Cliff Brewis

Vice President Operations

Dodge Data & Analytics

DODGE CONSTRUCTION FORECASTMID YEAR 2015

U.S. Macroeconomic Outlook

2

First quarter has often been soft.

GDP Pattern:

History Forecast

2010 2011 2012 2013 2014 2015

+2.5% +1.6% +2.3% +2.2% +2.2% +2.3%

Shape of Recovery:

• Periods of moderate expansion have been followed by deceleration.

• Strength of Dollar complicates US Growth

• Limited International Growth

• Actions of the Fed

U.S. Construction Market Outlook –

3

The Dodge Momentum Index offers insight on what’s ahead.

4

U.S. Construction Market Outlook –Percent Change, 2010-2015, for Total Construction Starts and Major Sectors.

. History Forecast

2014 Value

40% ofTotal Const.

36% ofTotal Const.

24% ofTotal Const.

Residential- Single Family- Multifamily

Nonresidential

- Offices- Hotels- Warehouses- Stores- Education

- Healthcare- Other Institutional- Manufacturing

Nonbuilding- Highways & Bridges

- Environmental Public Works- Other Public Works

- Electric Utilities

Arizona: Single Family Housing

5

Recovering but far below early 2000’s pace.

Arizona: Multifamily Housing

6

Very healthy sector but showing sings of leveling off.

Arizona: Office Buildings

7

Conservative level of recovery.

Arizona: Hotels

8

Conservative recovery.

Arizona: Retail

9

Are you noticing a trend on the private side: conservative investment.

Arizona: Warehouses

10

Expanding more rapidly than retail.

Arizona: Educational Buildings

11

The decline for the educational building category has ended, now turning up.

Arizona: Healthcare Buildings

12

Healthcare is surrounded by uncertainty.

Arizona: Highways

13

Difficult to find sources of funding.

Arizona:

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($'000.00) 2007 2008 2009 2010 2011 2012 2013 2014 2015

EDUC $1,102,206 $577,829 $444,949 $691,628 $566,271 $444,319 $548,442 $612,285 $687,147

-48% -23% 55% -18% -22% 23% 12% 12%

HEALTH $779,503 $784,690 $388,938 $358,976 $315,684 $398,334 $287,240 $251,952 $384,569

1% -50% -8% -12% 26% -28% -12% 53%

HIGHWAY $890,077 $852,796 $990,698 $849,940 $726,086 $647,620 $755,277 $667,961 $650,633

-4% 16% -14% -15% -11% 17% -12% -3%

HOTEL $355,099 $463,622 $18,854 $134,368 $119,959 $58,872 $58,263 $173,498 $174,634

31% -96% 613% -11% -51% -1% 198% 1%

MFG $257,113 $343,147 $706,975 $218,889 $1,753,078 $345,046 $13,525 $24,745 $22,312

33% 106% -69% 701% -80% -96% 83% -10%

MULTI RES $1,205,499 $730,047 $115,461 $227,319 $277,718 $615,423 $828,942 $1,045,997 $1,088,958

-39% -84% 97% 22% 122% 35% 26% 4%

OFFICE $1,115,293 $723,912 $302,514 $426,872 $229,822 $249,896 $512,035 $341,901 $393,876

-35% -58% 41% -46% 9% 105% -33% 15%

ONEFAM $7,788,395 $4,052,647 $2,894,289 $2,566,026 $2,584,841 $4,259,111 $4,868,542 $4,703,973 $5,086,143

-48% -29% -11% 1% 65% 14% -3% 8%

PUB $362,462 $208,165 $535,152 $288,883 $261,040 $257,278 $149,733 $52,850 $92,354

-43% 157% -46% -10% -1% -42% -65% 75%

RETAIL $1,138,704 $725,188 $302,489 $213,590 $248,146 $288,349 $284,066 $263,560 $301,879

-36% -58% -29% 16% 16% -1% -7% 15%

WARENM $704,467 $526,372 $148,717 $97,814 $180,309 $250,487 $337,936 $254,559 $320,427

-25% -72% -34% 84% 39% 35% -25% 26%

WATER $461,259 $254,641 $264,106 $262,200 $340,783 $309,008 $116,636 $167,122 $250,916

-45% 4% -1% 30% -9% -62% 43% 50%

TOTAL $19,698,402 $12,488,026 $9,648,346 $8,996,613 $11,033,215 $10,414,195 $10,054,868 $10,310,102 $11,767,142-37% -23% -7% 23% -6% -3% 3% 14%

Points of Perspective

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CyclicalTroughs

1975

1982

1991

2011

Questions

• Cliff Brewis• Vice President Operations• Dodge Data and Analytics• Cliff.brewis@construction.com

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