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2008 McGrawHill Construction Outlook

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1. 2008 McGraw-Hill Construction Outlook. Cliff Brewis. Senior Director Editorial ... Top 10 Metros -- ranked by new dwelling units. Year 2007 YTD %ch 07/06. 1. ... – PowerPoint PPT presentation

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Title: 2008 McGrawHill Construction Outlook


1
2008 McGraw-Hill Construction Outlook
Cliff Brewis Senior Director Editorial
McGraw-Hill Construction
2
U.S. Macroeconomic Picture
3
World Growth Remains Strong
Real GDP, change
Source Global Insight and SP
4
The Fed Cut Rates
Percent
Source Federal Reserve
5
Interest Rates Had Converged
Long-term government bonds
Source Bloomberg
6
U.S. Material Prices
7
Points of Perspective -- U.S. Construction
8
Major U.S. Construction Sectors (Starts)
9
U.S. Single Family Housing
10
Default Rates Highest In Midwest And South
Seriously Delinquent Rate, Q2
Source Mortgage Bankers Association
11
Indiana Single Family
12
U.S. Multifamily Housing
13
U.S. Income Prop.-- Multifamily Housing
Major metropolitan areas
Multifamily Housing Top 10 Metros -- ranked by
new dwelling units
Year 2007 YTD ch 07/06 1. New York
-49 2. Chicago -34 3.
Seattle 44 4. Miami
-54 5. Orlando FL 13 6.
Atlanta -10 7. Houston
41 8. Los Angeles -35 9.
Washington DC -19 10. Boston
1
Year 2006, ch 06/05 1. New York
-0- 2. Miami
-22 3. Chicago 27
4. Los Angeles 20
5. Dallas-Ft.Worth 32 6.
Washington DC -22 7. Atlanta
-13 8. Orlando FL 22
9. Seattle 41 10. Las
Vegas 22

14
Indiana Multifamily Housing
15
U.S. Commercial Bldgs. -- Stores
16
Borrowing Against Your Home
Source Freddie Mac
17
Indiana Retail
18
U.S. Commercial Bldgs.-- Hotels
19
U.S. Commercial Bldgs. -- Hotels
Recent Large Projects
20
Indiana Hotel
21
U.S. Commercial Bldgs. -- Offices
22
U.S. Commercial Bldgs. -- Offices
Office Building Factors
23
U.S. Commercial Bldgs. -- Offices
Major metropolitan areas
Office Buildings Top 10 Metros -- ranked by new
square feet
Year 2007 YTD, ch 07/06 1. Phoenix
27 2. Atlanta
48 3. Washington DC -16
4. Miami 35
5. Charlotte NC 152 6.
Chicago -10 7. Dallas-Ft.Worth
-0- 8. Houston 9
9. New York -36 10.
Seattle -24

Year 2006, ch 06/05 1. Washington DC 29
2. New York 63
3. Dallas-Ft. Worth 30 4.
Phoenix -12 5. Miami
17 6. Chicago
157 7. Atlanta
28 8. Houston 50
9. Seattle 336 10. Los
Angeles -4

24
Indiana Office
25
U.S. Macroeconomic Picture
26
U.S. Institutional -- Educational Bldgs.
2006 2007
YTD Primary, Jr. Highs 1 -7 High
Schools 15 -6 Colleges/Univ.
6 5 Libraries
-1 -7 Laboratories -24
20 Museums 2
-7 Comm. Colleges 43 -12 Vocational
Schools 35 -50
27
U.S. Institutional -- Educational Bldgs.
28
U.S. Institutional -- Educational Bldgs.
Educational Buildings Top 10 States -- ranked by
sq. ft. of new starts
Year 2007 YTD, ch 07/06 1. Texas
2 2. Florida -1 3.
Georgia 33 4. California
-12 5. North Carolina 3 6. Ohio
-33 7. Pennsylvania -27 8.
Illinois 2 9. New York
9 10. Arizona -12

Year 2006, ch 06/05 1. Texas
5 2. Florida
22 3. California 12
4. Ohio 18 5. Pennsylvania
61 6. Georgia -4
7. North Carolina 8 8. Illinois
2 9. Virginia 31 10.
Arizona 63

29
U.S. Institutional -- Educational Bldgs.
30
Indiana Education
31
U.S. Institutional -- Healthcare Buildings
32
U.S. Institutional Healthcare Buildings
Recent Large Projects
33
U.S. Institutional Healthcare Bldgs.
Healthcare Buildings Top 10 States -- ranked by
sq. ft. of new starts
Year 2007 YTD, ch 07/06 1. California
32 2. Florida -31 3. Texas
-42 4. Ohio -1 5.
Indiana -4 6. Illinois
-4 7. Michigan -6 8. Arizona
-3 9. Tennessee 24 10. Washington
16
Year 2006, ch 06/05 1. Texas
40 2. Florida
7 3. California -6
4. Indiana 50 5. New York
49 6. Ohio -38
7. Pennsylvania -3 8. Illinois
-1 9. Michigan -4 10.
Maryland 190

34
Indiana Healthcare
35
U.S. Institutional Buildings
36
Indiana Public ex Schools
37
U.S. Institutional Buildings
38
U.S. Manufacturing Buildings
39
Indiana Manufacturing
40
U.S. Public Works -- Highways Bridges
41
Indiana Highways
42
U.S. Public Works -- Environmental
43
Indiana Water Supply
44
U.S. Electric Utilities
45
U.S. Total Construction Starts for 2008
Billions of Dollars
2004 2005 2006 2007 2008 Total
Construction 593.0 668.9 682.5 626.7 614.1
11 13 2 -8 -2 Single Family
Housing 282.7 315.5 272.4 204.0 197.8 17 12
-14 -25 -3 Multifamily Housing
50.4 68.3 69.6 61.4 56.4 23 35 2 -12
-8 Commercial Bldgs. 67.2 72.0 91.4 97.3
91.1 14 7 27 7 -6
Institutional Bldgs. 89.1 99.7 109.8 114.0 118.
7 -1 12 10 4 4 Manufacturing
Bldgs. 8.0 10.0 13.3 18.6 16.5
17 24 33 40 -11 Public
Works 88.2 95.8 112.2 117.9 121.0
6 9 17 5 3
46
Indiana
47
Questions?
  • Cliff Brewis
  • Senior Director Editorial
  • McGraw-Hill Construction
  • Cliff_brewis_at_mcgraw-hill.com

48
Global Construction Industry Today
49
Relative Global Contributions
IMF purchasing power weights, 2006
E Europe 11
Other 20
U.S. 12
Other 17
U.S. 20
Eurozone 9
E Europe 7
Japan 3
Eurozone 15
India 6
India 11
Japan 6
Other Adv 7
China 15
China 30
Other Adv 11
Percent of World GDP
Percent of World Growth
Source IMF
50
The Global Construction Industry Today
  • 4.6 Trillion Global Construction Industry (2006)
  • More Than 100 Million Employed Worldwide
  • Contributes 10 of Global GDP

51
Worldwide Industry Facts
  • Buildings Account for
  • 17 of the Worlds Fresh Water
    Withdrawals
  • 25 of Its Wood Harvest
  • 33 Carbon Dioxide Emissions
  • 40 Material and Energy Use

52
China Construction Industry Today
Buildings in China Account for 45 of their
Material and Energy Use
Shanghai
Shanghai
  • China Growth Trends
  • Increased Urbanization
  • 21 Mega-Cities (Population Greater Than 5
    Million)
  • Chinese Firms Competing in U.S. Market

Beijing
Beijing
53
Productivity /Interoperability
54
Perception of Productivity in the U.S.
  • Increases in Productivity Broadly Influence
    Society
  • By Improving Standards and Creating Income

55
Interoperability
  • Lack of Interoperability Costs the U.S.
    Construction
  • Industry 15.8 Billion Every Year
  • Interoperability the Ability to Manage and
    Communicate Electronic Product and Project Data
    Among Collaborating Firms
  • It Will Become Critical to Long-Term Industry
    Success
  • ENR editorial (August 2004) Owners need to
    Demand Greater Interoperability

56
InteroperabilityImproving Information Exchange
Traditional Information Exchange
BIM Information Exchange
Source International Alliance for
Interoperability, 2007
57
InteroperabilityShift to Digital Design
Digital Design shifts the bulk of project work to
the Design phase to help coordinate building
systems and the project and manage project costs
Traditional Design
Digital Design
Effort
Time
Source International Alliance for
Interoperability, 2007
58
Sustainability /Green Building
59
Green Building Is Not a Fad It Is an
Industry Trend!
  • Projected Green Building Market Size

2010 up to 10 of building starts60
billion!
2005 2 of building starts 10 billion
60
Perceived Advantages of Building Green -
Commercial
  • Decreased Operating Costs 8-9
  • Increased Building Values 7.5
  • Improvement in ROI 6.6
  • Increased Occupancy 3.5
  • Rent Rise 3

61
Operational Improvements Make the Business Case
for Green Schools
  • Average expected decrease in operating costs 11
  • Average expected decrease in energy use
  • 8 - 9 for AEC/O community
  • 14 for school community
  • Average expected increase in building value 6
  • Other Research Evidence
  • Annual utility cost savings
  • 20 - 40 new
  • 20 - 30 renovated
  • Energy reductions of up to 40
  • Water reductions up to 30

School Building Energy Usage
62
Green Construction Sectors
U.S. Macroeconomic Picture
  • Sectors Expected to have Substantial Growth
  • AEC/Owner Community

Source McGraw-Hill Construction, 2005.
63
Green Buildings Today Will Become the Standard of
Tomorrow
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