Cliff Brewis Vice President Operations Dodge Data & Analytics
U.S. Macroeconomic Outlook The U.S. economy has performed in a conservative range since the recession. Do we expect that to change? GDP Pattern: History Forecast 2013 2014 2015 2016 2017 +1.7% +2.4% +2.6% +1.6% +2.3% Significance of Employment Growth and Productivity Trump Impact: Stimulate the Economy: Deregulation Affordable Care Act Tax Cuts Infrastructure Area of Concern : Trade War: Mexico & China Budget Deficit Distractions BOOKEND SLIDE
U.S. Macroeconomic Outlook For consumption to continue and employment growth to slow gradually, wages need to increase. BOOKEND SLIDE
U.S. Macroeconomic Outlook Increased Federal spending already locked in Fixing America’s Surface Transportation (FAST) Act Enacted on December 4. $305 billion over a five-year period – highways, $230 bil.; public transit, $61 bill., Amtrak, $10 bil., safety programs, $5 bil. Fiscal 2016 Federal Appropriations Raises federal-aid obligation ceiling 5% to $42.4 billion Raises Federal Transit Admin.’s budget 8% to $11.8 billion. FAA Airport Improvement grants held at $3.4 billion GSA’s construction account tripled to $1.6 billion VA major construction account doubled to $1.2 billion Corps of Engineers civil works acct. raised 10% to $6 billion. Water Resources Development Act ($10.3 bil. +) Infrastructure plans BOOKEND SLIDE
Infrastructure Considerations Potential for Consensus but framework is not clear Current Status Highway Trust Fund Operating at a Deficit Consensus: Infrastructure Under funded Trump Plan $1 Trillion program $200 Billion Public Contribution 80+% Tax Reductions Reduced Lending Costs Revenue Sources Offset by Payroll Taxes Local Funding 75% of Current funding from State Impact of Tax Plan on Muni Bonds BOOKEND SLIDE
New Mexico Gross Domestic Product By the end of 2016, NM was still showing declines in GDP. There was an expectation of a modest increase in 2017. Issues: Out migration Urban vs. Rural Oil Prices Stabilizing Public Funding BOOKEND SLIDE
U.S. Macroeconomic Outlook New Mexico unemployment rate is 6.4%. 0.3 of a point better than in January 2017. BOOKEND SLIDE
New Mexico: Tax Revenue 2018 Budget was a difficult process Reached 2018 Agreement Severance Bond Offset Threat to Education Suspend Infrastructure Reduce Rainy Day Fund Fed Cuts to Dept. of Energy
New Mexico: Single Family Conservative increase in housing since recession. ‘$000.00
New Mexico: Multi Family Urban areas are growing and demanding more housing. ‘$000.00
New Mexico: Highways Expect modest gains from Highway Fund. ‘$000.00
New Mexico: Highways Expect modest gains from Highway Fund.
New Mexico: Water Passage of the Water Resources bill is having an impact. ‘$000.00
New Mexico: Water Funding is flowing to water related projects.
New Mexico: Energy, Power Gas Decline from prior year. ‘$000.00
New Mexico: Energy Power Gas Decline from prior year. .
New Mexico: Total Construction
QUESTIONS? Cliff Brewis V P Operations Dodge Data & Analytics Cliff.brewis@construction.com BOOKEND SLIDE
Cliff Brewis Vice President Operations Dodge Data & Analytics