1. 2008 McGraw-Hill Construction Outlook Cliff Brewis Senior Director Editorial McGraw-Hill Construction

2. 2 U.S. Macroeconomic Picture

3. 3 Default Rates Source: Mortgage Bankers’ Association 2.48% to 3.47% Over 3.47% Under 2.47% Seriously Delinquent Rate, Q4

4. 4 U.S. Macroeconomic Picture Tighter lending standards are a major constraint for 2008.

5. 5 World Growth Remains Strong Source: Global Insight and S&P Real GDP, % change

6. 6 Points of Perspective -- U.S. Construction

7. 7 Major U.S. Construction Sectors (Starts)

8. 8 U.S. Single Family Housing

9. 9 Default Rates Source: Mortgage Bankers’ Association 2.48% to 3.47% Over 3.47% Under 2.47% Seriously Delinquent Rate, Q4

10. 10 U.S. Multifamily Housing

11. 11 U.S. Multifamily Housing Top 10 Metros -- ranked by new dwelling units Year 2007, %ch 07/06 1. New York -35% 2. Chicago -21% 3. Atlanta -1% 4. Seattle +18% 5. Miami -51% 6. Orlando FL -6% 7. Washington DC -19% 8. Houston +14% 9. Los Angeles -42% 10. Boston -8% Year 2006, %ch 06/05 1. New York -1% 2. Miami -22% 3. Chicago +32% 4. Los Angeles +23% 5. Dallas-Ft.Worth +28% 6. Washington DC -20% 7. Atlanta -20% 8. Orlando FL +21% 9. Seattle +39% 10. Houston -6%

12. 12 U.S. Commercial Bldgs. -- Stores

13. 13 Borrowing Against Your Home Source: Freddie Mac

14. 14 U.S. Commercial Bldgs.-- Hotels

15. 15 U.S. Commercial Bldgs. -- Hotels Top 10 Metros -- ranked by new square feet Year 2006, %ch 06/05 1. Las Vegas +866% 2. Atlantic City +++% 3. San Diego +228% 4. Phoenix +531% 5. Dallas-Ft. Worth +116% 6. New York +45% 7. Los Angeles +136% 8. Chicago +35% 9. New London CT +++% 10. Miami +58% Year 2007, %ch 07/06 1. Las Vegas -65% 2. Orlando +190% 3. Los Angeles +35% 4. Chicago +26% 5. Washington DC +132% 6. New York -5% 7. San Antonio +201% 8. Atlanta +65% 9. Phoenix -33% 10. Dallas-Ft. Worth -35%

16. 16 U.S. Commercial Bldgs. -- Offices

17. 17 U.S. Commercial Bldgs. -- Offices Office Building Factors

18. 18 U.S. Commercial Bldgs. -- Offices Top 10 Metros -- ranked by new square feet Year 2006, %ch 06/05 1. Washington DC +29% 2. New York +62% 3. Dallas-Ft. Worth +33% 4. Phoenix -12% 5. Miami +17% 6. Chicago +157% 7. Atlanta +27% 8. Houston +50% 9. Los Angeles -2% 10. Seattle +335% Year 2007, %ch 07/06 1. Phoenix +24% 2. Washington DC -19% 3. Atlanta +36% 4. Chicago +24% 5. Miami +17% 6. Dallas-Ft. Worth -31% 7. Houston -4% 8. Seattle -7% 9. Charlotte NC +82% 10. New York -49%

19. 19 U.S. Macroeconomic Picture

20. 20 U.S. Institutional -- Educational Bldgs. 2006 2007 YTD Primary, Jr. Highs +1% -7% High Schools +15% -6% Colleges/Univ. +6% +5% Libraries -1% -7% Laboratories -24% +20% Museums +2% -7% Comm. Colleges +43% -12% Vocational Schools +35% -50%

21. 21 U.S. Institutional -- Educational Bldgs.

22. 22 Educational Buildings Top 10 States -- ranked by sq. ft. of new starts Year 2007 YTD, %ch 07/06 1. Texas +2% 2. Florida -1% 3. Georgia +33% 4. California -12% 5. North Carolina +3% 6. Ohio -33% 7. Pennsylvania -27% 8. Illinois +2% 9. New York +9% 10. Arizona -12% Year 2006, %ch 06/05 1. Texas +5% 2. Florida +22% 3. California +12% 4. Ohio +18% 5. Pennsylvania +61% 6. Georgia -4% 7. North Carolina +8% 8. Illinois +2% 9. Virginia +31% 10. Arizona +63% U.S. Institutional -- Educational Bldgs.

23. 23 U.S. Institutional -- Healthcare Buildings

24. 24 Year 2007 YTD, %ch 07/06 1. California +32% 2. Florida -31% 3. Texas -42% 4. Ohio -1% 5. Indiana -4% 6. Illinois -4% 7. Michigan -6% 8. Arizona -3% 9. Tennessee +24% 10. Washington +16% Year 2006, %ch 06/05 1. Texas +40% 2. Florida +7% 3. California -6% 4. Indiana +50% 5. New York +49% 6. Ohio -38% 7. Pennsylvania -3% 8. Illinois -1% 9. Michigan -4% 10. Maryland +190% U.S. Institutional – Healthcare Bldgs. Healthcare Buildings Top 10 States -- ranked by sq. ft. of new starts

25. 25 U.S. Institutional Buildings

26. 26 U.S. Institutional Buildings

27. 27 U.S. Manufacturing Buildings

28. 28 U.S. Public Works -- Highways & Bridges

29. 29 U.S. Public Works -- Environmental

30. 30 U.S. Total Construction Starts for 2008 Billions of Dollars 2004 2005 2006 2007 2008 Total Construction593.2670.2684.7625.4579.0 +12%+13%+2%-9% -7% Single Family Housing 282.7315.5272.4201.4169.3 +17%+12%-14%-26% -16% Multifamily Housing 50.568.769.962.1 53.1 +23%+36%+2%-11% -14% Commercial Bldgs.67.372.391.997.9 91.6 +14%+7%+27% +7% -6% Institutional Bldgs.89.1 99.9109.9115.3117.6 -1% +12%+10%+5% +2% Manufacturing Bldgs.8.010.113.416.615.0 +17%+26%+33%+23% -10% Public Works88.295.9112.4119.3120.0 +6%+9%+17%+6% +1% Electric Utilities 7.37.814.712.8 12.4 -18%+6%+89%-13% -3%

31. 31 Questions? Cliff Brewis Senior Director Editorial McGraw-Hill Construction Cliff_brewis@mcgraw-hill.com