Cumming Insights 2023-Q1 Market Overview - v6

Q1
CUMMING
INSIGHTS
Construction Market Analysis
1
Copyright © 2023 Cumming Management Group, Inc.
Summary
U.S. CONSTRUCTION MARKET OVERVIEW

Q1 2023
The United States has had a lot of good regulators headaches. There is no formal
news lately. Inflation is falling (although definition of a recession. Instead, it is decided
prices remain stubbornly high), and by the National Bureau of Economic Research,
unemployment remains lower than at which uses various data points to determine
any point in the last 70 years. Information when one starts and ends. This is normally a
that seemed to be contradictory over straightforward process, but because of these CHRIS WILSON DREW LANTZ XINYAO WANG
2022 has begun to paint a clearer picture conflicting data points, they have instead
of the national economy. While it is still chosen to wait before making a call. Here at Senior Director Research Analyst Research Analyst
early, it appears that concerns about a Cumming, we forecast that as inflation falls, cwilson@cumming-group.com dlantz@cumming-group.com xwang@cumming-group.com
deep recession or runaway inflation were unemployment will rise -- but this will be sector
unfounded. Still, regulators are keeping a by sector, as there is still a shortage in the
close eye on each piece of incoming data. construction industry driving high labor costs.
We expect that inflation will settle at 3-4% and
Inflation has begun to slow as the Federal unemployment at 4-5% by the end of 2023.
TOTAL CONSTRUCTION MARKET FORECAST

Reserve raises its interest rates. It remains This is not ideal – economists typically target
near record highs but is trending downwards 2% for both inflation and unemployment – but
without the corresponding drop in spending it is a far cry from the deep recession that some (xTotal
$1M, Construction Market Forecast (x $1m, Nominalized 2014$)
Nominalized 2014)
that many feared. Tightening monetary were forecasting.
$1,200,000
policy has brought on a slowdown in housing
starts and sales in some markets but has not All of these factors have consequences for
been enough to temper demand and growth those of us in the construction industry, which $1,000,000
in places like Miami, New York, and Boston. typically moves in lockstep with the national
These markets are holding steady and economy. Large-scale construction projects rely
maintain high costs of construction. As work on access to credit, labor, and materials – and $800,000
has continued to increase and contractors by this measure, the economy is still strong.
have filled their backlogs, they are no longer Our current economic moment is complicated, $600,000
absorbing the inflationary pressures as was and in some markets, restrictions on credit,
seen in downtimes like 2020. We expect labor, and materials are having an impact. This
inflation to continue to flatten or hold steady varies vastly from sector to sector and many $400,000
until commodities come back down and/or commercial deals can get the debt to shore
contractors feel the need to absorb costs to up equity losses from sales, CAP valuations,
$200,000
lock in future work. and retiring loans – but this is a struggle in the
commercial real estate sector. We continue
Still, different indicators are all forecasting to sound a note of caution for those in the 0
different things, and because of this, industry. We have seen markets change with 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
experts are making wildly different claims high volatility since 2020, and while this
Residential Non-Residential Forecast Residential Forecast Non-Residential
about the state of the economy. Experts seems to be taming, we expect this volatility to
can credibly say that the economy is both continue. SOURCE: IHS Market
booming and in recession, and this is giving
2
TABLE OF CONTENTS
U.S. Construction Market Overview Q1 2023.............................................. 2

The Construction Market at a Glance.............................................................. 4
U.S. Construction Volume.............................................................................................................. 5
Construction Employment............................................................................................................. 6
AIA Architectural Billings Index (ABI)........................................................................................ 7
Material Price Trends............................................................................................. 8
Domestic Materials.......................................................................................................................... 9
Commodities ............................................................................................................................... 10
National Indicators................................................................................................ 11
Unemployment............................................................................................................................... 12
U.S. Annual Gross Domestic Product (GDP)........................................................................ 13
Consumer Price Index (CPI)....................................................................................................... 14
10-Year Treasury Notes ............................................................................................................. 15
Energy ............................................................................................................................... 16
Credit Markets......................................................................................................................... 17
Lending Activity............................................................................................................................. 18
Currency ........................................................................................................................................... 19
Regions: West.......................................................................................................................... 20
Regions: Central..................................................................................................................... 30
Regions: East............................................................................................................................ 37
3
CONSTRUCTION
MARKET AT A GLANCE
4
The Construction Market at a Glance
U.S. CONSTRUCTION Total Construction Market Volume by Sector (x $1m, Nominalized 2012$) “The overall
VOLUME
2017 2018 2019 2020 2021 2022 2023 2024 market is set
to contract by
The national construction market managed Total Increase Y-O-Y % 0.99% -0.16% 0.76% 5.22% -0.51% -4.91% -3.29% 2.63%
to remain steady throughout the pandemic
but is expected to taper off as the economy Residential Y-O-Y % 8.00% -1.38% -4.86% 13.28% 12.66% 1.59% -8.23% 4.71%
cools and there is a continuation of the pre-

pandemic economic headwinds. Forecasts
Commercial
Manufacturing
Y-O-Y %
Y-O-Y %
3.40%
-13.30%
1.89%
-1.96%
0.36%
5.72%
-0.77%
-9.59%
-11.12%
-0.86%
-9.60%
5.55%
-5.64%
4.59%
-7.51%
-5.39%
about 3% this
year, as economic
for the next few years are smaller than they
were for the last several years. The overall Healthcare Y-O-Y % 5.00% -3.12% 1.79% 2.50% -4.49% -8.48% -6.51% 1.94%
market is set to contract by about 3% this Education Y-O-Y % 2.90% 0.55% 2.49% -0.72% -15.26% -16.98% -0.72% 4.61%
year, as economic uncertainty has made
owners reluctant to begin new projects and
Other Structure* Y-O-Y % 5.70% 1.32% 1.34% 7.43% -13.23% -13.66% -3.04% 1.43%
uncertainty has
made owners
the availability of credit tightens in certain Infrastructure Y-O-Y % -8.90% 1.04% 8.35% 1.54% -7.99% -11.76% 7.05% 5.04%
HISTORIC FORECAST
markets. A notable exception is the advanced
manufacturing sector, which continues to
reluctant to begin
grow as many manufacturers move back to
the US. Interest rate hikes from the Federal
Reserve have brought on a slowdown in Annual (x $1m, Nominalized 2012$)
housing transactions in many cities however
in other areas there remains a large unmet $1,200,000 new projects and
the availability of
demand for quality housing. We expect
several trends to shift spending around the
market as industry stakeholders (debt and $1,000,000
equity lenders, capital investors, developers,
and institutional investors) re-diversify their credit tightens in
certain markets.”
construction investments away from office $800,000
space to other sectors, and rebalance their
portfolios away from construction and real
estate. As offices in downtowns across the
$600,000
country remain less than half full, cities are
looking at turning unoccupied spaces into
mixed-use projects. The Inflation Reduction
Act sets aside billions of dollars to revitalize $400,000
American infrastructure, which will likely
cause that sector to grow through the end of
the decade. $200,000
0
2017 2018 2019 2020 2021 2022 2023 2024
Residential Commercial Manufacturing Healthcare Education Other Struct Infrastructure
5
SOURCE: IHS Market
SOURCE: IHS-Markit
1,000
1,000 1.33%
1.33%
00 00
2009
2009 2010
2010 2011
2011 2012
2012 2013
2013 2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019
2019 2020
2020 2021
2021 2022
2022
Trade
Trade Workers
Workers Unemployment
Unemployment Rate
Rate
CONSTRUCTION
National Construction Employment (2009-2022) %
% of
of Contractors
Contractors Having
Having Increased
Increased Difficulty
Difficulty Filling
Filling Craft
Craft Positions
Positions in
in 2020
2020 over
over 2019
2019
EMPLOYMENT
9,000 12% 90%
90%
The construction industry has long faced a
8,000 10.67% 80%
80%
generational challenge in finding talent. The
7,000 9.33% 70%
70% pandemic exacerbated this by forcing many
6,000 8% 60%
older workers out of the labor force. It also,
60%
conversely, brought renewed attention to the
Unemployment Rate
5,000 6.67%
Trade Workers
50%
50%
trades from young people. The trades have
4,000 5.33% 40%
40% increasingly been viewed as a strong career
3,000 4% 30%
option for many as they also command high
30%
wages. With a slowdown in certain markets,
2,000 2.67% 20%
20% active recruitment, and comprehensive
(x1000)
1,000 1.33% 10%

10% training programs in place, we expect this
0 0 00
to translate into an increase in construction
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 workers, likely concentrated among trades
uui i CCaa rerersrs
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eenn eer r
EEl l rkreker r
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where shortages were most acute in 2020
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etet ldldee
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and 2021.
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Trade Workers Unemployment Rate
ff
PPi i
EEqq
SOURCE:
SOURCE:
SOURCE: Currently, 88% of the construction sector’s
% of Contractors Having Increased Difficulty Filling Craft Positions in 2020 over 2019 U.S.
U.S. Bureau
U.S. Bureau of
Bureau of Labor Statistics
Labor Statistics
Statistics
AGC Labor Survey - 2018
AGC
workforce is white and 89% is male,
AGC Labor
Labor Survey
Survey -- 2018
2018
according to a 2022 McKinsey report.
90%
Attracting more diverse talent as quickly as
80% possible is imperative, and we are seeing
“Attracting more diverse talent as quickly

70% companies heavily invest in DEI strategies
and attracting talent for underserved
60%
communities including from overseas.
as possible is imperative, and we are seeing

50% Recently, officials from the Association
40% of General Contractors called on the
government to allow employers to sponsor
companies heavily invest in DEI strategies and

30%
more foreign-born workers and support
20% increased career and technical education
attracting talent for underserved communities

10% to broaden options for workers to hone
construction skills.
0
including from overseas.”

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SOURCE:
U.S. Bureau of Labor Statistics
AGC Labor Survey - 2018
6
Rate
SOURCE: American Institute of Architects
AIA ARCHITECTURAL BILLINGS INDEXAIA(ABI)

Architectural Billings Index - National (2016-Current)
AIA Architectural Billings Index - Regional (12 Months)
60
66
The American Institute of Architects’ Architectural Billings Index (ABI) is 55 The Midwest saw the highest value at 51.6 which was to be expected due
a good leading indicator of growth in the construction industry. Any score to the migration flows we have seen since the start of the pandemic, along 61
50
over 50 indicates an increase in billings relative to the previous month with the Southeast continuing to be a very strong market. All three sectors 55
(and therefore an increase in construction activity) while a score below 50 45 measured – commercial/industrial, institutional, and residential – are expected
50
indicates a decline. The most recent ABI score is 49.3, indicating a modest to contract as well, registering values of 46.8, 48.6, and 45.9 respectively. The
40
decline going forward. This marks the first time the index has contracted since residential market has cooled off with increased interest rates, but expanded 44
the end of 2020. 35 infrastructure spending should be expected to continue as the Nation’s 39
infrastructure is long overdue for improvements.

30 33
28
25
Jan 2015
Apr 2015
Jan 2016
Oct 2015
Apr 2016
Jul 2015
Jul 2016
Oct 2016
Jan 2017
Apr 2017
Jan 2019
Jul 2017
Oct 2017
Jan 2018
Apr 2018
Apr 2019
Jan 2020
Jul 2018
Oct 2018
Jul 2019
Oct 2019
Apr 2020
Jul 2020
Oct 2020
Jan 2021
Apr 2021
Jul 2021
Oct 2021
Jan 2022
Apr 2022
Jul 2022
Oct 2022
Jan 2023
22
21
2
8
19
20
9
9
19
9
20
0
21
1
22
2
22
2
23
02
02
02
02
01
01
01
01
01
02
02
02
02
02
02
02
02
20
20
20
20
20
20
20
20
20
r2
y2
l2
v2
v2
r2
y2
l2
v2
r2
y2
l2
v2
r2
y2
l2
v2
n
n
p
p
n
Ju
Ju
Ju
Ju
Ma
Ma
Ma
Ma
No
Ma
No
Ma
No
Ma
No
Ma
No
Ja
Ja
Ja
Ja
Ja
Se
Se
Se
Se
Rate
West South Northeast Midwest
NAT’L (2016-CURRENT) RATE REGIONAL

SECTOR
AIA Architectural Billings Index - National (2016-Current) AIA Architectural Billings Index - Regional (12 Months)
60 66 65
63
61
55 61 59
57
55 55
50 53
51
50 49
45 47
45
44
42
40 40
39 38
36
35 34
33 32
30
30
28 28
26
24
25
22 22
Jan 2015
Apr 2015
Jan 2016
Apr 2016
Apr 2017
Jan 2019
Apr 2019
Jul 2015
Oct 2015
Jul 2016
Oct 2016
Jan 2017
Jul 2017
Oct 2017
Jan 2018
Apr 2018
Jul 2018
Oct 2018
Jul 2019
Oct 2019
Jan 2020
Apr 2020
Jul 2020
Oct 2020
Jan 2021
Apr 2021
Jul 2021
Oct 2021
Jan 2022
Apr 2022
Jul 2022
Oct 2022
Jan 2023
Ja 18
Ma 19
Ma 19
Ju 9
Se 19
No 19
Ja 19
Ma 20
Ma 20
Ju 0
No 20
No 21
Ma 22
23
Se 20
Ja 20
Ma 21
Ma 21
Ju 1
Se 21
Ja 21
Ma 22
Ju 2
Se 22
No 22
Ja 22
No 21
Ma 19
Ma 19
Ju 9
Se 19
No 19
Ja 19
Ma 20
Ma 20
Ju 0
No 0
0
Ja 20
Ma 21
Ma 21
Ju 1
Ja 21
Ma 22
Ma 22
Ju 2
Se 22
No 22
Ja 22
23
8
01
02
02
02
02
01
01
02
2
02
02
02
20
20
0
20
0
20
20
20
20
0
0
20
0
20
0
20
20
20
0
20
0
20
20
0
20
0
20
0
20
0
20
r2
y2
l2
r2
v2
r2
y2
l2
v2
r2
y2
l2
v2
y2
l2
v2
r2
r2
y2
r2
v2
y2
l2
v2
r2
y2
l2
v2
l2
v2
y2
l2
v2
v
n
n
n
No
No
Ja
Se
Se
Rate West South Northeast Midwest Indus/Comm'l Institutional Residential
SOURCE:American
SOURCE: American Institute
Institute of Architects
of Architects SOURCE: American Institute of Architects SOURCE: American Institute of Architects

65
63
66 61
59
61 57
55
53
55 51
49
50
47 7
Copyright © 2023 Cumming Management Group, Inc. 45
42
44 40
38
MATERIAL
PRICE TRENDS
8
Copyright
Copyright
© 2022©Cumming
2023 Cumming
Management
Management
Group, Inc.
Group, Inc.
Material Price Trends
DOMESTIC
MATERIALS
Construction Materials Price Movement - Last 12 Months
Over the last year – particularly over the
summer – European governments scrambled
Prestressed concrete products 31.0% to find enough oil and natural gas to last
through the winter without relying on
Concrete pipe 21.4%
Russian exports. The United States stepped
Architectural coatings 15.8% in to help as well, and by August nearly
70% of our natural gas was being exported
Concrete block and brick 14.7%
to the European Union. American steel,
AC paving mixtures and blocks 14.7% concrete, and petrochemical manufacturers
had a hard time competing and were forced
Ready-mixed concrete 12.9%
to pass their higher costs onto consumers.
Brick and structural clay tile 12.9% Fortunately, winter has been milder than
many expected. This has eased some of the
Construction machinery & eqpmt 12.2%
pressure on commodities manufacturers and
Precast concrete products 11.1% caused prices to decline.
Gypsum products 10.7%

Expected manufacturing cost impacts from
Insulation materials 9.6% the conflict in Ukraine were not as extreme
as was initially forecast. In certain sectors
Flat glass 8.7% we saw manufacturing costs slow. Long-
Asphalt roofing & siding 7.3% term forecasts for commodities continue
to indicate a slowdown in materials price
Plastic construction products 7.0% escalation.
Sheet metal products 6.1%
Fabricated structural steel 3.2%
Metal bar joists & rebar -1.7%
Copper and brass mill shapes -4.5%
Aluminum mill shapes -6.1%
Steel pipe and tube -10.0%
Lumber and plywood -14.9%
-10% 0 10% 20% 30% 40%
SOURCE: US Bureau of Labor Statistics
Source: US Bureau of Labor Statistics
9
Source: IHS-Markit
Material Price Trends
COMMODITIES IHS-Markit Materials Price Index 2019- 2024(MPI-2002Q1=1.0) PPI, Inputs to Construction Industries, Goods, Annual Year-Over-Year Change
Declining demand in many markets has 5.0 25%

impacted commodity manufacturers. The IHS
Markit Material Price Index (MPI) has seen a 4.5 20%
modest decline relative to the end of 2022,
down roughly 6% from January 31st. This is 4.0 15%
primarily due to energy and shipping costs
Market Price Index (MPI)

– both of which are down significantly from 3.5 10%
% Change Y-O-Y
last summer. Energy costs have declined
almost 40% thanks to a mild winter (which 3.0 5%
we expand on further in the “energy” section
of this report), while shipping costs are 2.5 0
down a little over 20% due to the cooling
2.0 -5%
economy. Other commodities, however, have
experienced price increases due to supply
1.5 -10%
chain disruptions and increased demand
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-19
Apr-19
Oct-19
Jan-20
Jul-20
Oct-20
Jul-19
Apr-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Jan-24
Apr-24
Jul-24
Oct-24
from other sectors. Concrete manufacturing
costs have spiraled due to sanctions limiting
the availability of petrochemicals, while
copper and aluminum prices have risen due Source: IHS-Markit
SOURCE: IHS - Markit Source: IHS-Markit
SOURCE: IHS - Markit
to their use in the market for electric vehicles

and renewable energy. The complete
impact of the global economic recovery on
commodity prices remains to be seen, but it
PPI, Inputs to Construction Industries, Goods, Annual Year-Over-Year Change
is likely that prices will continue to fluctuate.
“Energy costs have declined almost 40%

Supply chain disruptions and a rapidly
25%
changing demand environment all pose
risks. Fortunately, many of these risks can be
thanks to a mild winter (which we expand

20%
planned for and understood by producers.
15%
on further in the “energy” section of this

10%
% Change Y-O-Y
report), while shipping costs are down a little

5%
over 20% due to the cooling economy.”

0
-5%
-10%
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: IHS-Markit 10
NATIONAL
INDICATORS
11
National Indicators
UNEMPLOYMENT
Unemployment and inflation move in
opposite directions: when one is high, the
other is typically low. With inflation at its U.S. Unemployment Rate Forecast (2005-2025)
highest level in 40 years, unemployment is
also at its lowest level. Exactly where the job
market is going, however, is hotly debated. 12.0%
Job openings are down almost 400,000 from
the end of 2022, but there are still almost
two open jobs per person looking for one. 10.0%
This points to the so-called “soft landing,”
What chart goes here?
where the economy cools off without a
recession, that the Federal Reserve has been 8.0%
trying to pull off. Still, unemployment is only
one measure and figures should be taken
with a grain of salt. 6.0%
Regulators are of course watching these

figures very closely. Recent trends have 4.0%
been encouraging, with the number of jobs
added to the economy slowly falling every
month without a corresponding increase 2.0%
in unemployment. Consumer spending has
fallen as interest rates are ratcheted up,
adding concerns that job growth will follow 0
suit in a few months. Current forecasts show
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
unemployment rising to between 4% and
5% by the end of the year as inflation returns
to sustainable levels. Sources:
SOURCES:
Historic - U.S. Bureau of Labor Statistics
Historic - U.S. Bureau of Labor Statistics
Forecast - Wall Street Journal - Bi-monthly Survey
“Recent trends have been encouraging, with the number of

jobs added to the economy slowly falling every month without
a corresponding increase in unemployment.”
12
National Indicators
U.S. ANNUAL GROSS

DOMESTIC PRODUCT (GDP)
Gross Domestic Product (GDP) is the leading indicator
of economic activity in a country and tracks the sum of
all final goods and services that change hands within its
borders in a particular period of time. Data for the last U.S. Annual GDP Growth Forecast (2005-2025)
quarter of 2022 shows that GDP grew by a little over 1%.
This trend puts it on pace to grow by around half a percent
over this year, roughly in line with a soft landing that 8.0%
regulators hoped for.
In addition to GDP, there are many other indicators that 6.0%

policymakers watch to understand how the economy is
performing. The unemployment rate can indicate how
easy it is for people to find work, which in turn can affect
4.0%
consumer spending and investment. Consumer spending
can also indicate how confident people are in their financial
prospects.
2.0%
-2.0%
-4.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Sources:
SOURCES:
Historic - U.S. Dept. of Commerce - Bureau of Economic Analysis
Historic - U.S. Dept of Commerce - Bureau of Economic Analysis
13
National Indicators
CONSUMER
PRICE INDEX (CPI)
The Consumer Price Index is a measure
of inflation and an indicator of the cost of
living. It remains stubbornly high, and each U.S. Consumer Price Index Forecast (2005-2025)
new update has increased unease about
8%
the possibility of a recession. The longer it
remains elevated, the more dramatic the 7%
steps that will need to be taken to rein it in,
and the greater the risk of an overcorrection 6%
causing a downturn in the market.
5%
Core inflation – not including food or
4%
energy prices – has slowed over the last
three months. Higher interest rates and
3%
consumers finding alternatives to Russian
oil and Ukrainian wheat have helped to rein 2%
in spending. We expect this to translate into
a slowdown in the construction industry, 1%
which relies on access to capital to finance
new projects. Fewer projects will enter the 0
pipeline as owners will now have to repay
-1%
more of their loans.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Sources:
SOURCES:
Historic - Federal Reserve Bank of Minneapolis
Historic
Forecast - Federal
- Wall Reserve
Street Journal Bank of Minneapolis
- Bi-monthly Survey
“The Consumer Price Index is a measure of inflation and

an indicator of the cost of living. It remains stubbornly
high, and each new update has increased unease about
the possibility of a recession.”
14
U.S. 10-Year Treasury Note Forecast (2005-2025)
6%
5%
4%
3%
“Treasury yields have remained high
2%
since 2022 as the Federal Reserve
has fought to rein in inflation. They
1% continue to announce increases
every month, but they are decreasing
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 in scale.”
Sources:
SOURCES:
Historic - Federal Reserve Bank of St. Louis, NSA
Historic - Federal Reserve Bank of St. Louis, NSA
National Indicators
10-YEAR TREASURY NOTES

The 10-Year Treasury note is the most popular debt instrument in the world. It Treasury yields have remained high since 2022 as the Federal Reserve
is generally seen as a safe place to invest when the market is volatile because has fought to rein in inflation. They continue to announce increases every
its returns are low but effectively guaranteed. Interest rates are generally month, but they are decreasing in scale. Rather than inflation, the current
indicative of economic growth: The Federal Reserve raises rates to rein in debate is over the debt ceiling. With Congress divided and the debt limit
spending when the economy is growing and lowers them to encourage fast approaching, what will happen if they can’t agree is an open question.
spending when it is contracting. Commercial banks lend money at similar Treasury Notes are a crucial part of the world economic system because
interest rates, which can drive demand for real estate and thereby shore up they’re so reliable. If that changes and the government defaults on its debt, no
the construction industry during periods of slow economic growth. one is sure what would happen next. 15
National Indicators
ENERGY
Oil markets have mostly recovered from the shock caused by the conflict in milder than expected. This has pushed prices back down, as stockpiles are
Ukraine. The US government has dipped into its strategic petroleum reserve, lasting longer than expected. Still, prices remain higher than normal. This is
while other countries have stepped up production to take advantage of high a major factor behind the steep increase in prices for commodities like steel,
prices. This has, in turn, caused prices to stabilize. The Energy Information glass, and concrete, which are produced in natural gas-burning furnaces.
Administration estimates that gasoline prices will average $4.02 per gallon by We expect prices to recover sometime in the spring as governments sell off
the end of the year. their stockpiles to recoup some of the money they spent acquiring them. It is
important to note that energy markets are notoriously fickle, however, and we
European governments spent most of the summer stockpiling enough natural continue to see them change almost daily.
gas to last them through the winter. Winter has come, and it has been
West Texas Intermediate Oil Price Forecast (2004-2024) U.S. Regular All Formulations Gas Forecast (2004-2024)
$120 $4.00
$3.50
$100
$3.00
$80
Cost/Barrel (US$)
$2.50
Cost/Ga (US$)
$60
$2.00
$40 $1.50
$1.00
$20
$0.50
0
0
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Sources:
SOURCES: SOURCES:
Historic - Federal Reserve Bank of St. Louis, NSA Historic - Federal Reserve Bank of St. Louis, NSA
Historic - Federal Reserve Bank of St. Louis
Forecast - Wall Street Journal - Bi-monthly Survey Sources:
Forecast - Wall Street Journal - Bi-monthly Survey Historic - Federal Reserve Bank of St. Louis
Forecast - U.S. EIA
16
CREDIT
MARKETS
17
Credit Markets
LENDING ACTIVITY
Real estate development depends heavily on lending liquidity, which
spurs new construction projects and thereby creates demand for new
materials and subcontractor capacity. This means that when conditions
are favorable for borrowers, construction volume increases. When
conditions are favorable for lenders, however, volume tends to decline
as owners are reticent to begin new projects.
Loan Origination Activity - Construction & Development ($B, Annualized) Loan Origination Activity - Construction & Development ($B, Annualized) Loan Origination Activity - Construction & Development ($B, Annualized)
$500 $500 $500
$450 $450 $450
$400 $400 $400
$350 $350 $350
$300 $300 $300
$250 $250 $250
$200 $200
$200
$150 $150
$150
$100
$100 $100
p 5
c 5
r 5
n 6
p 6
c 6
r 6
n 7
p 7
c 7
r 7
n 8
c 0
p 8
c 8
r 8
n 9
p 9
c 9
r 9
n 0
p 0
r 0
n 1
p 1
c 1
r 1
n 2
p 2
c2 2
2
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 202
Se 202
De 202
Ma 202
Ju 202
Se 202
De 202
Ma 202
Ju 202
Se 202
De 202
02
p 5
c 5
r 5
n 6
p 6
c 6
n 9
r 6
n 7
p 7
c 7
r 7
n 8
n 0
n 2
p 8
c 8
r 8
p 9
c 9
r 9
p 0
c 0
r 0
n 1
p 1
c 1
r 1
p 2
c2 2
2
p 5
c 5
r 5
n 6
p 6
c 6
r 6
n 7
p 7
c 7
r 7
n 8
p 8
c 8
r 8
n 9
p 9
c 9
r 9
n 0
p 0
c 0
r 0
n 1
p 1
c 1
r 1
n 2
p 2
c2 2
2
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 201
Ju 202
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 202
Se 202
De 202
Ma 202
Ju 202
Se 202
De 202
Ma 202
Se 202
De 202
02
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Ma 201
Ju 201
Ma 201
Ju 202
Se 201
De 201
Ma 201
Ju 201
Se 201
De 201
Se 202
De 202
Ma 202
Ju 202
Se 202
De 202
Ma 202
Ju 202
Se 202
De 202
02
n
Ju
n
n
Ju
Ju
SOURCE: Federal Deposit Insurance Corporation

SOURCE:Federal
SOURCE: FederalDeposit
DepositInsurance
InsuranceCorporation
Corporation SOURCE:Bankrate.com
SOURCE: Federal Deposit Insurance Corporation SOURCE: Federal Deposit Insurance Corporation
18
International Indicators
CURRENCY
U.S. Dollar Spot Index: DXY (2013-Current)
The US dollar is getting stronger against
the world’s major currencies. This has two
125 impacts: slowing investment from overseas
into the US and making exports more
expensive. There are however investment
120
opportunities for US firms overseas that may
impact domestic investments.
115
110
105
100
95
90
85
80
y 13
g 3
v 3
y 14
y 17
g 7
y 18
v 0
y 21
g 1
y 22
b 3
g 4
v 4
b 4
y 15
g 5
v 5
y 16
g 6
b 5
v 6
b 6
v 7
b 7
g 8
v 8
b 8
y 19
g 9
v 9
y 20
g 0
b 9
b 0
v 1
b 1
g 2
v 2
b 2
23
Au 201
No 201
Au 201
No 202
Au 202
Fe 201
Au 201
No 201
Fe 201
Au 201
No 201
Au 201
Fe 201
No 201
Fe 201
No 201
Fe 201
Au 201
No 201
Fe 201
Au 201
No 201
Au 202
Fe 201
Fe 202
No 202
Fe 202
Au 202
No 202
Fe 202
Ma 20
Ma 20
Ma 20
Ma 20
Ma 20
Ma 20
Ma 20
Ma 20
Ma 20
Ma 20
20
b
Fe
SOURCE: Sourced from FRED - Monthly Data

SOURCE: Sourced from FRED - Monthly Data
19
REGIONS
WEST
20
Honolulu, HI
Honolulu – and the state of Hawaii overall – has seen a lot of construction The number of hospitality projects is starting to rise following the lull
activity over the last few months. This has coincided with a general loss during the pandemic, and we’re also seeing more civic projects. Hawaii
of construction jobs, as COVID-19 sent many older workers into residential projects are also stable, and the public sector, with potential
retirement. There are new workers in training, but it will take some time funding from federal sources, is expected to remain stable.
before they can effectively fill the gap. The Department of Permitting and CONTACT: Andrew Tanton, Vice President CM + PM
Planning has around 8,000 permits waiting for approval, which will keep atanton@cumming-group.com
labor costs high for the next few years, as these projects will have to
compete for a smaller labor pool.
Total Construction Market Volume by Sector (x $1m, Nominalized 2012$) Annual Volume (x$1M, 2012$) Regional Construction Employment
$9,000 30 11.00%
2017 2018 2019 2020 2021 2022 2023 2024
Residential
$8,000
25 9.17%
Total Increase -0.7% 12.7% -15.4% -10.5% -12.3% 9.8% 10.1% 1.2%
$7,000
Residential 4.3% 22.0% -28.0% -12.6% -11.8% 36.0% 14.6% 0.2% 20 7.33%
Unemploy. Rate
$6,000
Trade Workers
Commercial 2.9% 0.8% -0.8% -13.6% -13.8% -10.8% -4.6% -4.9% $5,000 15 5.50%
Manufacturing -12.5% -5.8% 0.1% -18.4% -6.0% 4.1% 6.0% -2.7% $4,000
10 3.67%
Healthcare 1.2% -3.2% -2.8% -2.9% -7.0% -11.9% -3.4% 3.7% $3,000
$2,000 5 1.83%
Education -0.8% -2.1% -2.0% -8.9% -12.4% -15.4% 0.2% 4.2%
$1,000
Other Structure* 5.9% 1.5% 0.5% 3.7% -14.8% -15.0% -2.8% 2.0% 0 0
0
Infrastructure -15.4% 6.6% 5.2% -9.5% -12.7% -16.8% 12.2% 6.7% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST
Total Residential Commercial Manufacturing Healthcare Education Other Struct Infrastructure
Trade Workers Unemploy. Rate
* This includes religious buildings, amusement, government
communications, and public recreation projects.
SOURCE: IHS-Market SOURCE: U.S. Bureau of Labor Statistics
Construction Spending Index 2013-2024 (2013=1.0) Construction Volume vs Labor - Annual Increase/Decrease Top Regional Projects Sorted by Construction Value
1.40 50.00 Project Name Location Value
Dry Dock 3 Replacement Honolulu 8.00B

1.30 40.00
Queen's Medical Center Expansion Honolulu 1.00B
1.20 30.00
SMS: Design-Build/Design-Bid-Build Waterfront Multiple Award Joint Base Pearl
1.10 20.00 1.00B
Construction Contract (DB/DBB WF MACC) Hbr Hickam
1.00 10.00 Live Work Play Aiea Aiea 0.77B
0.90 0 New Rental Car Facility at Daniel K. Inouye International Airport
Honolulu 0.67B
-10.00 - State of Hawaii
0.80
The Park Ward Village Mixed-Use Honolulu 0.62B
0.70 -20.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 The Park on Keeaumoku Honolulu 0.60B
Waikapu Country Town Wailuku 0.60B

State U.S. City Construct. Vol. Labor
Sky Ala Moana / Honolulu Honolulu 0.51B
SOURCE: IHS-Market SOURCE: ReedConnect
Queen's Medical Center West Oahu Expansion Ewa Beach 0.50B
SOURCE: ReedConnect
21
Las Vegas, NV
Las Vegas seems to get a new skyline every decade. The area’s casinos, Over the past year, there has been an increasing volume of new
convention centers, and resorts are known across the world and must developments under consideration along the strip and elsewhere. As in
constantly reinvent themselves to keep their appeal. The money flowing other cities across the US, the CRE market is under stress with a
in from the more than 30 million people who visit in a typical year combination of high construction and land costs and limited availability of
supports them. Accommodating this many people is a massive part of the funding for new developments. CONTACT: Steven Cullen, Director, CM
local economy and is a key driver of the area’s construction market. steven.cullen@cumming-group.com
$22,000 80 16.00%
2017 2018 2019 2020 2021 2022 2023 2024
Residential $20,000 70 14.00%
Total Increase 4.1% 2.9% -0.5% 1.1% 8.2% -9.2% -2.0% 12.4% $18,000
60 12.00%
$16,000
Residential 7.7% 2.6% -3.1% 4.7% 23.6% -8.9% -2.9% 14.1%
Unemploy. Rate
50 10.00%
Trade Workers
$14,000
Commercial 2.8% 2.7% 1.7% -12.3% -16.1% -9.7% -4.5% -2.9% $12,000 40 8.00%
Manufacturing -10.1% 2.4% 9.6% -10.1% 2.8% 13.5% 7.1% -6.1% $10,000
30 6.00%
$8,000
Healthcare 11.9% 1.3% 1.5% 5.6% -1.2% -7.2% -10.0% 9.3% 20 4.00%
$6,000
Education 5.6% 2.7% -1.0% -4.2% -7.0% -16.3% 0.1% 4.6% $4,000 10 2.00%
$2,000 0 0
Other Structure* 8.6% 3.4% 1.6% 1.2% -11.4% -14.4% -3.6% 1.9%
0
Infrastructure -2.8% 3.9% 2.6% 1.6% -6.4% -9.5% 2.0% 17.9% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST
* This includes religious buildings, amusement, government Total Residential Commercial Manufacturing Healthcare Education Other Struct Infrastructure

1.80 Bleutech Park Las Vegas Las Vegas 7.50B

15.00
1.70 Helios Project Las Vegas 5.00B
1.60 10.00
Las Vegas Retail and Entertainment District North Las Vegas 3.00B
1.50
5.00 Hotel Fountainbleau / Las Vegas Las Vegas 2.20B
1.40
1.30 0 Horizon Lateral - Southern Nevada Water Authority Henderson 2.00B
1.20 Redwood EV Battery Materials Facility Expansion Lockwood 1.10B

-5.00
1.10 Lakemoor Master Planned Community Henderson 1.00B
1.00 -10.00
The Gemini Solar Array Las Vegas 1.00B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Venetian Upgrade Las Vegas 1.00B
State U.S. City Construct. Vol. Labor Henderson West Las Vegas 0.95B
SOURCE: IHS-Market SOURCE: ReedConnect SOURCE: ReedConnect
22
Los Angeles, CA
Construction in Los Angeles has seen a slowdown in recent months. Despite the slowdown, the city’s strong economy has reliably supported
However, there is activity in the multifamily and affordable housing new construction. There continues to be strong activity in the public and
markets as well as a resurgence of hospitality outside of the urban core. infrastructure sectors, but the private sector is seeing some tailwinds from
The entitlement process and time for obtaining approvals are hindering the current availability of funding and costs of construction.
developments in the urban core and the commercial office market has CONTACT: Trevor Shulters, Regional Director
been hit hard with high vacancy rates, maturing debt, and oversupply tshulters@cumming-group.com
driving asset transactions. Conversion of office to mixed-use residential or
hospitality projects is being debated for a number of properties.
$100,000 280 12.00%

2017 2018 2019 2020 2021 2022 2023 2024 260 11.14%
Residential $90,000 240 10.29%
Total Increase 2.2% -2.2% -6.5% 2.4% 0.4% -8.0% 1.1% 1.4% 220 9.43%
$80,000
200 8.57%
Residential 7.8% -5.4% -14.6% 9.7% 11.4% -5.7% 2.3% 4.0% $70,000 180 7.71%
Unemploy. Rate
Trade Workers
Commercial 4.2% 2.8% 0.4% -3.8% -10.6% -9.5% -5.5% -8.1% $60,000 160 6.86%
140 6.00%
$50,000
Manufacturing -15.4% -5.2% 4.1% -11.3% -3.6% 5.1% 4.9% -5.6% 120 5.14%
$40,000 100 4.29%
Healthcare 5.7% -2.9% -1.1% 0.8% -4.0% -9.0% -5.9% 2.3% 80 3.43%
$30,000
60 2.57%
Education 3.7% 1.6% 3.4% -3.3% -15.8% -12.9% -1.2% 3.5% $20,000 40 1.71%
20 0.86%
$10,000
Other Structure* 3.7% 1.2% -3.8% 0.3% -8.1% -10.0% -3.5% 0.4% 0 0
0
Infrastructure -10.1% 1.3% 1.8% -2.2% -7.9% -16.0% 6.4% 1.8% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

14.00 Project Name Location Value

1.45
1.40 12.00 I-710 LA River Bike Path - Maywood to Long Beach - Los Angeles East Los
4.00B
10.00 County Metropolitan Transportation Authority Angeles
1.35
8.00
1.30 One Beverly Hills Beverly Hills 2.00B
6.00
1.25 4.00 Fourth & Central Mixed-Use Redevelopment Los Angeles 2.00B
1.20 2.00
The Pier B On-Dock Rail Support Facility - Port of Long Beach Long Beach 1.50B
0
1.15
-2.00 Barstow International Gateway Los Angeles 1.50B
1.10 -4.00
Hollywood Park Tomorrow Mixed-Use - Future Phases Inglewood 1.14B
1.05 -6.00
1.00 -8.00 Inglewood Transit Connector - City of Inglewood Inglewood 1.02B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Inglewood Transit Connector - City of Inglewood Long Beach 1.00B
RFQ Contractor - Base Isolators Systems Los Angeles 1.00B

Olympia Los Angeles 1.00B
SOURCE: ReedConnect
23
Phoenix, AZ
The construction market in Phoenix has been quite active recently – a The labor market continues to grow, and new construction projects are
notable departure from trends in other cities. Phoenix is different from still well above pre-pandemic levels. A number of projects have seen an
other cities in the West in that it has a favorable location and low cost of increase in costs through current shortages of labor and trades, although
living, although the increase in population is leading to an increase in costs. a general slowdown across the US should ease some of these pressures.
The city’s economy -- particularly the technology companies that officials CONTACT: Jeff Mazmanian, Sr. Vice President, PM
have spent the better part of a decade courting -- and the growing jmazmanian@cumming-group.com
population have generated steady demand for new construction projects.
$60,000 160 9.00%

2017 2018 2019 2020 2021 2022 2023 2024
Residential 140 7.88%
Total Increase 8.9% 5.9% 3.4% 27.0% 3.1% -5.5% -7.0% 2.8% $50,000
120 6.75%
Residential 19.0% 6.6% 0.3% 48.9% 10.7% -0.1% -11.9% 2.1%
Unemploy. Rate
$40,000 100 5.63%
Trade Workers
Commercial 3.9% 3.7% 2.8% 2.8% -10.6% -11.6% -5.9% -6.4% 80 4.50%
$30,000
Manufacturing -12.1% 0.0% 8.8% -4.3% 0.2% 8.4% 5.8% -5.7% 60 3.38%
Healthcare 11.2% 1.1% 5.4% 13.1% 0.2% -9.3% -8.0% 2.8% $20,000
40 2.25%
Education 6.9% 6.2% 4.1% 0.4% -16.1% -18.8% -1.7% 5.3% $10,000 20 1.13%
Other Structure* 7.0% 2.6% 1.7% 7.4% -12.2% -13.5% -1.7% 1.8% 0 0
0
Infrastructure -1.6% 7.5% 8.7% 12.5% -3.0% -15.3% 4.7% 8.5% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


2.10 Villages at Vigneto Benson 4.00B
25.00
2.00
1.90 20.00 Rainbow Valley Goodyear 2.00B
1.80
15.00 Rosemont Copper Mine Corona de Tuc 1.90B
1.70
1.60 10.00 LogistiCenter at Copperwing El Mirage 1.50B
1.50
5.00 KOREPlex Manufacturing Facility (Batteries) Buckeye 1.25B
1.40
1.30 0 American Battery Factory Manufacturing Plant Comobabi 1.20B
1.20
-5.00
1.10 Nikola Corporation Hydrogen Production Facility Buckeye 1.00B
1.00 -10.00
Prologis 303 (Loop 303) Litchfield Park 1.00B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Northern Arizona Healthcare Flagstaff Medical Center Expansion Flagstaff 0.80B
State U.S. City Construct. Vol. Labor Moonlight Ridge Mixed-Use Development / Maricopa Maricopa 0.80B
24
Portland, OR
The outlook for Portland continues to be revised downwards. The Portland has enjoyed a thriving tech sector, thanks to its tax incentives
residential sector is expected to level off next year without a and the Bay Area’s high cost of living, and the recent turmoil that has
corresponding increase in another sector to offset it. Companies have swept over the industry is unlikely to change this. Increasingly, however,
been reluctant to begin new developments as economic prospects officials are directing their efforts toward keeping Portland affordable.
become hazier, and the wave of layoffs that hit the tech industry has only This broadly means investing in transit and divesting from fossil fuels. CONTACT: Mark Toles, Vice President, CM
heightened this sense of malaise. Fortunately, however, Portland has a Like in Sacramento to the south or Seattle to the north, the goal is to mtoles@cumming-group.com
diverse economy to fall back on and is uniquely positioned to benefit from attract workers by offering them something that they cannot find in
the government’s push to grow domestic semiconductor manufacturing. Silicon Valley – affordable housing and clean energy. It seems to be
working so far.
90 9.00%
2017 2018 2019 2020 2021 2022 2023 2024 $24,000
Total Increase -3.5% 2.3% 2.4% -2.8% -2.9% -10.3% -2.5% 4.9% 70 7.00%
$20,000
Residential -2.5% 3.5% -0.4% -4.4% 5.7% -10.4% -4.1% 7.2% 60 6.00%
Unemploy. Rate
Trade Workers
$16,000 50 5.00%
Commercial 5.3% 2.6% 1.3% -0.8% -10.1% -9.0% -5.7% -7.8%
$12,000 40 4.00%
Manufacturing -13.5% -0.6% 6.2% -10.4% -1.8% 8.5% 4.3% -5.5%
30 3.00%
Healthcare 3.3% -0.1% 3.6% 1.9% -8.8% -9.9% -9.0% 3.9% $8,000
20 2.00%
Education 2.7% -0.7% 1.3% -8.4% -15.9% -11.7% 1.2% 4.7% $4,000 10 1.00%
Other Structure* 6.3% -1.4% 0.8% 5.2% -12.5% -11.1% -2.7% 2.0% 0 0
0
Infrastructure -12.0% 1.6% 11.3% 1.3% -16.3% -15.6% 3.0% 9.5% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST
Construction Spending Index 2013-2024 (2013=1.0) Construction Spending Index 2013-2024 (2013=1.0) Top Regional Projects Sorted by Construction Value
1.40 1.40 Eagle Landing Mixed-Use Development Clackamas 0.58B

1.35 1.35 Wagon Trail Solar Heppner 0.54B
1.30 1.30
Project Management Services for Hood River-White Salmon Bridge
1.25 1.25 Hood River 0.52B
Replacement Project
1.20 1.20
RFP - Beaverton High School Commissioning Services Beaverton 0.25B
1.15 1.15
The Klamath River Renewal Project Klamath Falls 0.25B
1.10 1.10
New Lane County Courthouse Eugene 0.24B
1.05 1.05
1.00 1.00 Amberglen Alta 2 Mixed-Use Hillsboro 0.23B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Beaverton High School Replacement - MEP Beaverton 0.21B
Jen-Hsun and Lori Huang Collaborative Innovation Complex

State U.S. City State U.S. City Corvallis 0.20B
Research Center - Oregon State University
SOURCE: IHS-Market SOURCE: ReedConnect PacifiCorp Service Center Juniper Ridge (JRSC) Bend 0.18B
SOURCE: ReedConnect
25
Sacramento, CA
Sacramento has been a surprisingly active market in recent months, and The construction industry has so far done a good job of building new
this is expected to continue throughout the 2020s. The city’s strong housing, with the residential sector making up more than two-thirds of all
economy and growing population – it is the fastest-growing city in new developments. There are also incentives for green energy and mixed-
California, after all – have bolstered the city’s market through the worst of use developments in the pipeline. To meet this demand, contractors in
the pandemic. City officials are taking a proactive approach to Sacramento have been drawing in labor from nearby markets. City CONTACT: Tim Brown, Director, CM
accommodate these new residents and have tried hard to rein in new officials are hoping that Sacramento can retain its population by offering tim.brown@cumming-group.com
developments. residents something they cannot get elsewhere in California: affordable
housing and short commutes.
$22,000 80 12.00%
2017 2018 2019 2020 2021 2022 2023 2024
Residential $20,000 70 10.50%
Total Increase 9.7% -3.1% -1.8% 8.4% 9.0% -12.6% -3.0% 10.6% $18,000
60 9.00%
$16,000
Residential 19.5% -5.7% -5.5% 14.7% 22.6% -12.6% -8.2% 14.2%
Unemploy. Rate
$14,000 50 7.50%
Trade Workers
Commercial 3.8% 2.9% -0.2% -2.2% -13.0% -11.4% -5.7% -5.6% $12,000 40 6.00%
Manufacturing -15.0% -3.0% 7.1% -6.3% 1.3% 5.0% 5.7% -4.5% $10,000
30 4.50%
$8,000
Healthcare 10.4% -2.6% 1.3% 5.1% -0.5% -10.0% -3.0% 4.9% 20 3.00%
$6,000
Education 4.8% 2.6% 4.8% -2.4% -15.9% -12.8% 0.1% 4.6% $4,000 10 1.50%
$2,000
Other Structure* 3.1% 1.8% 5.4% 7.5% -15.1% -14.7% -3.0% 2.7% 0 0
0
Infrastructure -4.1% -1.9% 2.1% 2.9% -1.8% -14.6% 15.1% 11.6% 2017 2018 2019 2020 2021 2022 2023 2024
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
HISTORIC FORECAST
Total Residential Commercial Manufacturing Healthcare Education Other Struct Infrastructure Trade Workers Unemploy. Rate
Project Name Location Value

1.80 25.00
1.70 20.00 California Hospital Tower - UC-Davis Medical Center Sacramento 3.75B
1.60 15.00 Horizontal Construction Contracts For Southwestern Border Security

Sacramento 1.80B
and Immigration Enforcement Improvements
1.50 10.00
Replacement Hospital Tower - UC Davis Health Campus Sacramento 1.50B
1.40 5.00
Delta Shores - Future Sections Sacramento 1.50B
1.30 0
Mather South Mixed Use Development Sacramento 1.30B
1.20 -5.00
1.10 -10.00 Aggie Square Mixed Use Project Phase 1 - University of California Sacramento 1.10B
1.00 -15.00 Sacramento Kings Sleep Train Arena / California Northstate University
Sacramento 1.00B
Teaching Hospital and Campus
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
RFQ D/B - Replacement Hospital Tower (RHT) Sacramento 0.98B
State U.S. City Construct. Vol. Labor Aging in Place Acres Folsom 0.94B
SOURCE: IHS-Market SOURCE: ReedConnect Citrus
Sunrise Mall Specific Plan / Citrus Heights 0.82B
Heights
SOURCE: ReedConnect
26
San Diego, CA
San Diego’s construction market is set to see renewed attention in the The area is missing hundreds of thousands of housing units, and the city
next few years. Decades of expansion and single-family zoning laws is already pushing for higher-density residential projects – representing
caused the city to grow outwards instead of upwards. Today, San Diego an opportunity for those of us in the construction industry. The residential
occupies an area about the size of Connecticut. Thanks to the mountains sector is predicted to remain the largest driver of construction demand
surrounding the city, however, land available for this kind of development through at least 2024. San Diego is in serious need of new housing, but it CONTACT: Brooks Rehkopf, Regional Director
is disappearing fast. This has sent the cost of living skyrocketing, although will soon need new schools, offices, roads, and everything else that brehkopf@cumming-group.com
not quite as high as in Los Angeles or the Bay Area. makes a neighborhood feel like a neighborhood. The construction labor
force has been growing steadily in anticipation, which should be enough
to offset increased demand and keep labor costs from rising too much.
$24,000 90 11.00%
2017 2018 2019 2020 2021 2022 2023 2024
Total Increase 5.9% 1.1% -13.3% 4.6% 1.4% -4.9% 2.4% 7.8% $20,000 70 8.56%
Residential 13.7% -1.8% -24.0% 12.9% 13.4% -0.7% 3.3% 11.6% 60 7.33%
Unemploy. Rate
$16,000
Trade Workers
Commercial 2.9% 2.3% 0.7% -4.0% -12.2% -10.1% -5.7% -5.7% 50 6.11%
$12,000 40 4.89%
Manufacturing -13.1% -1.1% 7.8% -5.9% -2.2% 1.6% 5.1% -3.4%
30 3.67%
Healthcare 5.3% 0.9% -3.7% 0.5% -5.8% -9.1% -4.1% 5.1% $8,000
20 2.44%
Education 2.6% 0.9% 4.3% -3.4% -16.3% -14.8% -0.2% 4.1% $4,000 10 1.22%
Other Structure* 6.5% 1.8% 1.4% 2.8% -14.3% -12.2% -3.2% 2.2% 0 0
0
Infrastructure -9.6% 12.5% -8.2% -3.8% -9.2% -12.6% 10.1% 10.4% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

1.40 Navy Old Town Complex Revitalization Project San Diego 4.00B
15.00
1.35 2020 Bond/Measure - Convention Center Expansion - Measure C San Diego 3.80B
10.00
1.30
San Diego International Airport Terminal Replacement San Diego 3.40B
1.25 5.00
Seaport San Diego Redevelopment - Protea Waterfront Development San Diego 3.00B
1.20 0
1.15 Riverwalk Golf Club San Diego 2.50B
-5.00
1.10 San Vicente Energy Storage Facility/Lakeside Lakeside 1.50B
-10.00
1.05 East Village Quarter - Tailgate Park San Diego 1.50B
1.00 -15.00
Disposition & Development of E. Village Quarter/Tailgate Park San Diego 1.50B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Scripps Mercy Hospital San Diego San Diego 1.30B
State U.S. City Construct. Vol. Labor SMS: RFQ Design - IDIQ Multiple Award Construction Contract San Diego 1.00B
27
San Francisco, CA
The Bay Area saw a slowdown over the past few months as major tech
firms restructured in the wake of earnings misses and the pandemic. In
turn, a wave of layoffs has swept the area. The slowdown in the demand
to accommodate quickly growing tech needs is resulting in a drop in
residential new starts. CONTACT: Kevin Herron, Sr. Vice President, CM
kherron@cumming-group.com
Looking beyond residential, there is strong activity in the public sector,
particularly education, and also the in the life sciences sector, which
continues to see steady demand.
$80,000 200 10.00%

2017 2018 2019 2020 2021 2022 2023 2024 180 9.00%
Residential
$70,000
Total Increase 8.2% -0.9% -10.5% -2.7% 0.7% -1.8% 5.8% 1.8% 160 8.00%
$60,000 140 7.00%
Residential 15.5% -2.5% -17.9% -3.0% 9.0% 3.5% 7.4% 3.1%
Unemploy. Rate
Trade Workers
$50,000 120 6.00%
Commercial 2.2% 2.1% 1.9% -4.5% -14.2% -11.0% -6.8% -6.4% 100 5.00%
$40,000
Manufacturing -12.2% -0.6% 4.9% -7.2% -0.3% 6.2% 6.0% -4.3% 80 4.00%
$30,000 60 3.00%
Healthcare 4.3% -3.6% -1.8% -1.1% -3.9% -9.5% -3.0% 1.3%
$20,000 40 2.00%
Education 2.9% 0.6% 3.2% -4.2% -15.6% -14.0% -2.7% 3.1% 20 1.00%
$10,000
Other Structure* 12.2% 5.7% -0.3% 10.3% -8.6% -11.1% -2.7% 2.1% 0 0
0
Infrastructure -12.1% 1.1% -1.0% -6.4% -9.1% -13.9% 20.2% 1.9% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


1.50 Potrero Power Plant Site Redevelopment San Francisco 2.00B
15.00
1.45
Freedom West 2.0 San Francisco 2.00B
1.40 10.00
1.35 Stonestown Galleria Multi-family Development San Francisco 2.00B
1.30 5.00
San Francisco Flower Mart Redevelopment San Francisco 1.50B
1.25 0
1.20 Pier and Seawall Lot 330 Mixed Use Development San Francisco 1.20B
1.15 -5.00
India Basin Mixed-Use Development San Francisco 1.00B
1.10
-10.00
1.05 Biosolids Digester Facilities Project San Francisco 0.94B
1.00 -15.00
Biosolids Digester Facilities - T- 40.03 Process Mechanical San Francisco 0.94B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Balboa Park Reservoir Mixed-income Development San Francisco 0.60B
State U.S. City Construct. Vol. Labor Fourth and Townsend Street Residential Towers - San Francisco San Francisco 0.54B
28
Seattle, WA
Seattle has pledged to divest itself from fossil fuels by 2030 and become The residential sector makes up more than half of Seattle’s construction
completely carbon neutral by 2050. Both dates are approaching fast. This volume – with almost half of the spending within the residential sector
urgency represents an opportunity for the construction industry. Buildings going toward renovations. This will likely continue to increase in the
will need to be renovated to comply with new laws, while the city will coming years as the city looks to accommodate its growing population
need to invest in things like light rail and green energy. Contractors from while meeting environmental targets and preserving affordable projects. CONTACT: Nick Mata, Regional Director
across the country with relevant experience are already coming here to Construction labor has grown in order to meet this demand, but it has not nmata@cumming-group.com
cash in on these trends, while contractors in Seattle are hoping to been enough to keep costs down. Many contractors have begun looking
leverage this experience for future sustainability projects in other parts of to nearby cities for the labor needed for their projects.
the country.
$50,000 140 9.00%

2017 2018 2019 2020 2021 2022 2023 2024
Residential $45,000 120 7.71%
Total Increase 10.2% 2.1% -9.0% 5.6% 3.9% -7.6% -2.5% 3.6% $40,000
100 6.43%
Residential 16.4% 1.8% -14.4% 9.5% 14.2% -6.2% -4.7% 3.8% $35,000
Unemploy. Rate
Trade Workers
$30,000 80 5.14%
Commercial 5.8% 3.1% 1.1% -0.2% -11.3% -8.5% -6.6% -7.7%
$25,000 60 3.86%
Manufacturing -17.2% -3.6% 7.9% -12.4% -10.1% 6.8% 7.1% -3.2%
$20,000
Healthcare 6.5% -1.9% -2.4% 2.1% -6.6% -11.3% -5.6% 5.5% 40 2.57%
$15,000
Education 5.8% 2.6% 2.7% -6.0% -11.6% -16.0% -2.4% 4.5% $10,000 20 1.29%
$5,000
Other Structure* 10.4% 4.3% -1.4% 11.6% -8.3% -9.3% -0.6% 1.6% 0 0
0
Infrastructure -0.5% 3.9% -3.8% 0.1% -14.3% -15.0% 10.4% 11.8% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


1.50 14.00 The Goldendale Energy Storage - Columbia River Gorge Goldendale 2.40B
1.45 12.00
10.00 Banks Lake Pumped Storage - Columbia Basin Hydropower Beverly 1.40B
1.40
8.00
1.35 6.00 106th Avenue Mixed-Use Towers Bellevue 0.95B
1.30 4.00
2.00 LakePointe Urban Village Covington 0.67B
1.25
1.20 0 Arcadian Bellevue 0.66B
-2.00
1.15
-4.00 SR 167 / I-5 to SR 161 - Stage 2 Auburn 0.58B
1.10 -6.00
1.05 -8.00 Auburn 18 Business Park New Buildings Auburn 0.54B
1.00 -10.00
I-405, Brickyard to SR 527 Improvement Project Bellevue 0.53B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
I-405/SR 522 to SR 527 - Widening and Express Toll Lane Bothell 0.51B
State U.S. City Construct. Vol. Labor SR 509 24th Avenue South to South 188th Street New Expressway Des Moines 0.50B
29
REGIONS
CENTRAL
30
Chicago, IL
Chicago has had a relatively strong market over the last few months, Chicago’s residential sector is a small part of the overall market. The
despite declining trends overall. The city has seen an increase in both new commercial sector is one of the largest, thanks to the city’s location at the
construction projects and renovations of older buildings. The overall center of America’s railroad network. Businesses are investing in
market has been declining since 2008, but this is more due to warehouses across the area to accommodate the increasingly online
demographics than economics. Chicago has roughly the same number of nature of shopping, and this is expected to drive growth here in the CONTACT: Etienne Nel, Managing Director
residents as it did 100 years ago and there just isn’t the same need for coming years. The city’s labor pool has steadily added workers to meet enel@cumming-group.com
new projects here as there is out West. Chicago has instead focused on some of this new demand although Chicago’s overall construction volume
upgrading and modernizing existing facilities, with renovations making up has been declining. This should keep labor costs low going forward.
a large share of the volume.
$50,000 200 10.00%

2017 2018 2019 2020 2021 2022 2023 2024 180 9.00%
Residential $45,000
Total Increase -3.0% -4.0% -0.1% -0.5% -8.2% -11.2% 2.9% 1.5% $40,000
160 8.00%
140 7.00%
Residential -3.3% -16.2% -13.0% 7.5% 1.9% -10.7% 14.0% 6.4% $35,000
Unemploy. Rate
Trade Workers
120 6.00%
$30,000
Commercial 3.5% 1.9% 1.0% -1.0% -10.2% -9.7% -6.1% -9.1% 100 5.00%
$25,000
Manufacturing -13.8% -2.7% 4.7% -9.2% -2.3% 5.0% 5.1% -5.5% 80 4.00%
$20,000
60 3.00%
Healthcare 3.7% -5.1% -1.6% -1.3% -5.6% -10.1% -5.9% 4.0% $15,000
40 2.00%
Education 1.3% -1.3% 0.3% -0.9% -15.7% -18.5% -2.7% 4.6% $10,000
20 1.00%
$5,000
Other Structure* 5.4% 0.3% 0.2% 3.4% -13.8% -12.3% -3.0% 1.2% 0 0
0
Infrastructure -9.0% -1.7% 6.5% -2.6% -10.0% -15.3% 7.4% 7.5% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

1.30 12.00 Hollywood Casino and Hotel Reconstruction Aurora 0.19B

10.00
1.25 8.00 Replacement of Eastbound US 150 Bridge Brimfield 0.17B
1.20 6.00
4.00 The Clove Buffalo Grove 0.15B
1.15 2.00
0 Education Facility Development Batavia Public School District 101 Batavia 0.14B
1.10
-2.00 Golf Crossing Arlington Heights 0.13B
1.05 -4.00
1.00 -6.00 Interchange Reconstruction I57 Champaign 0.13B
-8.00
0.95 Kimpton Hotel and Staybridge Suites Alorton 0.12B
-10.00
0.90 -12.00
Garden Hills Detention Basin Champaign 0.10B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Southern Illinois University Carbondale Carbondale 0.08B
State U.S. City Construct. Vol. Labor Mid America Commerce Center Belleville 0.08B
31
Dallas, TX
The Dallas-Fort Worth Metroplex is one of the fastest-growing urban The city’s strong economy, particularly in its tech and financial industries,
areas in the country. Almost one in five residents moved here in the last supports the demand for construction projects. These are mostly from the
ten years, filling in communities on the periphery. Unlike cities on the infrastructure and residential sectors – needed to both accommodate new
West Coast, Dallas is relatively flat and has been able to accommodate residents and turn an area the size of New Jersey into a cohesive urban
these residents without changing zoning laws or raising the cost of living. area. We expect this trend to continue throughout the 2020s, with the CONTACT: Steve Rutland, Vice President, PM
There’s always room for new projects next to the old ones, and this has market seeing modest but sustained growth each year. srutland@cumming-group.com
caused the area to grow to something roughly as big as New Jersey.
Combined with favorable geography and business-friendly policies,
Dallas enjoys a constant appetite for new development.
$80,000 240 8.00%

2017 2018 2019 2020 2021 2022 2023 2024 220 7.33%
Residential
$70,000 200 6.67%
Total Increase 3.3% -0.3% 4.5% 7.8% 0.5% -2.4% 0.4% 3.6%
$60,000
180 6.00%
Residential 12.1% -3.5% -0.5% 11.8% 11.3% 5.5% -3.9% 5.8% 160 5.33%
Unemploy. Rate
Trade Workers
$50,000 140 4.67%
Commercial 5.0% 4.2% 3.3% 4.4% -7.3% -6.0% -5.0% -8.4%
120 4.00%
$40,000
Manufacturing -12.1% -0.7% 8.4% -7.0% -0.9% 6.1% 5.6% -5.5% 100 3.33%
$30,000 80 2.67%
Healthcare 6.5% -2.3% 5.4% 7.5% -2.6% -7.6% -4.4% 0.9% 60 2.00%
$20,000
Education 5.2% 1.8% 5.0% 1.6% -12.3% -10.0% 0.7% 4.9% 40 1.33%
$10,000 20 0.67%
Other Structure* 6.8% 1.1% -0.7% 10.4% -12.0% -13.3% -2.4% 2.4% 0 0
0
Infrastructure -7.2% 2.5% 12.7% 6.6% -7.1% -11.9% 11.2% 6.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

Texas Central Railway High-Speed Line Dallas 18.00B

1.60 15.00
Four Seasons Hotel and Condo Tower Dallas 0.75B
1.50
10.00
2323 North Field Street / Mixed Use Dallas 0.55B
1.40
5.00 2023 Bond Projects - Coppell Independent School District Coppell 0.51B
1.30
0 RFQ D/B - Whole Building Commissioning Agent AE Services - Dallas
1.20 Dallas 0.50B
Veterans Affairs Health Care Center
1.10 -5.00 Project Meadow / Dallas Dallas 0.50B
1.00 -10.00 Crow / Penn Trade Center Dallas 0.50B

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Dallas Gateway Mixed-Use Project Dallas 0.42B
The Rivers Mixed-Use Development Dallas 0.40B

One NewPark Tower Dallas 0.38B
SOURCE: ReedConnect
32
Denver, CO
Construction in Denver has been strong in recent months, although not as Residential construction here swelled as new people moved in.
strong as its peak of late 2021. The last census revealed that one in five Nonresidential construction has slowly increased since 2022, as the area
residents moved to Denver within the last ten years, and this kind of pivots from housing to schools, offices, and shopping centers. However,
growth simply is not sustainable. The cost of living has steadily increased in the years ahead, we expect the growth to come from the education,
over the same period, while new developments inch closer and closer to healthcare, and infrastructure sectors. Now that people have houses, they CONTACT: Sean McDermott, Regional Director
the mountains. We expect the market to see modest declines as will need schools, medical care, and a way to get around the city. Most of smcdermott@cumming-group.com
residential construction catches up with the area’s population growth. It Denver’s population growth has occurred outside of the city itself.
should be noted, however, that the Denver market has consistently Officials now must shift spending towards tying these disparate
outperformed our forecasts. Doing so again is certainly a possibility. communities together. To that end, highways and commuter rail should
be a priority in the coming years.
$45,000 120 9.00%

2017 2018 2019 2020 2021 2022 2023 2024 110 8.25%
Residential
$40,000
100 7.50%
Total Increase 11.1% 0.4% -12.0% 6.2% 16.0% -5.0% -12.2% 3.6%
$35,000 90 6.75%
Residential 16.8% -1.5% -19.2% 11.0% 31.7% -2.7% -16.9% 4.9% 80 6.00%
Unemploy. Rate
$30,000
Trade Workers
70 5.25%
Commercial 4.8% 3.5% 2.9% 1.0% -8.9% -9.5% -6.3% -8.1% $25,000 60 4.50%
Manufacturing -13.9% -2.8% 6.2% -6.8% -1.1% 5.8% 3.9% -4.9% $20,000 50 3.75%
40 3.00%
Healthcare 9.7% -1.7% -3.5% 1.3% 0.2% -6.8% -11.0% 2.4% $15,000
30 2.25%
$10,000 20 1.50%
Education 1.9% 2.0% 4.6% 0.0% -12.5% -15.8% -0.3% 4.5%
$5,000
10 0.75%
Other Structure* 7.8% 4.3% -0.9% 8.7% -11.9% -13.7% -2.9% 1.4% 0 0
0
Infrastructure 2.2% 4.9% -3.5% -1.9% -2.9% -9.3% -0.1% 6.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

20.00
1.80 Colorado
15.00 Amara Masterplan Development 3.58B
Springs
1.70
10.00 Sun Empire Industrial Park Phase 2-3 Aurora 1.30B
1.60
1.50 5.00 Colorado
Microchip Technology Silicon Carbide Plant 0.88B
1.40 Springs
0
1.30 Colorado
-5.00 Entegris Manufacturing Center of Excellence 0.60B
1.20 Springs
1.10 -10.00 Sun Empire Industrial Park Phase 1 Aurora 0.45B

1.00 -15.00 Kings Point - Future Phases Aurora 0.42B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Lumberyard Affordable Housing Development Aspen 0.40B
State U.S. City Construct. Vol. Labor Capital Construction Projects - 2022 Bond - Boulder Valley School
Boulder 0.35B
District
Windler Mixed-Use Development / Aurora - Phase One Aurora 0.29B
Colorado
RFQ Contractor - Renovate Sijan Hall, Phase 1 0.25B
Springs 33
Copyright © 2023 Cumming Management Group, Inc. SOURCE: ReedConnect
Minneapolis, MN
Construction in Minnesota is tapering off as the economy slows. The state and kept rents lower than in comparable cities. It will take some time for
has generally enjoyed population growth over the last 50 years, and this the full effect of this trend to be seen, but it will most likely mean more
is beginning to come to an end. Commodities prices and overall multifamily projects and less infrastructure spending as the area has a
construction activity have both been unusually high for a few years and reduced need for highways.
are recovering as well. Therefore, the cumulative effect of these trends is CONTACT: Sean McDermott, Regional Director
a reduction in total volume of almost 12% over 2022 and a forecasted The local economy is approaching what economists call “full smcdermott@cumming-group.com
decline of almost 8% in 2023. After that, the market should level off. employment,” with the unemployment rate hovering at around 2%. It has
been ticking up as the economy cools, however. We expect
The Twin Cities, the largest metro area in the state, recently amended unemployment and inflation to settle at around 3% by the end of next
their land-use laws to effectively outlaw single-family residential zoning. year.
This has translated into more than 21,000 new projects in the pipeline
$35,000 90 6.50%
2017 2018 2019 2020 2021 2022 2023 2024
$30,000
Total Increase 3.2% -1.4% 6.9% 6.9% -0.2% -12.9% -7.8% 2.6% 70 5.06%
Residential 11.4% -1.7% 7.9% 15.9% 11.4% -13.9% -14.2% 5.9% $25,000 60 4.33%
Unemploy. Rate
Trade Workers
Commercial 3.5% 2.5% 1.3% -0.3% -10.7% -11.6% -5.5% -7.3% $20,000
50 3.61%
40 2.89%
Manufacturing -14.1% -2.4% 5.8% -8.1% -1.1% 8.0% 4.3% -6.0% $15,000
30 2.17%
Healthcare 7.6% -4.9% 2.7% 4.2% -2.6% -11.2% -9.7% 2.6% $10,000 20 1.44%
Education 3.9% 0.7% 2.4% -1.2% -14.6% -16.2% -0.5% 4.2% 10 0.72%
$5,000
Other Structure* 7.0% 1.4% -0.2% 3.7% -14.5% -14.6% -2.8% 2.4% 0 0
0
Infrastructure -3.7% -3.7% 13.3% 5.3% -5.6% -15.8% -2.6% 4.7% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


12.00
10.00 Blatnik Bridge Replacement - Minnesota Department of
1.35 Duluth 3.00B
8.00 Transportation
1.30 6.00
4.00 CloudHQ Data Center / Chaska Chaska 1.00B
1.25 2.00
0 Rice Creek Commons Arden Hills 0.75B
1.20
-2.00
-4.00 Essentia Health Vision Northland Duluth 0.68B
1.15
-6.00 The Cubes at French Lake Dayton 0.54B
1.10 -8.00
1.05 -10.00 Audubon Business Park Chanhassen 0.50B
-12.00
1.00 -14.00 Cottage
Cottage Grove Logistics Park 0.38B
Grove
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Dodge County Wind Project Dodge Center 0.30B
State U.S. City Construct. Vol. Labor Mall of America Water Park Bloomington 0.25B
SOURCE: IHS-Market SOURCE: ReedConnect CSAH 17 (Lexington Ave) - North Road (CR 49) to 112th Avenue - Anoka
Blaine 0.24B
County
SOURCE: ReedConnect
34
Nashville, TN
The construction market in Nashville peaked in 2021 and has been in We expect Nashville’s market to taper off in the coming years as
decline since then. This is due to demographics rather than economics: demographic trends return to their mean. The Nashville metro area
Nashville’s economy grew at an unsustainably fast pace during the occupies almost 20% of Tennessee’s land area, and providing key
2010s, and now the market is correcting. In 2016 there was more than $2 services across such a large area will be a challenge. Officials will likely
billion in real estate under development and in 2017 more than 100 invest in infrastructure first, followed by education and healthcare projects CONTACT: Sean McDermott, Regional Director
people moved in every day. This is just not sustainable. The number of later in the decade. Thanks to Nashville’s business-friendly environment smcdermott@cumming-group.com
trade workers increased throughout the 2010s to meet this growth, but it and thriving tourism industry, however, we expect it to remain a steady
is unclear what will happen now that the market is tapering off. Some will market for years to come.
likely move throughout the region and will push labor costs down in
nearby cities.
60 9.00%
2017 2018 2019 2020 2021 2022 2023 2024 55 8.25%
Residential $24,000
50 7.50%
Total Increase -1.5% -3.6% 9.3% 12.3% 3.8% -12.3% -11.0% 11.1%
$20,000 45 6.75%
Residential 0.2% -5.3% 10.3% 18.9% 15.5% -14.1% -16.2% 16.1% 40 6.00%
Unemploy. Rate
Trade Workers
$16,000 35 5.25%
Commercial 5.5% 5.0% 3.2% 0.8% -10.3% -7.8% -5.2% -7.0% 30 4.50%
Manufacturing -11.7% -3.9% 5.3% -11.1% 1.7% 4.3% 3.2% -5.4% $12,000 25 3.75%
20 3.00%
Healthcare 4.9% -5.7% 6.0% 10.3% -4.4% -8.5% -13.2% 4.2% $8,000 15 2.25%
10 1.50%
Education 3.0% 1.1% 2.5% 4.2% -13.9% -16.7% 1.5% 5.2%
$4,000 5 0.75%
Other Structure* 8.1% 2.3% 1.9% 9.6% -9.8% -11.0% -3.6% 2.0% 0 0
0
Infrastructure -8.8% -5.4% 14.4% 10.2% -9.2% -11.6% -5.2% 13.3% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


2.00 20.00 The Bend - Mixed-Use District Chattanooga 4.00B
1.90
15.00 LG Chem Cathode Materials Plant Clarksville 3.20B
1.80
1.70 10.00 Hankook Tire Phase 3 Expansion Clarksville 0.61B
1.60
5.00 Piedmont Lithium Processing and Manufacturing Facility Etowah 0.58B
1.50
1.40 0 Big Bear Bluffs Columbia 0.54B
1.30 -5.00 Microvast Manufacturing Facility Clarksville 0.50B
1.20
-10.00
1.10 The Parke at Houston Levee Collierville 0.31B
1.00 -15.00
SMS: Facilities Acquisitions for Restoration and Modernization (FARM ll) Arnold AFB 0.30B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Riverton Village Center Chattanooga 0.30B
State U.S. City Construct. Vol. Labor The Killebrew Clarksville 0.30B
35
Salt Lake City, UT
As 2022 wore on, the pandemic housing boom began to look less like a Thanks to its status as Utah’s capital, Salt Lake City enjoys relative
blip and more like the beginning of a sustained trend. The overall market insulation from economic shocks. Approximately one in five workers are
– although not as active as in 2021 – is expected to grow steadily employed by state, municipal, or federal governments. Another one in five
throughout the 2020s. The city has a strong economy and is one of a works in transportation in some capacity. These industries are uniquely
handful of places that is positioning itself to capture tech companies positioned to benefit from a shift away from brick-and-mortar stores and CONTACT: Sean McDermott, Regional Director
looking to escape the rising costs in Silicon Valley. Unlike cities further towards online commerce. Government employees are not at the whims smcdermott@cumming-group.com
east like Nashville or Houston, Salt Lake City is sandwiched between the of booms and recessions in the same way that the private sector is, and
eponymous Great Salt Lake on one side and the Wasatch Mountains on the logistics sector has enjoyed constant, sustained demand for the past
the other. This limits available land and pushes costs up as the city decade. These factors keep a significant chunk of workers employed, and
expands. these workers can stimulate demand for the remainder of the economy.
$18,000
60 7.00%
2017 2018 2019 2020 2021 2022 2023 2024 55 6.42%
Residential
$16,000 50 5.83%
Total Increase 8.1% 3.9% -0.2% 16.5% 2.3% -10.5% -1.3% 5.2%
$14,000 45 5.25%
Residential 14.1% 3.2% -1.6% 27.8% 11.6% -7.4% -2.4% 5.1% 40 4.67%
Unemploy. Rate
$12,000
Trade Workers
35 4.08%
Commercial 3.9% 4.0% 2.9% 5.2% -8.6% -10.9% -6.9% -7.8% $10,000 30 3.50%
Manufacturing -12.5% -2.3% 6.6% -5.5% 2.0% 5.9% 5.5% -5.2% $8,000
25 2.92%
20 2.33%
Healthcare 10.0% 0.3% -2.2% 7.4% -2.1% -14.9% -7.0% 8.3% $6,000 15 1.75%
$4,000 10 1.17%
Education 5.7% 0.9% 3.8% 2.8% -13.6% -18.7% -0.8% 6.8%
5 0.58%
$2,000
Other Structure* 9.7% 0.3% 0.6% 10.4% -11.1% -12.2% -3.1% 1.7% 0 0
0
Infrastructure 1.4% 9.4% -0.9% 6.6% -9.9% -20.8% 5.7% 15.2% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

Construction
ConstructionSpending
SpendingIndex
Index2013-2024
2013-2023(2013=1.0)
(2013=1.0) Construction Volume vs Labor - Annual Increase/Decrease Top Regional Projects Sorted by Construction Value

2.20 20.00
2.10 Semiconductor Wafer Fabrication Plant Lehi 11.00B
2.00 15.00
1.90 Olympia Hills Herriman 2.00B
10.00
1.80 Thanksgiving Station Lehi 2.00B
1.70 5.00
1.60 Eagle Mountain Data Campus Fairfield 1.20B
1.50 0
Skye-Lehi Lehi 0.95B
1.40
-5.00
1.30 Utah State Correctional Facility GMP 9.01 Administration (SA) Magna 0.44B
1.20 -10.00
1.10 Hill Air Force
SMS: Multiple Award Construction Contract IV (MACC IV) 0.39B
1.00 -15.00 Base
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Lionsback Resort Moab 0.35B
SMS: Simplified Acquisition of Base Engineering Requirements Hill Air Force

State U.S. City Construct. Vol. Labor 0.27B
(SABER) Base
SOURCE: IHS-Market SOURCE: ReedConnect RFQ D/B - USACE SPK DB Construction - F35 Maintenance Facility - Hill Air Force
0.25B
Hill AFB, UT Base
SOURCE: ReedConnect
36
REGIONS
EAST
37
Atlanta, GA
Atlanta will continue to grow as a cultural and economic hub throughout Growth in Atlanta’s construction industry is expected to come primarily
the 2020s. It enjoys an educated workforce and a favorable location, from the residential sector. New residents need somewhere to live and
which has attracted new businesses and professionals. Businesses will older ones will need more modern homes. The manufacturing sector,
need offices, retail spaces, and warehouses, while new residents will need meanwhile, has proven surprisingly robust. Thanks to its cheap land,
a place to live and a way to get to work. The flat land around the city has educated workforce, and access to the rest of the country, Atlanta is an CONTACT: Jarrod Ross, Director, CM
given new developments space and this has kept the cost of living from attractive option for businesses looking to relocate operations to the jross@cumming-group.com
rising too high. City officials are hoping to combat urban sprawl as new United States.
residents move in and are instead investing in high-density, mixed-
income developments around the downtown core. This can be seen in the
city’s footprint, which first grew outwards but is now growing upwards.
$55,000 140 10.00%

2017 2018 2019 2020 2021 2022 2023 2024
Residential $50,000 120 8.57%
Total Increase 0.5% 1.4% 1.5% 0.0% -1.4% 3.7% -3.6% 4.8% $45,000
$40,000 100 7.14%
Residential 4.2% 2.4% -6.1% 4.0% 9.0% 19.1% -10.7% 8.3%
Unemploy. Rate
Trade Workers
$35,000 80 5.71%
Commercial 4.6% 3.5% 2.1% 1.2% -9.4% -7.5% -5.3% -8.3% $30,000
60 4.29%
Manufacturing -11.8% -1.5% 6.5% -8.9% 0.2% 7.1% 3.6% -5.2% $25,000
$20,000 40 2.86%
Healthcare 6.3% -2.6% 5.5% -1.5% -3.0% -5.5% -3.9% 2.0%
$15,000
Education 6.4% 4.1% 4.5% 1.4% -14.4% -15.9% 0.2% 6.6% $10,000 20 1.43%
$5,000 0 0
Other Structure* 8.6% 0.0% -2.4% 8.5% -6.5% -10.1% -1.6% -0.7%
0
Infrastructure -7.8% -0.4% 12.3% -6.6% -8.7% -9.6% 11.1% 6.7% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


1.50 16.00 Project Tera Atlanta 5.00B
1.45 14.00
Design-Build-Finance-Maintain for the SR400 Express Lanes P3 Project Atlanta 2.40B
1.40 12.00
1.35 Forge Atlanta Atlanta 1.30B
10.00
1.30
8.00 Science Square Atlanta 0.75B
1.25
6.00
1.20 The Stitch Atlanta 0.71B
1.15 4.00
2.00 SMS: RFQ - Veterans Integrated Service Network 7 Construction Augusta 0.70B
1.10
1.05 0 Danimer Scientific Addition Bainbridge 0.70B
1.00 -2.00
NGMC-South Hall Campus Expansion Braselton 0.57B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Continuum Alpharetta Alpharetta 0.52B
State U.S. City Construct. Vol. Labor Intuitive Surgical Georgia Campus Expansion Atlanta 0.50B
38
Boston, MA
The market in Boston continues to benefit from widespread diversity. The overall market is expected to decline slightly this year, but sizable
Residential, life science, commercial, education, and infrastructure growth is likely to come from the manufacturing sector. Unlike in other
projects are all present here in similar proportions. There are several cities, this is not due to the reshoring of manufacturing jobs but rather to
high-profile projects underway here, including the redevelopment of the the role of life sciences in ending the COVID-19 pandemic. New
city’s Seaport District, residential towers along the waterfront, and vaccines will need to be developed, manufactured, and distributed CONTACT: Christine Mosholder, Sr. Vice President
continued life science development across the Charles River in alongside the work that has not been changed by the pandemic. In cmosholder@cumming-group.com
Cambridge. Laboratories operate across the city serving the thriving short, biotech companies in the greater Boston area will need to
biotech industry, which requires specialized workspaces, equipment, and increase capacity, and fast.
workers who must be on-site. This has in turn spilled into other parts of
the economy and surrounding communities and kept adjacent businesses
downtown operating.
$40,000 80 9.00%
2017 2018 2019 2020 2021 2022 2023 2024
$35,000
Total Increase -0.1% -3.7% -2.7% 1.0% 1.1% -6.3% -5.7% 0.9%
$30,000
60 6.75%
Residential 2.6% -8.6% -12.6% 5.3% 20.6% 2.5% -12.6% 2.2%
Unemploy. Rate
50 5.63%
Trade Workers
$25,000
Commercial 2.5% 2.4% 2.4% -3.0% -11.4% -11.0% -6.2% -6.6%
40 4.50%
$20,000
Manufacturing -14.0% -3.3% 5.1% -9.6% -1.7% 5.3% 5.0% -5.0% 30 3.38%
$15,000
Healthcare 2.8% -4.9% -1.3% -2.6% -3.6% -10.2% -5.7% 2.5% 20 2.25%
$10,000
Education 2.7% -0.9% 5.1% 1.7% -14.2% -17.2% -1.4% 3.3% 10 1.13%
$5,000
Other Structure* 7.4% 0.6% -2.2% 5.1% -10.3% -12.6% -3.4% 1.3% 0 0
0
Infrastructure -10.5% -1.6% 5.7% -2.4% -5.4% -15.6% 9.6% 3.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


1.35 10.00
8.00 Dorchester Bay City Boston 5.00B
1.30
6.00
Massachusetts General Hospital Boston 1.90B
1.25 4.00
2.00 Mary Ellen McCormack Redevelopment Boston 1.60B
1.20
0 Harvard University Enterprise Research Campus Boston 1.00B
1.15 -2.00
Red-Blue Connector Boston 0.85B
1.10 -4.00
-6.00 Boston Wharf Road Mixed-Use Building Boston 0.74B
1.05
-8.00 Seaport Circle Project - Parcel H Boston 0.59B
1.00 -10.00
L Street Station - Block D/Edison Power Plant Boston 0.58B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Design/Construction Phase Services North Station Draw 1 Bridge
Boston 0.57B
Replacement
South Boston Iron Works Mixed-Use Boston 0.55B
SOURCE: ReedConnect
39
Miami, FL
Miami is known for its diverse and modern architecture. The number of Cost escalation here is higher than in other parts of the country, and
new skyscrapers popping up across the city is only increasing, leading supply-chain issues have increased the cost of a typical project by around
many to use the word “manhattanization” to describe the trend. A lot of 20%. This hasn’t been enough to offset the booming market – demand is
these are new residential developments, which make up a little over half simply so high that developers can recoup their losses. It has, however,
of the market. The market is also increasingly focused on commercial and caused contractors to buy materials earlier than they normally would, CONTACT: Bill Flemming, Sr. Vice President, PM
mixed-use development to help cement Miami’s status as a cultural hub. which has in turn caused more of a project’s cost to be paid upfront. This bflemming@cumming-group.com
North America’s largest cruise terminal is currently finishing construction trend can help explain the gentle decline in commercial construction since
here and is set to open sometime in the Spring. 2020.
$50,000 160 10.00%

2017 2018 2019 2020 2021 2022 2023 2024
Residential $45,000 140 8.75%
Total Increase 2.3% 0.7% 6.6% 8.4% -3.5% 4.6% 4.0% 2.1% $40,000 120 7.50%
Residential 7.5% -0.5% 6.7% 19.6% 4.3% 18.4% 5.9% 2.5% $35,000
Unemploy. Rate
100 6.25%
Trade Workers
$30,000
Commercial 4.2% 2.3% 0.2% 0.3% -8.3% -7.5% -5.9% -8.5% 80 5.00%
$25,000
Manufacturing -13.3% -2.4% 6.8% -8.7% -0.2% 8.4% 4.3% -6.4% 60 3.75%
$20,000
Healthcare 3.1% -5.0% 2.6% -0.2% -5.9% -9.2% -3.9% 4.9% $15,000 40 2.50%
Education 5.5% 1.3% 3.9% 0.7% -13.1% -15.4% 0.8% 4.7% $10,000 20 1.25%
$5,000
Other Structure* 7.3% 1.3% -0.6% 4.7% -12.9% -14.2% -3.3% 1.1% 0 0
0
Infrastructure -9.3% 2.7% 15.6% -1.4% -12.5% -11.8% 9.1% 8.7% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

2.00 22.00
1.90 20.00 Lake Flores Bradenton 1.50B
18.00
1.80
16.00 Apopka 429 Apopka 1.00B
1.70 14.00
12.00 Kelly Park Crossings Apopka 1.00B
1.60
10.00
1.50 Kettering Road Industrial Development Brooksville 1.00B
8.00
1.40 6.00 Apollo
1.30 4.00 Big Bend Power Station Modernization 0.85B
Beach
1.20 2.00
0 The Lakewood Centre Residential Bradenton 0.61B
1.10 -2.00
1.00 -4.00 Floridian Town Center Apopka 0.50B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Central Everglades Planning Project (CEPP) Contract 11A, EAA A-2
Belle Glade 0.49B
Reservoir Foundation and Cutoff Wall
State U.S. City Construct. Vol. Labor Mason Smith Road Subdivision Brooksville 0.47B
SOURCE: IHS-Market SOURCE: ReedConnect Milkaway Farms Brooksville 0.40B
SOURCE: ReedConnect
40
New York, NY
New York is one of the largest – and most diverse – construction markets will likely remain so for some time. The market is still expected to see an
in the world. It enjoys a surprisingly equal mix of residential, education, influx of federal funding towards infrastructure projects due to the
commercial, and infrastructure projects in development across the five Inflation Reduction Act. Construction and real estate comprise 20% of
boroughs. The appetite for large-scale projects here persists even through New York City’s GDP while providing 10% of jobs and 5% of wages.
the pandemic, with notable projects breaking ground all over the city. Labor costs will likely rise in the next few years, as there has not been a CONTACT: Mo Shehata, Vice President, CM
corresponding increase in the labor market to offset this rise in spending. mshehata@cumming-group.com
Even so, supply-chain issues and high escalation has kept costs high and
volume down. The market is still well below its pre-pandemic levels, and
180 11.00%
2017 2018 2019 2020 2021 2022 2023 2024
Residential $120,000 160 9.78%
Total Increase -2.5% -2.8% 3.7% -1.6% -3.8% -0.4% -12.5% -2.7% 140 8.56%
$100,000
Residential -1.5% -9.5% 5.2% -0.6% 10.6% 19.6% -27.2% -4.6% 120 7.33%
Unemploy. Rate
Trade Workers
$80,000 100 6.11%
Commercial 3.2% 2.0% 1.1% -5.0% -10.3% -9.9% -6.1% -7.5%
$60,000 80 4.89%
Manufacturing -14.5% -4.3% 3.9% -13.3% -0.5% 4.2% 4.3% -5.3%
60 3.67%
Healthcare 3.2% -2.4% 1.9% -2.0% -4.7% -8.3% -5.7% 0.6% $40,000
40 2.44%
Education 3.2% 1.2% 2.2% -1.0% -15.0% -19.0% -1.2% 4.4% 20 1.22%
$20,000
Other Structure* 6.9% 1.2% -1.8% 4.4% -10.8% -11.8% -2.4% 0.8% 0 0
0
Infrastructure -15.7% 0.7% 8.2% -2.2% -10.5% -13.3% 7.0% -2.5% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

20.00
1.40 Champlain Hudson Power Express Project (Canada to New York) Albany 4.50B
15.00
1.35
Fordham Landing Project / Bronx Waterfront Mixed-Use Development Bronx 3.50B
1.30 10.00
1.25 RFQ D/B - Construction of Facilities at Albany Stratton VA Medical Center
5.00 Albany 1.50B
1.20 and Northport VA Medical Center
1.15 0 Astoria Cove - Mixed-Use Development Astoria 0.55B
1.10
1.05 -5.00 RFQ D/B - Hunts Point Interstate Access Improvement Project - Contract 2 Bronx 0.52B
1.00
-10.00 Tobin First Prize Center Mixed-Use Redevelopment Albany 0.50B
0.95
0.90 -15.00 Rehabilitation of 6 Bridges on Cross Bronx Expwy between Boston Road
Bronx 0.45B
and Bronx River Parkway
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Design-Build Services for Livingston Avenue Bridge Replacement Project Albany 0.43B
State U.S. City Construct. Vol. Labor Offshore Wind Tower Manufacturing Complex - Port of Albany Albany 0.35B
SOURCE: IHS-Market SOURCE: ReedConnect Excelsior Energy Center Batavia 0.35B
SOURCE: ReedConnect
41
Orlando, FL
Orlando is a fast-growing city. It sees more visitors each year than Paris The area’s unemployment rate remains slightly below the national
and Venice put together – not bad for a city of 300,000 people. The average. This is particularly notable because it was well above the
tourism industry drives the market (although the tech sector is steadily national average in 2020. Tourism has rebounded and the market has
making gains) and the need for new hotels and resorts is nearly constant. managed to recover. The Orlando area’s private sector employment
The Orlando metro area led the country in job gains throughout 2022 in increased by almost 65,000 jobs over 2022, representing the third- CONTACT: Bill Flemming, Sr. Vice President, PM
leisure and hospitality, increasing by 33,600 jobs. highest number of private sector jobs gained over the year among all bflemming@cumming-group.com
metro areas. Its labor force has declined over the same period, however,
and this should push costs higher than in the surrounding areas.
$30,000 90 11.00%
2017 2018 2019 2020 2021 2022 2023 2024
Total Increase -1.0% 7.8% 2.3% 1.2% -0.5% 2.7% -3.2% 11.8% $25,000
70 8.56%
Residential 0.0% 15.8% -3.8% 6.0% 13.4% 9.5% -6.3% 13.2% 60 7.33%
Unemploy. Rate
$20,000
Trade Workers
Commercial 4.6% 3.7% 2.2% -5.3% -11.9% -8.5% -5.2% -5.4% 50 6.11%
$15,000 40 4.89%
Manufacturing -10.1% 1.1% 10.8% -5.9% 0.4% 8.8% 6.2% -5.8%
30 3.67%
Healthcare 5.9% -3.6% 8.0% 2.2% -9.1% -4.4% -8.7% 10.6% $10,000
20 2.44%
Education 5.1% 1.4% 4.5% 2.6% -12.3% -17.8% -0.5% 5.9% $5,000 10 1.22%
Other Structure* 8.4% 3.4% -1.2% 0.7% -14.0% -11.6% -2.9% 1.9% 0 0
0
Infrastructure -7.7% -0.5% 14.2% -3.9% -15.9% -2.8% 6.2% 19.7% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

1.90 Lake Flores Bradenton 1.50B
20.00
1.80
Apopka 429 Apopka 1.00B
1.70 15.00
1.60 Kelly Park Crossings Apopka 1.00B
10.00
1.50 Kettering Road Industrial Development Brooksville 1.00B
1.40 5.00
Apollo
1.30 0 Big Bend Power Station Modernization 0.85B
Beach
1.20
-5.00 The Lakewood Centre Residential Bradenton 0.61B
1.10
1.00 -10.00 Floridian Town Center Apopka 0.50B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Central Everglades Planning Project (CEPP) Contract 11A, EAA A-2
Belle Glade 0.49B
Reservoir Foundation and Cutoff Wall
Mason Smith Road Subdivision Brooksville 0.47B
SOURCE: IHS-Market SOURCE: ReedConnect Milkaway Farms Brooksville 0.40B
SOURCE: ReedConnect
42
Philadelphia, PA
Philadelphia is seeing a period of revitalization, with new projects We expect the market to see modest growth over the next few years.
breaking ground across the city. The market is still below its pre- This should provide some respite for the industry, and the number of
pandemic level – and will probably remain so for a while – but there is still trade workers has increased to keep pace. Philadelphia also stands to
plenty to do. The city is seeing a mix of new residential, commercial, and benefit from the potential reshoring of manufacturing, as it is a city with
cultural projects, as well as the expansion of citywide infrastructure such cheap land, abundant labor, and a low (albeit rising) cost of living. CONTACT: Mo Shehata, Vice President, CM
as its public transportation network. Things like a rising cost of living and However, since the onset of the Covid-19 pandemic, record-high mshehata@cumming-group.com
a lack of available housing pose challenges for the market and have made construction costs and delays have plagued the development and
it hard for young people to find their footing. homebuilding industries. Costs rose by almost 10% in 2022 and should
only begin to come down sometime this year.
$40,000
2017 2018 2019 2020 2021 2022 2023 2024 120 9.23%
Residential
$35,000
Total Increase -0.9% -2.7% 1.7% 1.9% 3.2% -14.4% -3.7% 4.1% 100 7.69%
$30,000
Residential 3.6% -9.0% -5.3% 13.1% 32.9% -17.3% -9.1% 10.3%
Unemploy. Rate
80 6.15%
Trade Workers
$25,000
Commercial 2.8% 1.8% 0.7% -1.8% -9.5% -9.8% -6.3% -7.8%
$20,000 60 4.62%
Manufacturing -13.5% -3.1% 5.6% -9.6% -2.7% 5.3% 4.6% -5.8%
$15,000 40 3.08%
Healthcare 4.3% -3.8% 0.6% -1.9% -3.0% -11.0% -6.4% 4.2%
$10,000
Education 2.5% -0.4% 1.5% -1.9% -15.5% -15.9% -1.2% 4.0% 20 1.54%
$5,000
Other Structure* 6.9% 2.5% 1.3% 5.9% -14.4% -14.3% -3.4% 1.6% 0 0
0
Infrastructure -11.0% -1.0% 10.7% -1.8% -1.3% -17.0% 3.9% 7.1% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


1.35
1.30 4.00 ExxonMobil Petrochemical Plant Beaver 10.00B
2.00
1.25 I-78 Recon-Berks County Line to SR 100 Allentown 0.41B
0
1.20 -2.00 PA-309 Warehouse Project Center Valley 0.41B
1.15 -4.00
Partnership 81 Ashley 0.29B
1.10 -6.00
-8.00 Air Products Redevelopment - Prologis Warehouses Allentown 0.28B
1.05
-10.00
1.00 Roadway and Bridge Reconstruction Between Milepost 12.02 Chippewa
-12.00 0.27B
and Milepost 14.01 in Beaver County Township
0.95 -14.00
0.90 -16.00 Tower Place Bethlehem 0.24B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 401 & 403 Washington Street / Multi Residential Conshohocken 0.23B
US 30 and PA 82 Interchange Imp Coatesville 0.21B

SR 30 and Airport Rd Interchange Imp. Coatesville 0.20B
SOURCE: ReedConnect
43
Raleigh, NC
The Research Triangle is one of the fastest-growing metro areas in the (hence the nickname) and stands to benefit from increasing costs on the
country, in one of the best states in the country for business. Several West Coast and renewed interest in domestic manufacturing.
high-profile projects – chief among them a mixed-use development next The Research Triangle has averaged around 6% growth over the last two
to Raleigh’s Union Station – have fueled the local construction market and years, although 2022 is expected to be the end. We expect the market to
will continue to do so in 2023 and beyond. Many of these are related to decline by about 2% next year. Projects that began during the pandemic CONTACT: Jeremy Holt, Managing Director
manufacturing and technology – and include factories for electric vehicle are expected to wrap up this year, and a cooling economy means that jholt@cumming-group.com
batteries, supersonic business jets, and cameras and optical equipment. there should be fewer new projects to replace them. Our research
suggests that the Research Triangle will remain a steady market,
The Research Triangle has long been a hub for science and technology however, through at least 2024.
60 9.00%
2017 2018 2019 2020 2021 2022 2023 2024 55 8.25%
Residential $24,000
50 7.50%
Total Increase 4.5% 2.6% -1.8% 9.3% 5.9% -2.3% -7.1% 3.6%
$20,000 45 6.75%
Residential 9.4% 2.2% -7.5% 16.3% 18.5% 3.0% -12.0% 3.5% 40 6.00%
Unemploy. Rate
Trade Workers
$16,000 35 5.25%
Commercial 4.3% 3.4% 2.0% 2.7% -10.0% -9.7% -5.5% -6.1% 30 4.50%
Manufacturing -14.1% -2.2% 7.1% -6.5% 1.2% 5.4% 4.7% -5.1% $12,000 25 3.75%
20 3.00%
Healthcare 9.6% -0.2% 4.0% 4.9% -2.0% -7.8% -8.3% 3.2% $8,000 15 2.25%
10 1.50%
Education 7.0% 3.3% 5.2% 1.8% -12.4% -17.2% -1.6% 5.8%
$4,000 5 0.75%
Other Structure* 7.0% 2.7% 1.1% 11.4% -9.9% -12.0% -2.1% 1.8% 0 0
0
Infrastructure -4.1% 3.9% 5.7% 1.7% -7.1% -9.6% 4.9% 8.7% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST


1.45 Veridea Mixed-Use Development Apex 3.00B
8.00
1.40
Caldwell Business Park Charlotte 1.00B
1.35 6.00
1.30 RFQ Engineering - Fourth Parallel Runway Program Charlotte 0.92B
1.25 4.00
Queens Park Commons Charlotte 0.85B
1.20 2.00
1.15 Apple Campus - Research Triangle Park Cary 0.85B
1.10 0
Epic Games Global Headquarters Building Cary 0.82B
1.05
-2.00
1.00 Queensbridge Collective Charlotte 0.75B
0.95 -4.00
Duke Energy Corp Office Tower Phase 1 Charlotte 0.68B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
I-74 Industrial Center Asheboro 0.62B
State U.S. City Construct. Vol. Labor Seventh & Tryon Mixed Use Development Charlotte 0.60B
44
Washington, D.C.
Washington DC is a major economic center in the US and enjoys a robust Overall, the area continues to have a mixed performance. There has been
construction market driven by the need for new residential, commercial, a broad tightening of the infrastructure and education sectors, but
government, and infrastructure projects. The area enjoys some insulation commercial and residential construction have made gains. The labor force
from economic shocks thanks to the high concentration of government has steadily increased, although not enough to replace the workers who
workers. Federal workers aren’t subject to economic fluctuations like the left the market due to COVID. Unemployment remains slightly above its CONTACT: Steve Griffiths, Managing Director
private sector – the Postal Service doesn’t exactly lay off workers in pre-pandemic level as well, hinting at the overall mixed performance in steven.griffiths@cumming-group.com
recessions – so employment here remains relatively consistent. This, in the 2020s.
turn, keeps demand high and other private sector employees working.
$60,000 180 6.50%

2017 2018 2019 2020 2021 2022 2023 2024
Total Increase 0.9% -3.2% 2.9% -0.6% -9.5% -4.4% -6.0% 2.0% $50,000
160 4.88%
Residential 4.5% -7.2% 0.5% 0.5% -5.0% 4.0% -12.2% 2.5%
Unemploy. Rate
$40,000 150 4.06%
Trade Workers
Commercial 1.2% 2.3% 2.8% -2.1% -14.2% -13.8% -7.0% -5.1% 140 3.25%
$30,000
Manufacturing -12.8% -2.6% 6.9% -7.9% -1.6% 4.1% 5.1% -4.4% 130 2.44%
Healthcare 3.7% -2.6% 3.3% -2.6% -7.0% -9.3% -3.5% 1.6% $20,000
120 1.63%
Education 2.1% 1.0% 1.2% -1.4% -18.9% -18.0% -0.4% 6.2% $10,000 110 0.81%
Other Structure* 5.2% 1.7% 1.5% 11.8% -13.3% -14.4% -3.2% 1.7% 100 0
0
Infrastructure -11.4% 0.9% 11.9% -6.7% -13.2% -12.7% 13.6% 3.4% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 2023 2024
HISTORIC FORECAST

4.00 Washington Commanders NFL Football Stadium Complex Washington DC 3.00B

1.40
2.00 Poplar Point Waterfront Redevelopment Washington DC 2.00B
1.30
0 Hill East's Reservation 13 Washington DC 0.90B
1.20
-2.00 McMillan Sand Filtration Plant Redevelopment Washington DC 0.72B
1.10
-4.00 Burnham Place at Union Station Washington DC 0.70B
1.00
-6.00 Howard University Replacement Hospital Washington DC 0.65B
0.90 -8.00
Potomac River Tunnel Contract B - Tunnel System Construction Washington DC 0.55B
0.80 -10.00
Design/Build Regional Office Building Modernization Project Washington DC 0.55B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Henry J. Daly Building Renovation Washington DC 0.50B
State U.S. City Construct. Vol. Labor Howard University East Towers Washington DC 0.50B
45

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Q1

U.S. CONSTRUCTION MARKET OVERVIEW

TOTAL CONSTRUCTION MARKET FORECAST

booming and in recession, and this is giving

U.S. Construction Market Overview Q1 2023.............................................. 2

cools and there is a continuation of the pre-

Residential Commercial Manufacturing Healthcare Education Other Struct Infrastructure

1,000 1.33% 10%

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“Attracting more diverse talent as quickly

as possible is imperative, and we are seeing

companies heavily invest in DEI strategies and

attracting talent for underserved communities

including from overseas.”

AIA ARCHITECTURAL BILLINGS INDEXAIA(ABI)

infrastructure is long overdue for improvements.

NAT’L (2016-CURRENT) RATE REGIONAL

AIA Architectural Billings Index - Regional (12 Months)

Gypsum products 10.7%

Declining demand in many markets has 5.0 25%

Market Price Index (MPI)

to their use in the market for electric vehicles

“Energy costs have declined almost 40%

thanks to a mild winter (which we expand

on further in the “energy” section of this

report), while shipping costs are down a little

over 20% due to the cooling economy.”

Regulators are of course watching these

Forecast - Wall Street Journal - Bi-monthly Survey

“Recent trends have been encouraging, with the number of

U.S. ANNUAL GROSS

In addition to GDP, there are many other indicators that 6.0%

Forecast - Wall Street Journal - Bi-monthly Survey

Forecast - Wall Street Journal - Bi-monthly Survey

“The Consumer Price Index is a measure of inflation and

Forecast - Wall Street Journal - Bi-monthly Survey

10-YEAR TREASURY NOTES

$450 $450 $450

$400 $400 $400

$350 $350 $350

$300 $300 $300

$250 $250 $250

SOURCE: Federal Deposit Insurance Corporation

SOURCE: Sourced from FRED - Monthly Data

1.40 50.00 Project Name Location Value

Dry Dock 3 Replacement Honolulu 8.00B

Waikapu Country Town Wailuku 0.60B

communications, and public recreation projects.

1.90 20.00 Project Name Location Value

1.80 Bleutech Park Las Vegas Las Vegas 7.50B

1.20 Redwood EV Battery Materials Facility Expansion Lockwood 1.10B

SOURCE: IHS-Market SOURCE: ReedConnect SOURCE: ReedConnect

$100,000 280 12.00%