08%

Mar-12$17,699,0670.81%3.12%

Jun-12$17,857,3420.89%

Sep-12$18,046,2621.06%

Dec-12$18,109,4400.35%

Mar-13$18,372,4011.45%7.51%

Jul-13$18,394,8330.12%

Oct-13$18,709,9661.71%

Jan-14$19,499,5264.22%19,499,5260.00%

Apr-14$20,084,5123.00%13.50%20,084,5123.00%

Jul-14$20,787,4703.50%20,787,470

Oct-14$21,515,0323.50%21,515,032

Jan-15$22,268,0583.50%22,268,058

Apr-15$22,936,0993.00%9.00%22,936,099

Jul-15$23,624,182$23,624,1823.00%23,624,182

Oct-15$24,096,6662.00%24,096,666

Dec-15$24,337,6331.00%24,337,633

Mar-16$24,824,3852.00%7.00%24,824,385

Jun-16$25,320,8732.00%25,320,873

Sep-16$25,827,2912.00%25,827,291

Dec-16$26,085,5641.00%26,085,564

Mar-17$26,607,2752.00%6.50%26,607,275

Jun-17$27,139,4202.00%27,139,420

Sep-17$27,546,5121.50%27,546,512

Dec-17$27,821,9771.00%27,821,977

Mar-18$28,100,1961.00%4.00%28,100,196

Jun-18$28,381,1981.00%28,381,198

Sep-18$28,665,0101.00%28,665,010

Dec-18$28,951,6611.00%28,951,661

Block C

Block K

Block O

Gateway Towers

Block I

Block G

Block M

Sheet1

Actuals

Forecast Escalation

Timeframe

RLB Construction Cost Trending

Howard Hughes

QuarterEscalation Per QuarterEscalation Per AnnumBlock CBlock KBlock OGateway TowersBlock IBlock GBlock M

Last PricedDec-13Sep-13Dec-13

Contract DateApr-14Apr-14Oct-14Mar-15May-15Jun-15May-15

Oct-13$18,709,966$18,709,9661.71%7.51%8.93%

Jan-14$19,499,5264.22%19,499,5260.00%7.22%

Apr-14$20,084,5123.00%13.50%20,084,5123.00%10.00%16.50%16.50%19.50%16.50%

Jul-14$20,787,4703.50%20,787,470

Oct-14$21,515,0323.50%21,515,032

Jan-15$22,268,0583.50%22,268,058

Apr-15$22,936,0993.00%9.00%22,936,099

Jul-15$23,624,1823.00%23,624,182

Oct-15$24,096,6662.00%24,096,666

Dec-15$24,337,6331.00%24,337,633

Mar-16$24,581,0091.00%4.00%24,581,009

Jun-16$24,826,8191.00%24,826,819

Sep-16$25,075,0871.00%25,075,087

Dec-16$25,325,8381.00%25,325,838

Sheet3

December 2015

Thank You

www.americas.rlb.com

Slide Number 1Slide Number 2Slide Number 3Slide Number 4Slide Number 5Slide Number 6Slide Number 7Slide Number 8National ViewNational ViewU.S. Construction Put in Place, Seasonally Adjusted (Billions)National ViewLocal ViewHonolulu ViewHawaii Economic IndicatorsHawaii PopulationHawaii EmploymentHawaii Construction IndustryHawaii Construction IndustryHawaii ConstructionHawaii Construction IndustryHawaii ConstructionHawaii ConstructionWhat is the Quarterly Cost Report (QCR)?Quarterly Cost ReportsSlide Number 26Slide Number 27Slide Number 28Slide Number 29Slide Number 30Slide Number 31Total Construction Cost InputsTotal Construction Cost InputsEconomics 101About Construction Costs Types of IndexesPredicting EscalationAbout Construction CostsSlide Number 38LaborLabor Cost TrendsLabor Cost TrendsConstraints & MaterialsRising Utility CostsIdentification of RisksThe FutureThe FutureThe FutureThe FutureThe Future - InflationThank You

honolulu’s construction industry: where is it...

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