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Digging into Construction Data
NABE Real Estate/Construction Roundtable
webinar, April 8, 2010Ken Simonson, Chief Economist
AGC of Americasimonsonk@agc.org
Economic impact of nonresidential construction
• Jobs: 28,500 per $1 billion• 1/3 direct, onsite construction• 1/6 indirect (quarries, mfg., services)• 1/2 “induced” by spending from higher
earnings of construction, indirect workers and owners
• GDP: $3.4 billion
• Personal Earnings: $1.1 billion
2
Source: Prof. Stephen Fuller, George Mason University
Construction Spending, 2000-2009
Source: Census Bureau, Bureau of Economic Analysis
$16,000
$15,000
$14,000
$13,000
$12,000
$11,000
$10,000
$2,000
$1,000
$0
Construction
GDP
GDP and Construction Spending(SAAR Annual Level, $ in billions)
Construction as a % of GDP
4
Private Nonresidential ($303b, -0.4%, -24%)
Public ($293b, -1.7%, -5%)
Private Residential ($251b, -2.1%, -3.8%)
Source: Census Bureau
1000
950
900
850
450
400
350
300
250
200
Total Construction ($846b, -1.3%, -13%)
Construction spending by segment, 1- & 12-month changeSeasonally adjusted annual rate (SAAR)
Single-family (SF) vs. multifamily (MF)
vs. 1/10 vs.
2/09 SF 0% 4% Improvements -4% 4%
MF 0% -52%
5
Permitsvs. 1/10 vs. 2/09
SF ▬▬▬ 0% 32%
MF ▬▬▬ -8% -36%
Starts
SF ▬ ▬ ▬ 0% 40%
MF ▬ ▬ ▬ -30% -65%
Housing outlook
• SF: starts, permits should rise throughout ‘10• MF: No improvement likely until ‘11
- Rental demand hurt by job losses among would-be renters and by first-time homebuyer credit- Supply swelled by owners and banks who are trying to rent out houses and condos- Banks remain unwilling to lend to developers
Source: Author
6
Nonres totals (billion $, SAAR), share, 1- & 12-month change
2/10 Total Share vs. 1/10 vs. 2/09
Nonresidential $588 billion 100
% -1% -
16%
Educational 92 16 - 1 - 13 Power 88 15 + 1 + 5 Highway and street 80 14 - 2 - 2 Manufacturing 53 9 + 3 - 35 Commercial 45 8 - 3 - 36 Office 44 7 - 3 - 31 Health care 41 7 - 2 - 15 Transportation 35 6 0 + 12 Sewage and waste disposal 24 4 - 5 - 3 Communication 20 3 + 1 0 Amusement and recreation 16 3 - 2 - 23 Other (lodging; water, public safety; conservation; religious): 9% of total
7
Source: Census Bureau
Construction spending: industrial, heavy (billion $, SAAR) 2008, 2009, 2010
8
9
Construction spending: public works (billion $, SAAR)
2008, 2009, 2010
10
Construction spending: institutional (private + state/local) 2008, 2009, 2010
11
Construction spending: developer-financed (billion $, SAAR) 2008, 2009, 2010
Predictors of construction demand
12
Architecture & engineering services empl.
Source: American Institute of Architects, BLS
Summary for 2010
• Nonres spending: 0 to -5% (more stimulus put in place, maybe gains in retail, higher ed, hospitals)
• Res: +5 to +10% (SF up, MF down all year)
• Total construction spending: -4% to +2%
• Materials costs: 0% to +8%
• Labor costs: +3% or less
13
Source: Author
AGC economic resources (email simonsonk@agc.org)
• The Data DIGest: weekly one-page email (sign up: www.agc.org/datadigest)
• PPI tables: emailed monthly
• State and metro data
• Stimulus info: www.agc.org/stimulus
• Webinars (May 4 w/ AIA, Reed)
• Feedback on stimulus, credit, costs
14
NABE - Setting the pace in business economics• Professional Development Seminar: DC,
4/12-14• Housing and construction session
• Annual meeting: Denver, 10/9-12• Real Estate/Construction Roundtable
• Webinars, annual & spring meeting programs
• Statistics Committee
…much more at www.nabe.com
15
Source: Prof. Stephen Fuller, George Mason University
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