2013 outlook u.s. construction mid year update

1

2013 OutlookU.S. Construction Mid Year Update

MHC Atlanta SMPS

May 22, 2013

Dan Palmer Senior Director, Editorial Global Operations McGraw Hill Construction

McGraw Hill Construction

2 McGraw Hill Construction Confidential. All information presented @ McGraw Hill Construction, 2013. All rights reserved.

U.S. Construction Market Indicators and Sectors

The Environment -- Macroeconomic Picture

Single Family Housing and Multifamily Housing

Commercial Building

Institutional Building, plus Manufacturing Bldgs.

Public Works and Electric Utilities

Total Construction

Regional – The Southeast

Cycle Charts

Agenda


Total Construction – starts leveled off in 2010 and 2011; put in place bottomed out in 2011. During 2012 – moderate upward movement for both series.

U.S. Construction Market Indicators

150

300

450

600

750

90 92 94 96 98 00 02 04 06 08 10 12 14

M-H Construction Starts 2011 +2%

2012 +7%Billions of Dollars

Source: McGraw -Hill Construction

300

500

700

900

1,100

1,300

90 92 94 96 98 00 02 04 06 08 10 12 14

Construction Put in Place 2011 -3%

2012+10%Billions of Dollars

Source: U.S. Census Bureau


Residential Building strengthening; Commercial bldg. beginning to edge up. Institutional bldg. still in retreat; Public Works dealing with budget cuts.

U.S. Construction Sectors (Starts)

50

100

150

200

250

300

350

400

90 92 94 96 98 00 02 04 06 08 10 12 14

Residential Building 2011 +4%

2012+30%Billions of Dollars

20

40

60

80

100

120

90 92 94 96 98 00 02 04 06 08 10 12 14

Commercial Building 2011 +15%

2012 +10%Billions of Dollars

40

60

80

100

120

140

90 92 94 96 98 00 02 04 06 08 10 12 14

Public Works 2011 -12%

2012 -2%Billions of Dollars

35

55

75

95

115

135

90 92 94 96 98 00 02 04 06 08 10 12 14

Institutional Building Construction Starts

2011 -11%

2012-11%Billions of Dollars


Economic growth picked up in 2013 Q1, after flattening out in 2012 Q4.On balance, the pace of economic expansion remains lackluster.

GDP Pattern:

History Forecast 2009 2010 2011 2012 2013 -3.1% +2.4% +1.8% +2.2% +2.2%

Shape of Recovery:• Subdued – Periods of moderate expansion have been followed by deceleration.

• Much of 2012 was adversely affected by Continued uncertainty, due to European debt crisis November 2012 elections Fiscal Cliff

• One plus – corporate profits healthy• For 2013 – how much of a drag will come from sequester, higher payroll taxes.

U.S. Macroeconomic Picture

Real GDP Growth - Quarterly Annualized Percent Change

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

05 06 07 08 09 10 11 12 13

'13 Q1 +2.5%


After weakening in 2012 Q2, employment growth strengthened in second half of 2012. Pattern so far in 2013 has shown uneven improvement.

• Jobs lost from Feb.’08 to Feb. ’10: 8.7 Million.

• Job creation so far in 2010-2013: 6.2 Million. Unemployment rate at 7.5%

• Job growth in Jan.-Mar. ’12 : 262,000 /mo in Apr.-June ’12: 108,000 /mo

in July‘12-Dec.’12: 180,000 /mo

in Jan.’13-Apr.’13: 196,000 /mo


Change in Total Employment Thousands of Workers

-900-750-600-450-300-150

0150300450600

05 06 07 08 09 10 11 12 13

Apr. '13 +165,000

Unemployment Rate

3

4

5

6

7

8

9

10

11

05 06 07 08 09 10 11 12 13

Percent Apr.'13 7.5%

Jan. 2012- Apr. 2013, By Month

87

247

148 138

219

165

112

160138

271311

125153

332

165

205

0

50

100

150

200

250

300

350

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr


Fiscal Cliff Averted, but Sequestration Began March 1.

• Fiscal Cliff Deferred by January 1 Agreement - For high income earners, income tax rate raised from 35% to 39.6%. For those below the thresholds, tax rates remain unchanged.

- Automatic spending cuts called for by the Budget Control Act of 2011, which would have reduced spending on discretionary federal spending by about 8%, deferred until March 1. - Payroll tax cut, which lowered rate from 6.2% to 4.2%, allowed to expire

• Sequestration Now in Effect - $85 billion in cuts over next 7 months; $1.2 trillion in cuts over next ten years.

- Impact not immediate; will kick in over several months as gov’t agencies implement cuts. - CBO: without sequestration, GDP growth would be 0.6% higher, 750.000 more full-time jobs

- Cuts to major construction programs estimated at $4 billion

Biggest hits – Dept. of Energy environmental cleanup EPA water infrastructure Military construction

- Infrastructure accounts financed by trusts funds are largely exempt from the sequester Including – Federal-aid highway funding Airport Improvement Program construction grants Some transit aid Veterans Administration construction accounts also exempt.



Funding from federal government still constrained.

Fiscal 2013 Appropriations• A continuing resolution passed in September 2012, kept funding essentially steady through March 27, 2013. (Included 0.6% hike for domestic discretionary programs.)

• In late March, Congress passed another continuing resolution, financing federal programs through September 30, 2013. Sets highway and transit funding at MAP-21 levels.

Fiscal 2012 Appropriations• Federal highway program trimmed 5% to $39 bil. High-speed rail received zero funding again Mass transit account increased 5%• Other accounts generally lower: Clean Water SRF’s cut 4% Drinking Water SRF’s cut 5%

GSA new construction account cut 39% GSA repairs &renovation account unchanged DOD base closure account cut 77% DOD other military construction cut 8% VA major construction projects cut 45% Corps of Engineers construction increased 5%

Federal Budget Surplus/Deficit Billions of Dollars, CBO Projections

-1,600-1,400-1,200-1,000

-800-600-400-200

0200400

90 92 94 96 98 00 02 04 06 08 10 12 14



State fiscal health improving, although still fragile for some states.

State & Local Governments

0

2

4

6

8

10

12

90 92 94 96 98 00 02 04 06 08 10 12 14

Year-end Balance, Percent of Expenditures

Note: For fiscal year 2012, if TX and AK excluded, then year-end balance is 3.8%.

For fiscal 2012, 12 states enacted budgetswith balance levels below 1%, while 19 statesenacted budgets with balance levelsbetween 1% and 5%.Adequate fiscal cushion for a state is when year-end balance is at least 5%.

• Many states have faced large budget shortfalls, including the following states with the gaps closed when fiscal year 2012 budgets were adopted:

– California ($23 billion)– Illinois ($5 billion)– New Jersey ($10 billion)– New York ($10 billion)– Florida ($4 billion)Source: Center on Budget and Policy Priorities

• Significantly – State Fiscal Stabilization Fund support under ARRA has diminished substantially –

2010: $61 billion 2011: $52 billion 2012: $ 5 billion

2013: $ 0.5 billion



Lending standards for commercial real estate loans continue to show gradual easing.

• Lending standards for commercial real estate loans have eased for 9 straight qtrs.

• Lending standards for C&I loans have eased for 13 out of 14 quarters.

• But, lending standards for residential mortgage loans have only recently shown some easing – 5% of lending officers in Jan. 2013 survey 8% of lending officers in Apr. 2013 survey

• Several major projects have resumed construction• Impact of financial regulatory reform?

• Mortgage Bankers Survey results –

commercial and multifamily mortgage originations up 24% in 2012.


Survey of Bank Lending Officers Percent Reporting Tighter Lending Standards for Commercial Real Estate Loans

-40

-20

0

20

40

60

80

100

90 92 94 96 98 00 02 04 06 08 10 12 14

Survey of Bank Lending Officers Percent Reporting Stronger Demand for Commercial Real Estate Loans

-80

-60

-40

-20

0

20

40

60

90 92 94 96 98 00 02 04 06 08 10 12 14


Signs of improving single family market – rising home sales, stabilizing prices.

U.S. Single Family Housing

Single Family Housing

2009 435,000 units -21%2010 446,000 units +2%2011 413,000 units -7%

2012 516,000 units +25%

200400600800

1,0001,2001,4001,6001,800

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Single Family HousingThousands of Dwelling Units

Home Sales - New & Existing Homes Millions

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

01 02 03 04 05 06 07 08 09 10 11 12 13 143.0

3.6

4.3

4.9

5.6

6.2

6.9

7.5

New Homes (L)

Existing Homes (R)

S&P Case-Shiller Home Price Index 20-Metro Composite, Indexed Jan 2000=100

100

120

140

160

180

200

220

01 02 03 04 05 06 07 08 09 10 11 12 13 14


Signs of improving single family market.

• Inventory of new homes for sale fell to 4.0 months in January, lowest since 2004.

• Record low mortgage rates – reached 3.3% In late 2012, although edged up to 3.4% -3.6% in early 2013, before retreating to 3.4%.• However, lending standards for home mortgages remain tight. • Demographic demand: 1 to 1.2 million units per year. Will it be helped by by echo boom moving into their 20’s?


2013 640,000 units +24%

U.S. Single Family Housing

Mortgage Rates - Weekly

23456789

1011

90 92 94 96 98 00 02 04 06 08 10 12 14

Percent

Supply of Single Family Housing

2

4

6

8

10

12

14

90 92 94 96 98 00 02 04 06 08 10 12 14

Number of Months, New Homes


Construction has shown steady gains since 2010, still going.

• Apartments led early upturn.

• Some benefit from stimulus act -- Affordable housing projects received a boost.

• Helped by push for downtown redevelopment.

• Demographics supportive, from both empty-nesters and now young adults. • Rental vacancy rates retreating, rents are increasing.

• Condominium projects now picking up.

• Compared to commercial building, still a relatively attractive investment target given more stable revenue.

.

U.S. Multifamily Housing

Multifamily Housing 2009 136,000 units -55%2010 157,000 units +15%2011 215,000 units +37%

2012 274,000 units +28%

2013 330,000 units +20%

0

150

300

450

600

750

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Multifamily HousingThousands of Dwelling Units


After steep decline in 2008-2010, store construction is turning the corner.

• Derived demand from housing market – definitely true on the downside of the cycle; now beginning to show on upside.

• Recent retail sales have fluctuated. Payroll tax increase could be a negative for consumer spending in near term.

• Some outlet mall projects starting, along with projects by a few major retailers.

• Extreme discounters (Family Dollar, Dollar General) still expanding.

• Store renovations have seen much smaller decline.

U.S. Commercial - Stores

Stores and Shopping Centers 2009 96 msf -54%2010 81 msf -16%2011 84 msf +4%

2012 104 msf +23%

2013 122 msf +18%

050

100150200250300350400

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Stores and Shopping CentersMillions of Square Feet


U.S. Commercial – StoresMajor alterations projects for stores has been much more stable than projectsclassified as new and additions, including growth in 2010-2012.

Stores Alterations

0

2

4

6

8

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars 2011

+1%2012+5%


Warehouse construction now seeing healthy percentage growth.

U.S. Commercial - Warehouses

Warehouses 2009 68 msf -65%2010 49 msf -28%2011 63 msf +28%

2012 93 msf +48%

2013 114 msf +23%

0

50

100

150

200

250

300

350

88 90 92 94 96 98 00 02 04 06 08 10 12 14

WarehousesMillions of Square Feet

• Vacancy rates still high, but easing. Reached 14.5% in 2010 Q2, and have since retreated to 12.3% in 2013 Q1.

• Some larger regional facilities being built by major retailers. In 2011 and 2012, several large facilities built for Amazon.com.

• Continued need for updated facilities to handle improved inventory management practices. • Increased trade would help lift demand for warehouse space Imports/exports likely to be dampened in near term, due to global economic slowdown.


U.S. Commercial - Hotels

Hotels 2009 28 msf -64%2010 17 msf -39%2011 26 msf +55%

2012 33 msf +26%

2013 38 msf +15%

Hotel construction up sharply in 2011-2012; more growth underway.

• More positives now: Business travel has improved Industry financials stronger

• Casino building becoming more active

• Several major projects reaching groundbreaking,

Occupancies for 2012 at 61.4% Revpar for 2012 up 6.8%.

0

20

40

60

80

100

120

88 90 92 94 96 98 00 02 04 06 08 10 12 14

HotelsMillions of Square Feet

Revenue Per Available RoomSmith Travel Research

5.7%

-1.9%

5.5% 6.4%6.8%8.2%

-16.9%-20%

-15%

-10%

-5%

0%

5%

10%

2007 2008 2009 2010 2011 2012 2013YTD


U.S. Commercial – Office BuildingsMajor office alterations projects stayed strong though 2009, retreated in 2010, and essentially stabilized in 2011-2012.

Office Building Alterations

0

2

4

6

8

10

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars2011+5%

2012 -7%


Change in Office Employment Thousands of Workers

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

• Office vacancy rates have topped off, now retreating gradually.

• Overbuilding is less than in past cycles.

• Corporations remain hesitant about hiring.

U.S. Commercial – Office BuildingsOffice market fundamentals are improving.

0

5

10

15

20

25

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Downtown

Suburban

U.S. Office Vacancy Rates CB Richard Ellis

17.0%

12.4%


Educational buildings continue to lose momentum.

Based on Sq. Ft 2011 2012Primary, Jr. Highs -15% -9%High Schools -10% -19%Colleges/Univ. -7% -18%Libraries -8% -39%Laboratories -9% -39%Museums +9% -26%Comm. Colleges -1% -36%Vocational Schools -16% -28%

• Several large bond measures passed in November 2012 elections, in Texas, California, New Jersey, among other states..• College endowments were basically flat in 2012, a shift after strong gain in 2011. • Major universities still re-visiting deferred capital spending plans. .

U.S. Institutional – Educational Buildings

50

100

150

200

250

300

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Educational BuildingsMillions of Square Feet

Educational Buildings 2009 174 msf -22%2010 149 msf -15%2011 132 msf -11%

2012 109 msf -17%

2013 105 msf -4%


K-12 school construction larger and more volatile than colleges/universities.

In 2012, sq. ft. for K-12 school construction was 3.6 times the size of Colleges/Univ./Comm. Colleges.

In 2012, dollars for K-12 school construction was 2.1 times the size of Colleges/Univ./Comm. Colleges.

Educational Buildings -- Segments

0255075

100125150175

200

86 88 90 92 94 96 98 00 02 04 06 08 10 12

Millions of Sq. Ft.

K-12

Colleges/ Comn. Colleges

Educational Buildings -- Segments

0

8

16

24

32

40

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars

K-12

Colleges/ Comm. Colleges

U.S. Institutional – Educational Buildings


U.S. Institutional – Educational Buildings Major alterations for educational buildings have been relatively resilient.

For K-12 – 2010, +4%; 2011, -6; 2012, -7%.For Colleges/Univ./Comm.Col. – 2010, +21%; 2011, -11%; 2012, +12%.

Educ. Bldg. Alterations -- Segments

012345678

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars

K-12

Colleges/ Comm. Colleges


Based on Sq. Ft 2011 2012Clinics/ Nursing Homes +12% -5%Hospitals -7% -13%

Healthcare Facilities 2009 68 msf -38%2010 73 msf +8%2011 75 msf +3%

2012 69 msf -8%

2013 68 msf -2%

Healthcare Facilities

0

15

30

45

60

75

90

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Millions of Square Feet

Hospitals

Clinics

U.S. Institutional – Healthcare Facilities Healthcare facilities slipped back again in 2012, putting the modest recovery on hold in the near term.

• Hospital chains hard-hit in 2009 by tight credit conditions.• Debate over healthcare reform created near-term uncertainty.

• U.S. military Veterans Admin. projects helped to ease some of the near-term slowdown.

• Now – uncertainty over reduced Medicare reimbursements, Affordable Care Act implementation More healthcare mergers.• Sector still supported by – Need to replace aging facilities Growth of elderly population.


Public Buildings continue to lose momentum.

• Received benefits of 2009 federal stimulus act for courthouses, federal buildings, land ports of entry. • Now affected by winding down of stimulus support, in combination with diminished federal spending.

Based on Sq. Ft. 2011 2012

Detention Facilities -29% -25%Armories/Military -17% -20%Courthouses -24% +2%Police/Fire Stations -10% -20% Post Offices -98% -0-

U.S. Institutional – Public Buildings

0

15

30

45

60

75

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Public BuildingsMillions of Square Feet

Public Buildings 2009 48 msf -3%2010 34 msf -29%2011 27 msf -21%

2012 22 msf -17%

2013 20 msf -10%


Amusement/Recreational appears to be turning the corner.

Based on Sq. Ft 2011 2012

Convention Centers -11% -39%Sports Arenas -12% +31%Theaters -19% +4% Other (inc. theme parks) -2% -1%

• This category is affected by both public and private financial support.• The year 2010 included several large amusement renovation projects in NYC --

$850 million for Madison Sq. Garden, $400 million for the Javits Convention Center, $53 million for Carnegie Hall. • Casino projects gaining some momentum.

Amusement & Rec. Bldgs. 2009 42 msf -29%2010 35 msf -17%2011 33 msf -5%

2012 32 msf -2%

2013 35 msf +8%

0

20

40

60

80

100

120

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Amusement & Rec. BuildingsMillions of Square Feet

U.S. Institutional – Amusement & Rec.


Airport terminal work in sq. ft. up in 2012, while dollars retreated.In general, renovation work has moderated decline in dollars relative to sq. ft.

U.S. Institutional – Airport Terminals

Airport Terminals2009 4.4 msf +49%2010 3.0 msf -33%2011 1.5 msf -49%

2012 1.8 msf +20%

2013 1.6 msf -10%

Airport Terminals2009 $2.6 bil. -4%2010 $2.6 bil. -0-2011 $2.4 bil. -6%

2012 $1.8 bil. -25%

2013 $1.8 bil -0-

Airport Terminals Millions of Square Feet

0

2

4

6

8

10

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Airport Terminals Billions of Dollars

0.0

0.5

1.0

1.5

2.0

2.5

3.0

88 90 92 94 96 98 00 02 04 06 08 10 12 14


Plant construction decelerated in 2012, due to the economic and political uncertainty, as well as trade slowdown. Dollars pulled back after strong ’11.

U.S. Manufacturing Buildings

Manufacturing Bldgs.2009 36 msf -55%2010 47 msf +29%2011 54 msf +16%

2012 56 msf +3%

2013 58 msf +5%

Manufacturing Bldgs.2009 $9.7 bil. -69%2010 $9.5 bil. -2%2011 $17.2 bil. +81%

2012 $12.2 bil. -29%

2013 $13.2 bil +8%

0

50

100

150

200

250

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Manufacturing BuildingsMillions of Square Feet

0

10

20

30

40

88 90 92 94 96 98 00 02 04 06 08 10 12 14

Manufacturing BuildingsBillions of Dollars


Highways/bridges retreated through 2012; several large projects will help in 2013.

• Waning stimulus support, combined with tough state fiscal environment has dampened construction near term.

• Fiscal 2012 appropriations – federal highway funding cut 5% to $39 billion. Some additional funds provided for disaster relief reconstruction.

• MAP-21 (Moving Ahead for Progress in the 21st Century) will keep transportation funding at current levels through 2014. Contains mechanisms to “stretch” funding.

• Federal funding for highways and bridges will not be hit hard by budget sequestration, since funding comes via Highway Trust Fund.

• Added lift in 2013 could come from large projects, including a portion of the $3 billion Tappan Zee Bridge project in New York.

Highways and Bridges 2009 $57.2 bil. +8%2010 $59.5 bil. +4%2011 $56.8 bil. -5%

2012 $52.4 bil. -8%

2013 $53.8 bil +3%

U.S. Public Works – Highways and Bridges

Highways and Bridges

10

20

30

40

50

60

70

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars


Environmental public works adversely affected by tight budgets.

• Projects generally take longer to reach construction start stage compared to transportation work.

• Construction often the result of EPA mandates to local governments.

• Budget sequestration will hit environmental projects harder than transportation work.

Environmental Public Works

2009 $36.6 bil. -5%2010 $33.2 bil. -9%2011 $31.5 bil. -5%

2012 $28.8 bil. -9%

2013 $28.1 bil -2%

U.S. Public Works – Environmental

Sewers, Water Resources

0

3

6

9

12

15

18

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Sewers

Water Resources

Billions of DollarsWater Supply Systems

0

3

6

9

12

15

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars


Diverse set of project types can be volatile; rail-related work picked up in 2012.

• Includes site work, rail-related work, pipelines, airport runways, outdoor sports stadiums.

• Pipelines strengthened though 2010, retreated

in 2011, made partial rebound in 2012 with segment of Keystone oil pipeline. Will the major part of the Keystone oil pipe start in 2013?

• Mass transit account has fared relatively well, raised 5% for fiscal year 2012.

• In 2012 – numerous rail projects – - $877 mil. RTD Eagle commuter rail in Denver CO - $326 mil. Metro Gold Line in Pasadena CA -$280 mil. Warm Springs St. Ext. in Fremont CA

• High-speed rail plans? Received zero federal funding for fiscal 2012, but still has support of Obama Administration. California high-speed rail project in progress.

“Other” Public Works

2009 $29.9 bil. -0-2010 $28.1 bil. -6%2011 $18.1 bil. -36%

2012 $23.1 bil. +28%

2013 $22.4 bil -3%

U.S. Public Works – “Other” Public Works

"Other" Public Works

0

5

10

15

20

25

30

35

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars


New electric utility starts reached record high in 2012; downturn now underway.

• Energy Bills of 2005-2007 – provided tax incentives for electric utilities, transmission lines, etc.

• Stimulus act also provided boost – incentives for alternative sources of electricity generation.

• Capacity utilization was at 87% for 2007; utilization retreated to 74% in 2012, reflecting surge of new plants.

• Gas-fired plants strong in 2012.

• Vogtle and Summer nuclear plants (at $8.5 billion each) started in 2012. Prospects for

nuclear plants being re-evaluated, however.

• Alternative energy power plants very strong – 2010 up 124% and 2011 up 55% But 2012 down 38%. Loan guarantees extended another year.

• Power lines also strong – 2010 up 52% and 2011 up 8%. But, 2012 slipped 12%.

Electric Utilities 2009 $21.1 bil. -37%2010 $28.6 bil. +36%2011 $43.8 bil. +53%

2012 $48.4 bil. +11%

2013 $32.0 bil -34%

U.S. Electric Utilities

Electric Utilities

0

10

20

30

40

50

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars


Billions of Dollars

U.S. Total Construction Starts for 2013

2008 2009 2010 2011 2012 2013

558.2 426.3 434.4 442.2 471.7 507.1-13% -24% +2% +2% +7% +8%

122.4 94.3 100.0 97.3 125.8 160.3-39% -23% +6% -3% +29% +27%

38.1 17.9 21.7 29.2 38.8 47.6-37% -53% +21% +35% +33% +23%

81.4 47.3 41.9 48.1 52.9 60.8-19% -42% -11% +15% +10% +15%

130.6 112.3 111.9 100.1 89.2 88.9+11% -14% -0- -11% -11% -0-

31.0 9.7 9.5 17.2 12.2 13.2+50% -69% -2% +81% -29% +8%

121.2 123.6 120.7 106.4 104.4 104.3-0- +2% -2% -12% -2% -0-

33.5 21.1 28.6 43.8 48.4 32.0+77% -37% +36% +53% +11% -34%

Total Construction 524.7 405.2 405.8 398.4 423.3 475.1-16% -23% -0- -2% +6% +12%

Excluding Elec.Utilities

Institutional Bldgs.

Manufacturing Bldgs.

Public Works

Electric Utilities

Total Construction


Multifamily Housing

Commercial Bldgs.


Total Construction in 2012, by State %ch %ch $ Bil. 12/11 12/05 FL $28.0 +23% -61% GA 19.7 +56% -29% SC 16.1 +100% +25% NC 15.2 -0- -38% TN 9.2 +12% -32% AL 6.4 +6% -34%

Total $94.6 +30% -41%

The Southeast Region (FL, GA, SC, NC, TN, AL) Comparing the pattern of total construction starts to the U.S.

M-H Construction Starts

25

100

175

250

325

400

88 90 92 94 96 98 00 02 04 06 08 10 12 14

United States

Southeast

Indexed, 1991 = 100


Florida Pluses: Still a leading retiree and tourist destination. Strong international ties, particularly to Latin America.

Georgia Pluses: High population growth. Strong potential in trade and distribution. Growing auto manufacturing industry.

North Carolina Pluses: Important high-tech base. Universities that attract tech firms and professionals.

The Southeast Region The employment decline in the Southeast during 2008-2010 was generally steeper than the U.S. Job growth in 2011-2012 close to U.S.

Employment Growth, % change2008 2009 2010 2011 2012 2013 2014

U.S. -0.6% -4.4% -0.7% +1.2% +1.7% +1.5% +1.7%

FL -3.5% -6.3% -0.8% +1.1% +1.8% +1.9% +2.4%GA -1.0% -5.4% -1.0% +1.1% +1.3% +1.1% +1.8%

SC -1.0% -5.9% -0.2% +1.1% +1.5% +1.3% +2.0%NC -0.3% -5.5% -0.8% +1.2% +1.8% +1.8% +1.9%

TN -0.8% -5.6% -0.2% +1.7% +2.0% +1.4% +1.5%AL -0.7% -5.3% -0.8% 0% +0.7% +1.1% +1.9%


Single Family Housing in 2012, by State

Units %ch %ch (thous.) 11/10 11/05 FL 40.0 +37% -79% NC 28.6 +20% -64% GA 18.2 +24% -80% TN 15.2 +20% -63% SC 14.8 +19% -64% AL 11.6 +6% -59%

Total 128.5 +24% -73%

The Southeast Region Single Family Housing now heading upward.


50

125

200

275

350

425

500

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Thousands of Units2012

+24%2013

+25%


The Southeast Region – Recent Large Projects Multifamily Housing and Commercial Building

Value Sq. Ft. Start Date$ Millions Thous. City State Year: Mo

250.0 1,000 Cabana Bay Beach Resort Hotel Orlando FL 2013:01

231.0 1,208 Brickell CitiCentre - condo/apartment portion Miami FL 2012:09

200.0 1,000 A T & T Data Center Kings Mountain NC 2012:06

180.0 580 Four Season Luxury Resort Lake Buena VistaFL 2012:01

150.0 700 University Town Center Shopping Mall Sarasota FL 2013:02

139.7 1,650 Ross Dress for Less Warehouse Distribution Ctr Rock Hill SC 2012:04

131.9 734 Oceana Key Biscayne Luxury Condos-Villas Key Biscayne FL 2012:08

130.6 385 Brickell House Condominium Miami FL 2012:11

110.9 375 US Federal Office Building Miramar FL 2012:09

96.4 935 Publix Warehouse & Distribution Center Orlando FL 2012:12

94.0 377 The Mansions at Acqualina II Sunny Isles BeachFL 2012:08

91.1 1,000 Home Depot Online Distribution Center Mcdonough GA 2012:07

90.5 520 Brickell CitiCentre - store portion Miami FL 2012:09

84.7 276 AFTAC Headquarters Patrick A F B FL 2012:03


The Southeast Region Multifamily Housing and Commercial Building

Multifamily Housing

0

50

100

150

200

250

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Thousands of Units2012+45%

2013 +27%

Stores and Warehouses

0

15

30

45

60

75

90

86 88 90 92 94 96 98 00 02 04 06 08 10 12

Millions of Square Feet

Warehouses

Stores

Stores2012+34%

Stores2013+13%

14

Offices

0

15

30

45

60

75

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Millions of Square Feet2012-16%

2013+10%

Hotels

0

5

10

15

20

25

30

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Millions of Square Feet2012+32%

2013+15%


The Southeast Region – Atlanta Metro Area Multifamily Housing and Commercial Building in the Atlanta metro area

Multifamily Housing

0

5

10

15

20

25

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Thousands of Units2012 +7%

2013+23%

Stores

0

5

10

15

20

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Millions of Square Feet2012

+74%2013+10%

Offices

0

5

10

15

20

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Millions of Square Feet2012 -46%

2013+25%

Hotels

0

1

2

3

4

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14


+178%2013-10%


The Southeast Region – Recent Large Projects Institutional and Manufacturing Buildings

Value Sq. Ft. Start Date$ Millions Thous. City State Year: Mo

500.0 1,000 Baxter Blood Plasma Fractionation Plant Covington GA 2013:03

346.0 0 Horsehead Corporation Production Facility Rutherfordton NC 2012:05

312.6 1,900 KTG USA Plant (Expansion) Memphis TN 2012:01

216.8 1,500 Mercedes-Benz C-Class Plant (Expansion) Vance AL 2012:05

171.7 741 Broward County Courthouse Fort Lauderdale FL 2012:11

150.0 900 Continental Tire Plant Sumter SC 2012:08

140.0 431 Memorial Hospital Expansion Phase II Chattanooga TN 2012:03

134.6 1,124 Caterpillar Manufacturing Plant Bogart GA 2012:06

131.8 180 Miami's Frost Museum of Science Miami FL 2012:04

129.9 479 New Broughton Hospital Morganton NC 2012:06

115.0 400 Kissam Quadrangle (College Halls Phase II) Nashville TN 2012:07

115.0 30 Greenville Spartanburg Airport (Renov/Exp)(Ph 1) Greer SC 2012:08

110.7 245 St Joseph's South Hospital & Medical Office Bldg Riverview FL 2012:10

110.0 264 Northeast Georgia Medical Ctr South Hall Hospital Braselton GA 2013:03


The Southeast Region Institutional Buildings

Educational Buildings

0

15

30

45

60

75

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14


-15%2013-5%

Healthcare Facilities

0

5

10

15

20

25

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14


2013+8%

Amusement & Rec. Bldgs.

0

5

10

15

20

25

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Millions of Square Feet2012-4%

2013+3%

Other Institutional Bldgs.

0

10

20

30

40

50

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14


2013 +1%


The Southeast Region Airport-related Work and Manufacturing Buildings

Manufacturing Buildings

0

10

20

30

40

50

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Millions of Square Feet2012+64%

2013 +3%

Airport Runways&Terminals

0.00.3

0.60.9

1.21.5

1.8

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars2012 +9%

2013+2%


The Southeast Region – Recent Large ProjectsPublic Works and Electric Utilities

Value Start Date$ Millions City State Year: Mo

8,500.0 Nuclear Power Plant Units 3 and 4 at Plant Vogtle Waynesboro GA 2012:03

8,500.0 Nuclear Power Plant Units 2 and 3 - V.C. Summer Plant Jenkinsville SC 2012:04

1,300.0 Riviera Beach Next Generation Clean Energy Center Riviera Beach FL 2012:02

668.0 Palm Beach Renewable Energy Facility No 2 West Palm Beach FL 2012:04

132.0 US-1/FEC RR Structures Runway Fort Lauderdale FL 2012:02

125.0 CW Bill Young Regional Reservoir Repairs Lithia FL 2013:02

100.0 Washington White Post Solar Farm (25 MW) Bath NC 2012:10

96.6 Center Hill Dam Project (Foundation Rehabilitation) Lancaster TN 2012:07

90.9 Islamorada Village Wastewater System Islamorada FL 2013:02

72.0 Atlanta Streetcar Project Atlanta GA 2012:02

71.6 Passenger Terminal Apron (Reconstruction) (RE-BID) Memphis TN 2012:06

71.4 Clarksville Wastewater Treatment Plant Improvements Clarksville TN 2013:01

65.0 South County AWTP Expansion (4.5 to 10 MGD) Ruskin FL 2012:06

56.4 GA/DOT (I-285/SR 407) Resurfacing Marietta GA 2012:08


The Southeast Region Public Works and Electric Utilities

Environmental Public Works

01234567

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars2012 -7%

2013+3%

"Other" Public Wks (site work,etc.)

0

1

2

3

4

5

6

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars2012+42%

2013-15%

Electric Utilities

0

5

10

15

20

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Billions of Dollars2012

+208%2013 -75%

Highways and Bridges

0

2

4

6

8

10

12

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

2012-11%

2013-2%Billions of Dollars


Billions of Dollars

Southeast Total Construction Starts for 2013

2008 2009 2010 2011 2012 2013

107.69 73.17 72.66 72.85 94.59 91.67-22% -32% -1% -0- +30% -3%

31.46 22.10 23.54 24.07 31.54 40.06-42% -30% +7% +2% +31% +27%6.97 2.91 3.53 4.05 6.06 7.75

-44% -58% +21% +15% +50% +28%

16.49 8.54 7.27 8.09 8.61 9.96-26% -48% -15% +11% +6% +16%22.04 18.46 15.18 14.18 12.56 12.86+14% -16% -18% -7% -11% +2%

6.20 1.10 1.91 2.50 3.05 3.26+3% -82% +74% +31% +22% +7%

17.70 16.71 18.28 13.65 13.34 12.92-15% -6% +9% -25% -2% -3%6.83 3.35 2.94 6.30 19.42 4.86

+148% -51% -12% +115% +208% -75%

Total Construction 100.86 69.82 69.73 66.54 75.16 86.82

-25% -31% -0- -5% +13% +16%

Total Construction


Multifamily Housing

Commercial Bldgs.

Institutional Bldgs.

Manufacturing Bldgs.

Public Works

Electric Utilities

Excluding Elec.Utilities


Note: the 2011-?? Cycle includes 2011-2012 historical data and estimate for 2013.

CyclicalTroughs1975198219912011

Points of Perspective – U.S. Construction

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

Years from Cyclical Trough

1991-2011

1975-19822011-??

Total Construction Activity by CycleCyclical Trough (T) =100, Based on Constant Dollars

1982-1991


Note: the 2011-?? Cycle includes 2011-2012 historical data and estimates for 2013

CyclicalTroughs1975198219912011

Points of Perspective – U.S. Construction

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

Years from Cyclical Trough

1991-20111975-1982

2011-??

Nonresidential Building by Cycle

Cyclical Trough (T) =100, as determined by Total Construction

1982-1991

Based on Constant Dollars

Thank You Very Much!

47

2013 outlook u.s. construction mid year update

Documents