Economic Forecast
Latest Economic Reports
FCW prime
Vol. 4 No. 13
Up-to-the-minute News and Information for flooring executives
November 20, 2009
Construction in 2010
Robert Murray, vice president, economic affairs, McGraw-Hill Construction, spoke to members about the construction industry outlook for 2010. With total construction down 25 percent in 2009 and construction unemployment down 12 percent, the commercial building sector is still in deep decline. He believes the recovery will be "U" shaped. "Unemployment declines are slowing but still present," Murray said. "It's moving in the right direction but we are still losing jobs. We should start to see some of money from the Stimulus Act in public works projects in 2010."
Construction spending to keep falling
by Denver and SouthFlorida Business Journal
U.S. construction spending is expected to fall 12 percent this year and 4 percent next year, according to IHS Global Insight Third Quarter Construction Briefing.
That’s the bad news. The good news is that real total construction spending is expected to rebound with double-digit growth on an annual basis in 2011 and 2012.“The mixed outlook for the construction market mirrors the mixed outlook for the broad economy,” IHS Global Insight noted in its report. “While the outlook for nonresidential construction is weak for this year and next, residential construction – driven by a single-family market verging on recovery – is expected to expand in the second half of 2009, climbing 2.1 percent, quarter-on-quarter, in the third quarter and 4.8 percent in the fourth."Commercial construction is expected to fall 27.9 percent this year, while occupancy rates in commercial properties – such as office buildings, hotels and retail stores – are falling and rents continue to drop.“The combination of shrinking revenue and tight credit markets is acting as a roadblock to businesses seeking additional financing,” IHS noted.
Among other findings:
- On an annual basis, total manufacturing construction spending is forecast to fall 41.5 percent in 2010 and an additional 12 percent in 2011 before recovering in 2012.
- Total spending on hospitals and other health care buildings continues to increase steadily, driven particularly by rapid expansion in public health care construction.
- Excluding power segment construction, which will decline, infrastructure construction is forecast to rise 6.4 percent in 2010 and 4.5 percent in 2011.
- Spending on transportation infrastructure will see moderate increases in 2010. The stimulus package includes $13 billion for rail projects. However, transit systems in several major cities are facing deficits equal to at least 12 percent of their operating budgets.
FCW prime
Vol. 4 No. 02
Up-to-the-minute News and Information for flooring executives
January 26, 2009
Steep decline forecasted for nonresidential construction in 2009
By Liz Switzer
As the U.S. economy continues to struggle, nonresidential construction spending is expected to decrease by 11 percent in 2009 with commercial projects -- including office buildings, hotel and retail establishments -- experiencing the most significant drop in activity. However, prices have declined for key construction commodities, according to the American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation's leading construction forecasters.
In the commercial/industrial sector, hotel activity is expected to decline by as much as 20.2 percent followed by an almost 20-percent decline in retail construction; 17.5 percent in office building; and more than 11 percent in industrial facilities. Projections for 2010 are also negative for all four areas with a further decline of 12.2 percent in hotel construction followed by a 6-percent drop in retail; 11.1 percent in office buildings; and 8.4 percent in industrial facilities.
"As profits for businesses have fallen and the ability to get credit to finance projects has become far more difficult, construction plans have been put on hold or canceled outright in recent months," said AIA chief economist Kermit Baker."This is not expected to turn around anytime soon and it's likely to get worse before it gets better."
But there is a positive note as the downturn in nonresidential activity has helped stabilize construction costs, Baker added. "Prices for steel, gypsum products, lumber and cement have all come down recently which makes taking on projects more attractive to developers," he said.
To revitalize the building sector, which accounts for about one in every $10 of the United States GDP, the AIA has developed the Rebuild and Renew Plan, which details its recommendations for the allocation of funds in President Obama's economic recovery plan. If implemented correctly, the nearly $100-billion plan would create 1.6 million jobs throughout the design and construction industry, according to the AIA.
Associated Press
Construction spending falls less than expected
By MARTIN CRUTSINGER , 01.05.09, 10:46 AM EST
Construction spending fell less than expected in November as record activity on nonresidential projects helped offset another steep decline in housing. The outlook, however, is for significant weakness as the worst recession in at least a quarter-century takes its toll on construction.
The Commerce Department reported Monday that construction spending dropped by 0.6 percent in November, less than half of the 1.3 percent decline economists expected. A 4.2 percent fall in housing construction was partially offset by a surprisingly strong 0.7 percent rise in nonresidential activity.
But economists expect housing, which has been in a slump for two years, will continue to struggle in the months ahead. They also are concerned that nonresidential projects will falter as developers deal with a severe financial crisis making it hard to get financing amid a yearlong recession that has curbed the appetite for new shopping centers and office buildings.
The 0.6 percent decline in total construction followed a 0.4 percent drop in October. The October performance was revised upward from an original estimate that construction had dropped 1.2 percent that month.
The back-to-back declines left construction at a seasonally adjusted annual rate of $1.078 trillion, down 3.3 percent from a year ago.
The prolonged weakness in housing, where the current economic troubles began, is showing no signs of bottoming out. Sales of both new and existing homes along with home prices are continuing to plunge, while rising foreclosures are dumping more unsold homes on the already glutted market.
For November, the 4.2 percent drop in home construction left residential activity at a seasonally adjusted annual rate of $328.3 billion, down 23.4 percent from a year ago.
The nation's homebuilders have been reporting large financial losses as demand keeps falling even as they slash production. Hovnanian Enterprises Inc., based in Red Bank, N.J., reported last month that its fiscal fourth-quarter loss totaled $450.5 million as revenue fell by 48 percent.
The 0.7 percent rise in nonresidential building left the sector at an all-time high of $428.2 billion at an annual rate, following a 0.4 percent drop in October. But economists are forecasting more declines as the prolonged recession cuts demand for new shopping centers and office buildings, and the worst financial crisis since the 1930s makes it harder for builders to obtain financing.
Nearly 40 percent of real estate investors need to refinance part of their portfolios this year, according to more than 1,100 investors surveyed in October by Marcus & Millichap Real Estate Investment Services and National Real Estate Investor magazine. The investors also expect prices to decline 15 percent on average this year.
General Growth Properties Inc., the country's second-largest mall owner, last month hired a commercial real estate firm to put prominent retail centers in Boston, New York and Baltimore up for sale in a desperate attempt to shore up its finances. The Chicago-based company is saddled with huge amounts of debt it took on during the market's boom years when it aggressively bought assets.
Meanwhile, government spending kept rising in November, climbing 1.4 percent to a record annual rate of $321.95 billion. State and local construction rose by 1 percent to a record annual rate of $295.2 billion, while federal construction was up 6 percent to an all-time high of $26.8 billion at an annual rate.
President-elect Barack Obama is pushing for a massive stimulus plan to keep the economy from falling into an even deeper recession. Part of that plan would involve increased spending for "shovel ready" infrastructure projects including roads and bridges.
Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed -
National Home Builders Association (NHBA) - October 2, 2008
-
Economic Fundamentals Weaken Further
Real gross domestic product (GDP) growth for the second quarter has been revised downward from 3.3% to 2.8% — still a respectable pace. Of more importance, key sectors of the economy weakened considerably during the third quarter and the economy is entering the final quarter of the year in troublesome condition, despite recent declines in oil prices.
The housing sector continues to pull the U.S. economy downward. Housing-related weakness is progressively spreading to other sectors, and credit-market constraints are weighing on virtually all components of spending except for outlays by the federal government.
Consumer spending, accounting for about 70% of overall GDP, has been flagging badly as the special stimulus from the personal tax rebates has run out of steam, as job losses have accumulated and as wealth losses in housing and the stock market have weighed on consumer confidence/sentiment and discretionary spending.
Indeed, real disposable income has been declining in recent months and it’s now pretty clear that real personal consumption expenditures contracted in the third quarter — the first quarterly setback since 1991. Plummeting auto sales are an important part of that story.
The confidence of nonfarm nonresidential businesses also has been shaken badly and recent indictors point to a manufacturing sector in recession and systematic declines in commercial construction as well.
It’s now likely that nonresidential fixed investment, in total, will slip into the red zone in the third quarter of the year and that overall GDP growth will be around zero for that quarter — a percentage point below our most recent baseline forecast.
-
The Probability of Recession Has Risen Considerably
NAHB’s most-recent short-term forecasts for real GDP and payroll employment are being marked down at this time, despite our new monetary policy assumptions, and the forecasts will be fully revised when the dimensions of the financial rescue plan are clear.
On an annual basis, total manufacturing construction spending is forecast to fall 41.5 percent in 2010 and an additional 12 percent in 2011 before recovering in 2012. Total spending on hospitals and other health care buildings continues to increase steadily, driven particularly by rapid expansion in public health care construction. Excluding power segment construction, which will decline, infrastructure construction is forecast to rise 6.4 percent in 2010 and 4.5 percent in 2011. Spending on transportation infrastructure will see moderate increases in 2010. The stimulus package includes $13 billion for rail projects. However, transit systems in several major cities are facing deficits equal to at least 12 percent of their operating budgets.
We’re assuming (provisionally) that something close to the Senate-approved plan will be enacted very soon and that we will not have to deal with financial market Armageddon and associated economic depression.
But recent evidence of economic weakness, substantial wealth losses in equities and housing, and stubbornly tight credit market conditions are likely to take enough additional toll on the economy to justify an official recession “call” by the experts at the National Bureau of Economic Research.
We’re now looking for a medium-sized U.S. recession in 2008 and part of 2009, with a peak unemployment rate around 7% — compared with 6.3% in our most-recent baseline forecast. We still expect the global economy to maintain positive growth throughout this period, and that’s an important call.
The San Diego Union - Tribune - Housing slump seen continuing far into '08 - New-home sales hit a 12-year low - December 29, 2007
--------------------------------------------------------------------------------
Home Builders are sharply curtailing construction and cutting prices across the country to fight the worst housing slump since the early 1990s. Analysts say the market may not bottom out until well into 2008 or even later. Sales of new homes dropped to a 12-year low in November at 647,000, which is the slowest past since April 1995 when sales ran at a pace of 621,000.
New home purchases are down 34.4 percent from a year earlier leaving a large inventory of unsold homes. Potential buyers seem to be waiting for prices to drop further. Tighter credit and the fear of further declines in value limit buyers. Rising foreclosures and a wave of cancellations further hurt the nation's biggest home builders stock prices. Sales are dropping at such a pace that the pullback in newhome building remains insufficient to make any headway in clearing out the sizable inventories of new home for sale.
Analysts say home sales could bottom out as early as middle of 2008 but that recovery will be gradual. It will take a couple of years of reduced home construction in order to clear up the excess inventory. Annual sales in the summer of 2005 was at an all-time high of 1.39 million and have since dropped to an annual rate of 647,000 - a loss of 53.4 percent. Excess inventory going down, prices going down and income continuing to grow will help speed recovery.
NAW SmartBrief Issue - Modern Distribution Management - MAPI Report: Risk of Recession is Rising November 15, 2007
--------------------------------------------------------------------------------
The risk of recession is rising, thanks to the recent housing collapse and credit crunch, rising oil prices, slowing employment growth, and lack of consumer confidence, according to a new report.
The Manufacturers Alliance/MAPI Quarterly Economic Forecast forecasts that inflation-adjusted GDP growth will slow to 2.1 percent in 2007 and to 1.3 percent in 2008. “The U.S. economy in the past has experienced a recession from fewer shocks than we are now experiencing,” said Daniel J. Meckstroth, Manufacturers Alliance/MAPI chief economist.
“By itself the housing collapse would probably not cause a recession, but when combined with a credit crunch, falling housing prices, record oil prices, falling corporate profits, low consumer confidence, and decelerating employment growth, the risk of recession has climbed to at least 50 percent.”
Manufacturing production growth will show a decline from 4.7 percent growth in 2006 to an estimated 1.9 percent in 2007, and is forecast to remain flat in 2008. These figures are down from the previously expected 2 percent and 2.9 percent growth, respectively, in the August forecast.
Production in non-high-tech industries is forecast to grow only 0.9 percent this year and to decline by 1.2 percent in 2008. There is, however, some positive news, as inflation-adjusted spending for computers and electronic products is expected to rise 11.5 percent in 2007 and 10 percent in 2008.
Spending on non-residential structures is forecast to rise a robust 12.1 percent in 2007 but by only 0.8 percent in 2008. The forecast calls for industrial equipment expenditures to increase 2.5 percent before declining by 3.4 percent, respectively, in the same years. The outlook for spending on transportation equipment calls for a 10.3 percent decline in 2007 followed by a further 2 percent decline in 2008. However, aerospace equipment should grow by 11.8 percent in 2007 and by 12.1 percent in 2008.
There are other pockets of optimism. Export growth should outpace that of imports by a wide margin by the end of 2008. Inflation-adjusted exports should rise 7.7 percent in 2007 and 8.7 percent in 2008, while imports are expected to increase 2.1 percent in 2007 and 1.5 percent the following year.
“If the U.S. economy is able to avoid a recession next year, it will be due primarily to the declining value of the dollar and strong global growth, which shows up as substantial growth contribution from net exports,” Meckstroth said. “In addition, government spending growth should contribute positive momentum.”
The forecast for the unemployment rate is 4.6 percent in 2007, rising to 5.3 percent in 2008.
The report expects long-term oil prices to remain relatively high throughout the forecast period but will not consistently exceed $100 per barrel for West Texas Intermediate. Additionally, the forecast predicts housing starts and automobile sales will rebound once credit conditions and economic growth return to normalcy in 2009 and 2010.
Slowing labor force growth due to the baby boom generation leaving the work force and the associated deceleration in productivity growth will keep unemployment relatively low even in an economic slowdown, he added.
Floor Covering Weekly - FCW Prime August 16, 2007:
Remodeling slows in second quarter
[Washington, D.C.] Remodeling activity slowed slightly in the second quarter of 2007, according to the National Association of Home Builders' (NAHB) Remodeling Market Index (RMI). The current market conditions component slipped from 46.1 to 44.8 on a seasonally adjusted basis and the future expectations measure declined by more than two points to 44.1. The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number more than 50 indicates that the majority of remodelers view the market conditions as improving.
"Not surprisingly, the remodeling market is following the downswing we are seeing in the overall housing market," said David Seiders, chief economist, NAHB. "We expect some further erosion in the second half of this year and in 2008, followed by a gradual recovery in 2009 and beyond."
Regionally, the Northeast exhibited some improvement with RMI readings jumping from 43.4 in the first quarter to 49.5, and future expectations remaining relatively flat at 44.1 compared to the previous quarter reading at 44.3. Other regions of the country reported declines in their RMI components. Current conditions in the Midwest fell from 47.5 to 44.5 and future expectations moved from 44.7 to 43.7. In the South, current market conditions declined from 45.9 to 42.3 and future expectations moved from 50.7 to 45. While the West showed a decline in current conditions from 48.2 to 46.8, future expectations rose from 45 to 46.
In the homeowner and rental components of the RMI, current activity for owner-occupied units remained flat at 47.5 compared to 47.7 in the first quarter, while the rental-occupied segment declined from 44.5 to 39.1. The future expectations for owner-occupied units decreased from 46.4 to 43.2, while the rental component declined from 41.4 to 37.3.
Floor Covering Weekly - FCW Prime June 25, 2007:
Housing starts fall, but permits rise in May
[Washington, D.C.] Housing starts slipped 2.1 percent in May to a slightly lower rate than analysts had expected while building permit activity increased more than anticipated, a government report showed.
The start of new homes set an annual pace of 1.474 million units in May compared with 1.506 million in April, according to the Commerce Department. Economists had forecast May housing starts to drop sharply to a 1.480-million-unit pace from 1.528 million originally reported for April last month.
Building permits, which signal future construction plans, rose in May by 3 percent to a pace of 1.501 million units. Economists had been expecting the permits to hit a 1.471-million-unit rate.
Permits for single-family homes fell 1.8 percent to their lowest level since July 1997, but permits for multi-family units jumped 16.5 percent.
Last Tuesday's data comes a day after a report indicating that homebuilder confidence is at its lowest level in more than 16 years.
Readings below 50 indicate more builders view market conditions as poor rather than favorable.
Builder confidence lags
Ongoing concerns about sub prime-related problems in the mortgage market and newfound concerns about rising prime mortgage rates caused builder confidence to decline two more points in June, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), released last week. With a reading of 28, the HMI now is at the lowest level in its current cycle and has reached the lowest point since February 1991.
All three component indexes declined in June. The index gauging current single-family sales slipped two points to 29, the index gauging sales expectations for the next six months fell two points to 39, and the index gauging traffic of prospective buyers fell one point to 21.
Floor Covering Weekly - FCW Prime March 13, 2007:
Remodeling activity remains steady
[Washington, D.C.] Remodeling activity remained steady in the fourth quarter of 2006, according to the National Association of Home Builders' (NAHB) Remodeling Market Index (RMI). The current market conditions index edged up slightly from 47.8 to 48.2 on a seasonally adjusted basis and future expectations moved up to 46.0 from 45.4. (The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects.)
"Remodeling retained strength across most of the country compared to late last year," said Mike Nagel, chairman, NAHB Remodelers. "Certainly regional economies and housing markets play an important role, but overall we see maintenance of high levels of remodeling activity and solid future prospects."
The RMI component for the rental market indicated a strong increase in activity for that sector in the forth quarter of 2006. The current conditions index for renter-occupied markets increased from 38.8 to 44.1, while current conditions in owner-occupied units decreased from 51.4 to 49.7. The future expectations for the renter-occupied units also grew from 37.1 to 42.4, and owner-occupied units edged up from 45.0 to 45.6.
Foreclosures may hit 1.5 million
[New York] As many as 1.5 million more Americans may lose their homes, another 100,000 people in housing-related industries could be fired, and an estimated 100 additional subprime mortgage companies that lend money to people with bad or limited credit may go under, according to realtors, economists, analysts and a Federal Reserve governor.
The spring buying season, when more than half of all U.S. home sales are made, has been so disappointing that the National Association of Home Builders in Washington, D.C., now expects purchases to fall for the sixth consecutive quarter after it predicted a gain just last month.
A five-year housing boom that ended in 2006 expanded homeownership to a record number of U.S. households. Now it has given way to mounting defaults, failing subprime mortgage companies and an increasing number of unsold homes.
Floor Covering Weekly - FCW Prime February 26, 2007:
Q3 recap: Housing weakness impact felt on flooring
U.S. floor covering sales began to feel the full effect of the drop in domestic housing demand in the third quarter of 2006. Total U.S. sales were estimated to have been 7.2 billion square feet this period, down 3 percent from the same period in 2005 and a 4.7-percent drop from the second quarter of 2006, according to Catalina Research, which exclusively provides this information to FCW.
This weakness reflects the sharp drop in residential buidling permits and new housing starts in the third quarter of 2006. U.S. residential buidling permits authorized in the third quarter of 2006 declined by 24.4 percent year over year, while housing starts declined by 19.1 percent over the same period. The weakness was even more severe in the important new single-family home market, Catalina reported. There was also a significant decline in residential existing home resales. At the same time, the gains in new home completions from the higher level of new home starts in late 2005 and early 2006 began to wane. The sharp drop in residential permits and housing starts will result in additional weakness in the builder market over the next few quarters, Catalina reported.
The weakness in the builder market and existing home resales continues to be adversely affected by the peak in housing prices, mortgage interest rates and energy costs earlier in 2006. Currently, however, these drags on demand have become more favorable as home prices leveled off, mortgage interest rates trended downward, and energy costs dropped. In addition, personal income gains are strengthening. These positive factors could result in a turnaround in U.S. housing demand in the second half of 2007.
Meanwhile, manufacturers and marketers are increasing their emphasis on residential remodeling and replacement sales and the nonresidential market, research shows. Residential remodeling and replacement sales are benefiting from stronger personal income gains and spending on nonresidential and public building construction is increasing at relatively strong rates.
In the third quarter of 2006, spending on private nonresidential building construction rose by 21.2 percent over the same period in 2005, while public building construction spending increased by 9.1 percent over the same period. This compares to a 5.1-percent decline in residential construction spending.
The decline in residential construction activity was felt most by manufacturers and marketers of carpet and area rugs, wood and resilient flooring, Catalina Research reports. The decline in carpet and area rug sales accelerated soft surfaces' downward share of total U.S. floor coverings manufacturer sales in 2006. However, the drop in resilient flooring demand was more than offset by rising prices. On the other hand, ceramic tile and laminate flooring continued to gain share over the first three quarters of 2006. However, laminate flooring sales experienced the sharpest drop in demand for any flooring sector from the second quarter to the third quarter of 2006. Laminate flooring sales are estimated to have declined by 8.2 percent over this period. This compares with 4.7 percent for the entire flooring industry.
Builders Report Numbers
The nation's largest homebuilders reported their latest numbers, and they weren't pretty. The drop in sales for their latest marking period ranged from a 37.7-percent plunge for Beazer ($803 million compared to $1.105 billion the previous year), to a 1-percent dip for D.R. Horton, the nation's largest builder ($2.761 billion compared to $2.789 billion the previous year).
Even more telling were the percentage increases of cancellation orders.
Centex said its cancellation of home orders for the third quarter was 38.5 percent and for the nine-month period was 36 percent.
Toll Brothers said its first-quarter backlog was down 30 percent compared to last year, signed contracts were down 34 percent and the first-quarter cancellation rate was 29.8 percent compared to last year's cancellation rate of 8.8 percent.
Backlog for D.R. Horton was down 32 percent, or approximately $1.5 billion; new sales orders were down 23 percent and sales numbers for houses sold were down 38 percent or approximately $874 million.
For NVR, new orders in the fourth quarter were down 17 percent and the cancellation rate was 20 percent compared to 13 percent for the same quarter in 2005. The average sales price for new orders in the fourth quarter fell 10 percent.
Beazer said its cancellations were at a rate of 43 percent compared to 26 percent for the same quarter last year. The backlog was down 53.5 percent, a drop of approximately $1.5 billion.
Ryland reported that closings for the quarter were down 15.8 percent, with the average selling price up 4.2 percent to $298,000 from $286,000. New orders for the fourth quarter were down 44 percent and the backlog was down 50.3 percent compared to the fourth quarter last year.
Floor Covering Weekly - FCW Prime February 12, 2007:
Remodeling survey shows positive signs
A survey of 5,000 homeowners conducted in the fall of 2006 indicates a continued trend toward remodeling and increasing concern for budgets. The study was conducted by Dan Frietschen, author of "remodel or Move: Marke the Right Decision," and "The Complete Remodeling Workbook and Orgnaizer."
"While housing prices falling and interest rates higher than they were a few years ago, homeowners are still remodeling, but with an emphasis on managing costs," Frietschen said. "Just a year ago many homeowners were influenced by the wealth effect and were remodeling with a blank check. What the survey shows is that homeowners are planning to spend about the same amount, but are expecting to get more for their money. Doing some of the work themselves is one way they can reduce the cost."
Among the study's results:
-
32 percent said they plan to act as their own contractor, up from 25 percent in 2005
-
65 percent will do at least a portion of the work, up from 60 percent in 2005
-
50 percent who plan to remodel will spend 30 percent of their home's current value on the project. In 2005 the number was 33 percent
-
55 percent want to remodel the kitchen; 47 percent want to remodel the bathroom
-
50 percent want more rooms such as dens and bedrooms. 57 percent plan to add one or more baths
Portland Cement Associations Economic Forecast November 8, 2006:
Housing Drop Contributes to Lower Forecast for Cement
Cement Intensity Increases Expected to Soften Decrease in Consumption
SKOKIE, Ill.--According to the most recent forecast from the Economic Research department at Portland Cement Association (PCA) although cement consumption is not projected to decline, only marginal gains are expected.
The fall forecast, presented last week at the PCA Board of Directors Meeting in Sea Island, Ga., by chief economist Ed Sullivan, revises cement consumption growth for 2006 to an increase of .6%. An even more modest growth rate of .3% is expected in 2007 with more robust trends returning in 2008 when cement consumption is projected to increase by 2.7%.
The flattening of the market, according to Sullivan, is the combined result of the decline in the housing industry and softer overall economic conditions. "In recent years the U.S. and the cement industry have experienced unprecedented growth. However, construction activity is starting to soften and this will create an adverse impact on cement consumption."
Sullivan sees cement intensity growth as key to market growth during the next couple of years. Cement intensities refers to the tons of cement per dollar of construction activity.
"Our forecast projects that cement intensities will increase by 2% in 2007, fueled by a favorable relative price position versus asphalt and steel, as well as a shift towards higher cement usage construction projects," Sullivan said. "Code changes in hurricane-prone regions, improved concrete products, and concrete’s growth as a 'green' building material will all contribute to this despite a decrease in construction activity."
Additionally, the PCA fall forecast does not expect the sharp decline in housing to continue at the current rate. Sullivan says the recent downward change in the housing market was driven by the departure of speculators from the market. Their exit will actually help introduce a correction to housing prices and improve affordability for the average homebuyer.
Ceramic Tile And Stone Consultants (CTaSC) reports:
USA per capita consumption of Ceramic Tile was 11.1 sf per capita in 2005, as compared to 2005 figures for Spain at 102.3 sf per capita, Italy at 35.6 sf per capita, Brazil at 25.9 sf and China at 16.5 sf per capita (based on 1.3 billion population). This is indicative of the huge growth USA has realized from 3 ft per capita about ten years ago, and is an indication of the potential huge growth we have ahead of us.
William R. Holland, radio talk host and Senior VP at Prudential Securities, reported at the San Diego Tile Contractors Association on January 22, 2003 the following:
-
DJIA was at 11,722 and dropped 42% in the last three years; 27% dropped in 2002 alone...ouch!
-
1939-1941 was the last time the market was down three years in a row; never has it been down four years in a row
-
We are at Zero Inflation
-
$6.6 Trillion is not invested in the market and accumulating at the rate of $1 billion per day; institutional investors holding back until market improves; and it will...
-
Predicts DJIA will be at 30,000 by end of decade
-
77% of new mortgages are refinances
-
China has a capitalistic population with a communist government that lets them prosper; China will continue to grow
-
If Government eliminated taxes for those who make $40k or less annually, it would only reduce tax revenue by 1%
-
Growth will continue in the Technological Revolution, Health Care, Housing, Automobiles, and Energy
-
Economy is in a slight recovery
We will continue to update and add to this economic summary to help give a quick and clear view of the state of the economy.
