By: Anirban Basu Sage Policy Group, Inc.
March 26th, 2014
Back to the Future Part II
On Behalf of
Office of Acquisition and Project Management
Raging Bull (1980)
Historic and Projected World Output Growth 2004 through 2015*
Source: International Monetary Fund
*2014-2015 data are projections
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
5.1% 4.7%
5.2% 5.3%
2.7%
-0.4%
5.2%
3.9%
3.1% 3.0%
3.7% 3.9%
An
nu
al %
Ch
an
ge
Real GDP Growth, 20 Fastest and Slowest Growing Countries Estimated 2013, Annual Percent Change (for available nations) Rank Country Region % Rank Country Region %
1 South Sudan Africa 24.7 169 Belgium Europe 0.1
2 Sierra Leone Africa 13.3 170 Denmark Europe 0.1
3 Turkmenistan Central Asia 12.2 171 Samoa Asia 0.1
4 Paraguay South America 12.0 172 Swaziland Africa 0.0
5 Mongolia Asia 11.8 173 Czech Republic Europe -0.4
6 Lao P.D.R. Southeast Asia 8.3 174 Croatia Eastern Europe -0.6
7 Liberia Africa 8.1 175 Finland Europe -0.6
8 Timor-Leste Southeast Asia 8.1 176 Barbados Caribbean -0.8
9 Côte d'Ivoire Africa 8.0 177 Spain Europe -1.3
10 Ghana Africa 7.9 178 Netherlands Europe -1.3
11 China Asia 7.6 179 Equatorial Guinea Africa -1.5
12 Panama Central America 7.5 180 Islamic Republic of Iran Middle East -1.5
13 Rwanda Africa 7.5 181 Portugal Europe -1.8
14 Kyrgyz Republic Central Asia 7.4 182 Italy Europe -1.8
15 Uzbekistan Central Asia 7.0 183 Slovenia Eastern Europe -2.6
16 Cambodia Southeast Asia 7.0 184 San Marino Europe -3.5
17 Ethiopia Africa 7.0 185 Greece Europe -4.2
18 Mozambique Africa 7.0 186 Libya Middle East -5.1
19 Tanzania Africa 7.0 187 Cyprus Europe -8.7
20 Myanmar Southeast Asia 6.8 188 Central African Republic Africa -14.5
*2013-2014 data are projections
Source: International Monetary Fund
Estimated Growth in Output by Select Global Areas 2013
1.2% 2.3% 2.6%
2.4% 4.4%
7.7% 6.5%
1.5% 2.5%
5.1% 5.3%
1.9% 1.7% 1.7% 1.7%
-1.2% -1.8%
0.5% 0.2%
-0.4% 1.3%
-4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
Mexico Brazil
Latin America and Caribbean Mid. East, N.Africa, Afghanistan & Pakistan
India* China
Developing Asia Russia
Central/eastern Europe Sub-Saharan Africa
Emerging/developing countries United States
Canada United Kingdom
Japan Spain
Italy Germany
France Euro area
Advanced economies
Annual % Change
Source: International Monetary Fund
*For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market
prices. Corresponding growth forecasts for GDP at factor cost are 4.6 percent for 2013.
Estimated Growth in Output by Select Global Areas 2014 Projected
3.0% 2.3%
3.0% 3.3%
5.4% 7.5%
6.7% 2.0%
2.8% 6.1%
5.9% 2.8%
2.2% 2.4%
1.7% 0.6% 0.6%
1.6% 0.9% 1.0%
2.2%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%
Mexico Brazil
Latin America and Caribbean Mid. East, N.Africa, Afghanistan & Pakistan
India* China
Developing Asia Russia
Central/eastern Europe Sub-Saharan Africa
Emerging/developing countries United States
Canada United Kingdom
Japan Spain
Italy Germany
France Euro area
Advanced economies
Annual % Change
Source: International Monetary Fund
*For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market
prices. Corresponding growth forecasts for GDP at factor cost are 4.6 percent for 2013.
Debt by Selected Country 2013 Estimates
0 50 100 150 200 250
Saudi Arabia
Russia
China
Indonesia
South Africa
Mexico
Argentina
India
Brazil
Germany
Canada
United Kingdom
France
Spain
United States
Italy
Japan
General Government Gross Debt in Percent of GDP
*IMF Staff Estimates
Source: International Monetary Fund
Rank Exchange Index % Change
4 Tokyo SE Nikkei 225 56.7%
2 Nasdaq NASDAQ Composite 38.3%
1 NYSE Group DJI A 26.5%
6 Frankfurt SE DAX 25.5%
8 Bolsa De Madrid Madrid General 21.4%
12 Swiss Exchange Swiss Market 20.2%
5 Euronext CAC 40 18.0%
10 BorsaItaliana FTSE MIB 16.6%
3 London SE FTSE 100 12.0%
9 TSX Group S&P TSX Composite 9.6%
11 Hong Kong Exchanges Hang Seng Index 2.9%
7 Shanghai SE Shanghai Composite -6.8%
Top 12 Stock Exchanges 2013 Growth*
Source: Yahoo! Finance
*Change from the 2012 close to the 2013 close.
S&P Select Sector Performance 12-Month Percent Change as of March 14, 2014
Source: Standard & Poor’s
-10% 0% 10% 20% 30%
Telecommunication Services
Utilities
Energy
Consumer Staples
Materials
Information Technology
Financials
Industrials
Health Care
Consumer Discretionary
-7.2%
7.1%
7.2%
8.8%
17.4%
20.6%
18.2%
21.0%
29.7%
24.4%
12-month percent change
Federal Reserve Balance Sheet v. S&P 500 Index May 2008 – March 2014
Source: Federal Reserve Bank; Yahoo Finance
S&P 500 index depicted in orange
500
700
900
1100
1300
1500
1700
1900
2100
0.8
1.3
1.8
2.3
2.8
3.3
3.8
4.3
4.8
May
-08
Ju
l-0
8
Sep
-08
N
ov-
08
Ja
n-0
9
Mar
-09
M
ay-0
9
Jul-
09
Se
p-0
9
No
v-0
9
Jan
-10
M
ar-1
0
May-1
0
Jul-
10
Sep
-10
N
ov-1
0
Jan
-11
Mar
-11
May
-11
Jul-
11
Sep
-11
No
v-1
1 Ja
n-1
2
Mar
-12
May
-12
Jul-
12
Sep
-12
No
v-12
Ja
n-1
3 M
ar-1
3 M
ay-1
3 Ju
l-13
Sep
-13
No
v-1
3 Ja
n-1
4
Mar
-14
S&P 500 FRB Credit Reserve $Trillions
Fourth Quarter Earnings for Select Corporations Earnings per Share
Symbol Q4 2012 Q4 2013
Estimated Q4 2013
Reported Surprise Symbol Q4 2012
Q4 2013 Estimated
Q4 2013 Reported
Surprise
CAT $1.46 $1.28 $1.58 $0.30 AMD -$0.14 $0.05 $0.06 $0.01
DOW $0.33 $0.43 $0.65 $0.22 XRX $0.30 $0.29 $0.29 $0.00
BTU $0.36 -$0.10 $0.00 $0.10 GE $0.44 $0.53 $0.53 $0.00
STI $0.65 $0.69 $0.77 $0.08 CMG $1.95 $2.53 $2.53 $0.00
YHOO $0.32 $0.38 $0.46 $0.08 COH $0.86 $0.98 $0.98 $0.00
UTX $1.04 $1.53 $1.58 $0.05 MMM $1.41 $1.62 $1.62 $0.00
DD $0.11 $0.55 $0.59 $0.04 UPS $1.32 $1.25 $1.25 $0.00
FCX $0.78 $0.80 $0.84 $0.04 TXN $0.36 $0.46 $0.46 $0.00
HON $1.10 $1.21 $1.24 $0.03 VFC $0.77 $0.84 $0.82 -$0.02
VZ $0.45 $0.65 $0.66 $0.01 MSFT $0.67 $0.75 $0.66 -$0.09
MCD $1.38 $1.39 $1.40 $0.01 COF $1.41 $1.55 $1.45 -$0.10
Source: Yahoo! Finance
Jobs -1.2%
Incomes 3.3%
Profits 44.7%
Housing -10.5%
Stocks 14.5%
-60%
-40%
-20%
0%
20%
40%
60%
2008 2009 2010 2011 2012 2013
Per
cen
t ch
ange
sin
ce e
nd
of 2
00
7
Top Gun (1986)
Profits out of the Danger Zone
Source: BEA, BLS, S&P Case-Shiller, Yahoo! Finance
Source: Moody’s Economy
Recession Watch as of December 2013
U.S. Natural Gas Gross Withdrawals
6-Month Moving Average November 2003 through November 2013
Source: U.S. Energy Information Administration
1,700,000
1,800,000
1,900,000
2,000,000
2,100,000
2,200,000
2,300,000
2,400,000
2,500,000
2,600,000 N
ov-
03
May
-04
No
v-0
4
May
-05
No
v-0
5
May
-06
No
v-0
6
May
-07
No
v-0
7
May
-08
No
v-0
8
May
-09
No
v-0
9
May
-10
No
v-10
May
-11
No
v-11
May
-12
No
v-12
May
-13
No
v-13
Vo
lum
e i
n M
illi
on
Cu
bic
Fe
et
November 2013: 2,558,123 MMcf
U.S. Oil Production
6-Month Moving Average November 2003 through November 2013
Source: U.S. Energy Information Administration
100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000 N
ov-
03
May
-04
No
v-0
4
May
-05
No
v-0
5
May
-06
No
v-0
6
May
-07
No
v-0
7
May
-08
No
v-0
8
May
-09
No
v-0
9
May
-10
No
v-10
May
-11
No
v-11
May
-12
No
v-12
May
-13
No
v-13
Th
ou
san
d B
arr
els
November 2013: 233,051K Barrels
U.S. Electricity Production by Source 2003 v. 2013 as of December
Coal 50.8% Petroleum
Liquids & Coke 3.1%
Natural Gas
16.7%
Nuclear 19.7%
Hydro -electric*
6.9%
Renewable sources,
other than hydro-
electric 2.0%
Other 0.8%
2003
Source: U.S. Energy Information Administration
*Net of hydroelectric pumped storage.
Coal 39.1%
Petroleum Liquids &
Coke 0.7%
Natural Gas
27.4%
Nuclear 19.4%
Hydro -electric*
6.5% Renewable
sources, other than
hydro -electric
6.2%
Other 0.6%
2013
Carbon Footprint* Comparison Across Fuel Source
Source: U.S. Energy Information Agency (2013) ‘Carbon Dioxide Emissions Coefficients’
* Carbon footprint is defined as amount of carbon dioxide (CO2) emissions.
** Btu = British Thermal Unit
0 50 100 150 200 250
Flared natural gas
Jet Fuel
Petroleum coke
Natural gas
Gasoline
Residual heating fuel
Coal
120.6
156.3
225.1
117
157.2
173.7
210.2
Pounds CO2 emitted for each million Btu
Industrial & Transportation Fuels
Residential & Non-industrial Businesses
Trends in Carbon Dioxide (CO2) Emissions 1990 - 2012
1990 (billion tons of CO2)
2000 (billion tons of CO2)
2012 (billion tons of CO2)
% growth 1990-2012
U.S. 4.99 5.87 5.19 4%
EU 27 4.32 4.06 3.74 -13%
Australia 0.27 0.36 0.43 59%
Canada 0.45 0.55 0.56 24%
China 2.51 3.56 9.86 293%
Japan 1.16 1.28 1.32 14%
Asian Tigers* 0.71 1.31 1.91 169%
India 0.66 1.06 1.97 198%
Brazil 0.22 0.35 0.46 109%
Source: PBL Netherlands Environmental Assessment Agency, “Trends in global CO2 emissions: 2013 Report” (p.16)
* ‘Asian Tigers’ include Indonesia, Singapore, Malaysia, Thailand, South Korea, and Taiwan
Industrial Production January 2001 through February 2014
Source: Federal Reserve
The industrial production index measures the real output of the manufacturing, mining, and electric and gas utilities industries.
80
85
90
95
100
105
Jan
-01
May
-01
Sep
-01
Jan
-02
May
-02
Sep
-02
Jan
-03
May
-03
Sep
-03
Jan
-04
M
ay-0
4
Sep
-04
Ja
n-0
5 M
ay-0
5 S
ep-0
5 Ja
n-0
6
May
-06
S
ep-0
6
Jan
-07
May
-07
Sep
-07
Jan
-08
M
ay-0
8
Sep
-08
Ja
n-0
9
May
-09
S
ep-0
9
Jan
-10
M
ay-1
0
Sep
-10
Ja
n-1
1 M
ay-1
1 S
ep-1
1 Ja
n-1
2 M
ay-1
2 S
ep-1
2 Ja
n-1
3 M
ay-1
3 S
ep-1
3 Ja
n-1
4
Ind
ex
(20
07
= 1
00
)
(Base year: 2007)
Gross Domestic Product 1990Q1 through 2013Q4*
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Pe
rce
nt
Ch
an
ge
fro
m P
rece
din
g P
eri
od
(S
AA
R)
2013Q4: 2.4%
Source: Bureau of Economic Analysis
*Second Estimate
Contributions to GDP Growth by Component Q4 2012 – Q4 2013
Source: Bureau of Economic Analysis
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Personal Consumption
Government Spending
Net Exports Gross Investment
1.1
-1.3
0.7
-0.4
1.5
-0.8
-0.3
0.7
1.2
-0.1 -0.1
1.4 1.4
0.1 0.1
2.6
1.73
-1.05
0.99 0.72
SA
AR
(%
)
Q4-12 Q1-13 Q2-13 Q3-13 Q4-13
Ordinary People (1980)
-1000
-800
-600
-400
-200
0
200
400
600 Ja
n-0
2
Jun
-02
No
v-0
2
Ap
r-0
3
Sep
-03
Feb
-04
Jul-
04
Dec
-04
May
-05
Oct
-05
Mar
-06
Au
g-0
6
Jan
-07
Jun
-07
No
v-0
7
Ap
r-0
8
Sep
-08
Feb
-09
Jul-
09
Dec
-09
May
-10
Oct
-10
Mar
-11
Au
g-1
1
Jan
-12
Jun
-12
No
v-12
Ap
r-13
Sep
-13
Feb
-14
Th
ou
san
ds
Source: Bureau of Labor Statistics
February 2014: +175K
Net Change in U.S. Jobs, BLS January 2002 through February 2014
National Nonfarm Employment by Industry Sector February 2013 v. February 2014
-42
-32
30
33
61
61
152
337
404
486
668
-200 0 200 400 600 800
Information
Government
Mining and Logging
Other Services
Financial Activities
Manufacturing
Construction
Education and Health Services
Leisure and Hospitality
Trade, Transportation, and Utilities
Professional and Business Services
Thousands, SA
All told 2,158 K Jobs gained
Source: Bureau of Labor Statistics
U.S. Year-over-year Percent Change: 1.7%
Employment Growth, U.S. States (SA) January 2013 v. January 2014 Percent Change
RANK STATE % RANK STATE % RANK STATE %
1 NEVADA 3.4 17 NORTH CAROLINA 1.7 34 IDAHO 0.9
2 NORTH DAKOTA 3.3 19 INDIANA 1.5 34 LOUISIANA 0.9
3 TEXAS 2.9 19 MASSACHUSETTS 1.5 34 MICHIGAN 0.9
4 COLORADO 2.7 19 MISSOURI 1.5 34 MISSISSIPPI 0.9
5 FLORIDA 2.6 19 MONTANA 1.5 39 DISTRICT OF COLUMBIA 0.5
5 OREGON 2.6 23 KANSAS 1.4 39 PENNSYLVANIA 0.5
7 UTAH 2.4 23 TENNESSEE 1.4 39 SOUTH DAKOTA 0.5
8 ARIZONA 2.2 25 IOWA 1.3 42 ILLINOIS 0.4
9 CALIFORNIA 2.1 25 NEW YORK 1.3 42 NEW HAMPSHIRE 0.4
9 HAWAII 2.1 25 OHIO 1.3 44 MARYLAND 0.3
11 MINNESOTA 2.0 25 RHODE ISLAND 1.3 45 CONNECTICUT 0.2
11 SOUTH CAROLINA 2.0 29 VERMONT 1.2 46 ALASKA 0.1
11 WISCONSIN 2.0 29 WYOMING 1.2 46 NEW JERSEY 0.1
14 GEORGIA 1.9 31 ARKANSAS 1.1 48 VIRGINIA 0.0
15 OKLAHOMA 1.8 31 MAINE 1.1 49 WEST VIRGINIA -0.2
15 WASHINGTON 1.8 31 NEBRASKA 1.1 50 KENTUCKY -0.3
17 DELAWARE 1.7 34 ALABAMA 0.9 50 NEW MEXICO -0.3
Source: Bureau of Labor Statistics
U.S. Unemployment Rate: 6.6%
Unemployment Rates, U.S. States (SA) January 2014
RANK STATE % RANK STATE % RANK STATE %
1 NORTH DAKOTA 2.6 18 MARYLAND 5.8 34 NEW YORK 6.8
2 NEBRASKA 3.5 19 WEST VIRGINIA 5.9 36 OHIO 6.9
3 SOUTH DAKOTA 3.6 20 MISSOURI 6.0 37 OREGON 7.0
4 UTAH 3.9 21 ALABAMA 6.1 38 NEW JERSEY 7.1
5 VERMONT 4.0 21 COLORADO 6.1 39 CONNECTICUT 7.2
6 IOWA 4.3 21 DELAWARE 6.1 39 TENNESSEE 7.2
6 WYOMING 4.3 21 FLORIDA 6.1 41 ARKANSAS 7.3
8 HAWAII 4.6 21 WISCONSIN 6.1 41 GEORGIA 7.3
9 MINNESOTA 4.7 26 MAINE 6.2 43 DISTRICT OF COLUMBIA 7.4
10 KANSAS 4.8 27 ALASKA 6.4 44 ARIZONA 7.5
11 LOUISIANA 4.9 27 INDIANA 6.4 44 MISSISSIPPI 7.5
11 NEW HAMPSHIRE 4.9 27 PENNSYLVANIA 6.4 46 KENTUCKY 7.7
13 VIRGINIA 5 27 SOUTH CAROLINA 6.4 47 MICHIGAN 7.8
14 OKLAHOMA 5.2 27 WASHINGTON 6.4 48 CALIFORNIA 8.1
15 MONTANA 5.3 32 NEW MEXICO 6.6 49 ILLINOIS 8.7
16 IDAHO 5.4 33 NORTH CAROLINA 6.7 49 NEVADA 8.7
17 TEXAS 5.7 34 MASSACHUSETTS 6.8 51 RHODE ISLAND 9.2
Source: Bureau of Labor Statistics
Unemployment Rates, 20 Largest Metros (NSA) December 2013
Rank MSA UR Rank MSA UR
1 Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area 4.3 11
Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area 6.2
2 Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area 4.6 12
San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area 6.4
3 Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area 5.4 12
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metropolitan Statistical Area 6.4
3 Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area 5.4 14
St. Louis, MO-IL Metropolitan Statistical Area 6.6
5 Houston-Sugar Land-Baytown, TX Metropolitan Statistical Area 5.5 14
New York-Northern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area 6.6
6 San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area 5.6 16
Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical Area 6.8
7 Boston-Cambridge-Quincy, MA-NH Metropolitan NECTA 5.9 17
Los Angeles-Long Beach-Santa Ana, CA Metropolitan Statistical Area 7.9
7 Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area 5.9 18
Detroit-Warren-Livonia, MI Metropolitan Statistical Area 8.0
7 Baltimore-Towson, MD Metropolitan Statistical Area 5.9 19 Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area 8.3
10 Miami-Fort Lauderdale-Pompano Beach, FL Metropolitan Statistical Area 6.0 20
Riverside-San Bernardino-Ontario, CA Metropolitan Statistical Area 8.9
Source: Bureau of Labor Statistics
Field of Dreams (1989)
15-Year & 30-Year Fixed Mortgage Rates February 1995 through March 2014
Source: Freddie Mac
3.38%
4.37%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Feb
-95
Au
g-9
5
Feb
-96
Au
g-9
6
Feb
-97
Au
g-9
7
Feb
-98
Au
g-9
8
Feb
-99
Au
g-9
9
Feb
-00
Au
g-0
0
Feb
-01
Au
g-0
1
Feb
-02
Au
g-0
2
Feb
-03
Au
g-0
3
Feb
-04
Au
g-0
4
Feb
-05
Au
g-0
5
Feb
-06
Au
g-0
6
Feb
-07
Au
g-0
7
Feb
-08
Au
g-0
8
Feb
-09
Au
g-0
9
Feb
-10
Au
g-1
0
Feb
-11
Au
g-1
1
Feb
-12
Au
g-1
2
Feb
-13
Au
g-1
3
Feb
-14
Rate
15-yr 30-yr
U.S. New Home Sales January 1999 through January 2014
Source: Economy.com, Census Bureau
January 2014 468K
0
200
400
600
800
1,000
1,200
1,400
1,600
Th
ou
san
ds,
SA
AR
U.S. Housing Building Permits February 1999 through February 2014
Source: Census Bureau
0
500
1,000
1,500
2,000
2,500
Feb
-99
Ju
n-9
9
Oct
-99
Fe
b-0
0
Jun
-00
O
ct-0
0
Feb
-01
Jun
-01
Oct
-01
Feb
-02
Jun
-02
Oct
-02
Feb
-03
Jun
-03
Oct
-03
Feb
-04
Ju
n-0
4
Oct
-04
Fe
b-0
5 Ju
n-0
5 O
ct-0
5 Fe
b-0
6
Jun
-06
O
ct-0
6
Feb
-07
Jun
-07
Oct
-07
Feb
-08
Ju
n-0
8
Oct
-08
Fe
b-0
9
Jun
-09
O
ct-0
9
Feb
-10
Ju
n-1
0
Oct
-10
Fe
b-1
1 Ju
n-1
1 O
ct-1
1 Fe
b-1
2 Ju
n-1
2 O
ct-1
2 Fe
b-1
3 Ju
n-1
3 O
ct-1
3 Fe
b-1
4
Th
ou
san
ds,
SA
AR
1 Unit 5 units or more
February 2014: 1 Unit: 588K 5 Units or more: 407K
0%
5%
10%
15%
20%
25%
30%
6.3% 8.1%
9.0% 9.7% 10.2% 11.3%
13.4%
16.5% 16.6% 18.1%
20.3%
22.6%
25.5%
12-M
on
th %
Ch
ange
S&P/Case-Shiller Home Price Indices for Select Metros December 2013, 12-Month Percentage Change
Source: Standard & Poor’s
Source: The American Institute of Architects
Architecture Billings Index January 2008 through February 2014
30
35
40
45
50
55
Jan
-08
Jun
-08
No
v-0
8
Ap
r-0
9
Sep
-09
Feb
-10
Jul-
10
Dec
-10
May
-11
Oct
-11
Mar-
12
Au
g-12
Jan
-13
Jun
-13
No
v-1
3
February 2014: 50.7
Nonresidential Construction Put-in-Place December 2006 through January 2014
0
100
200
300
400
500
600
700
800 D
ec-0
6
Mar
-07
Jun
-07
Sep
-07
Dec
-07
Mar
-08
Jun
-08
Sep
-08
Dec
-08
Mar-
09
Jun
-09
Sep
-09
Dec
-09
Mar
-10
Jun
-10
Sep
-10
Dec
-10
Mar-
11
Jun
-11
Sep
-11
Dec
-11
Mar
-12
Jun
-12
Sep
-12
Dec
-12
Mar
-13
Jun
-13
Sep
-13
Dec
-13
SA
AR
($b
illi
on
s)
Public
Private
Source: U.S. Census Bureau
Dec. 08: $697.4 billion Jan. 14: $578.7 billion
-17.0%
National Nonresidential Construction Spending by Subsector January 2013 v. January 2014
-12.1
-7.9
-4.6
-4.5
-4.0
-2.0
-0.2
2.0
2.2
7.1
7.8
11.0
12.4
15.2
40.4
44.8
-35 -15 5 25 45
Religious
Water supply
Conservation and development
Health care
Amusement and recreation
Educational
Public safety
Power
Sewage and waste disposal
Manufacturing
Transportation
Office
Commercial
Highway and street
Communication
Lodging
12-month % Change
Source: U.S. Census Bureau
Inputs to Construction PPI January 2001 – February 2014
-10%
-5%
0%
5%
10%
15%
Jan
-01
May
-01
Sep
-01
Jan
-02
May
-02
Sep
-02
Jan
-03
May
-03
Sep
-03
Jan
-04
M
ay-0
4
Sep
-04
Ja
n-0
5
May
-05
Sep
-05
Jan
-06
M
ay-0
6
Sep
-06
Ja
n-0
7
May
-07
Sep
-07
Jan
-08
M
ay-0
8
Sep
-08
Ja
n-0
9
May
-09
Sep
-09
Ja
n-1
0
May
-10
Sep
-10
Ja
n-1
1 M
ay-1
1 Sep
-11
Jan
-12
May
-12
Sep
-12
Jan
-13
May
-13
Sep
-13
Jan
-14
12-m
on
th P
erc
en
t C
ha
ng
e
Source: Bureau of Labor Statistics
Construction Materials PPI 12-month % Change as of February 2014
Source: Bureau of Labor Statistics
-15% -5% 5% 15%
Nonferrous metals
Plywood
Asphalt felts and coatings
Fabricated structural metal products
Glass
Softwood lumber
Clay construction products ex. refractories
Concrete products
Iron and steel
Prefabricated wood structural members
Gypsum products
-7.1%
-2.8%
-1.3%
0.4%
0.8%
1.2%
2.1%
3.7%
4.3%
4.7%
11.6%
The Shining (1980)
Conference Board Leading Economic Indicators Index August 2007 through February 2014
Source: Conference Board
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5% A
ug
-07
No
v-0
7
Feb
-08
May
-08
Au
g-0
8
No
v-0
8
Feb
-09
May
-09
Au
g-0
9
No
v-0
9
Feb
-10
May
-10
Au
g-1
0
No
v-10
Feb
-11
May
-11
Au
g-1
1
No
v-11
Feb
-12
May
-12
Au
g-1
2
No
v-12
Feb
-13
May
-13
Au
g-1
3
No
v-13
Feb
-14
On
e-m
on
th P
erc
en
t C
ha
nge
February 2014 = 99.8 where 2004=100
Coming to America (1988)
• Economy gained momentum over the course of last year;
• Tailwinds included booming stock market, lower gasoline prices, stabilizing global economy, and consumer expenditures on interest rate sensitive durable goods like housing and autos;
• The current year is associated with greater certainty regarding federal budgeting and monetary policy – that helps;
• The world is not perfect - black swan threats remain: (1) Iran (2) Israel/Iran (3) Europe (4) contagion (5) cyber (6) EMP;
• Healthcare reform could slow full-time hiring over the course of the year; and
• Regions with rapid population growth and/or significant import/export activity, industrial output and energy production will lead the way.
Thank You
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