2019 State of the Industry Report AGC’s 2019 Conference Surety Bonding & Construction Risk Management January 28, 2019 - 4:30 PM to 6:00 PM William McConnell, PE JD CDT, The Vertex Companies, Inc . 1 PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION
Presentation Overview Part 1. State of the U.S. Economy Part 2. State of the U.S. Construction Industry Part 3. State of the U.S. Surety Industry PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 2
Volatile Equities Markets Source: https://markets.businessinsider.com/news/stocks/stock-market-news-on-track-worst-december-since-great-depression-2018-12-1027837251 PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 3
Equities Markets are Volatile Source: https://fred.stlouisfed.org/series/DJIA#0 PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 4
S&P 500 P/E Ratio as of 1/14/19 (trailing earnings) http://www.multpl.com/ PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 5
What is a Bear Market? A bear market is a condition in which securities prices fall 20 percent or more from recent highs amid widespread pessimism and negative investor sentiment. Source: https://www.investopedia.com/terms/b/bullmarket.asp PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 6
The Bull of Bull Runs – as of 8/22/18 Source: https://www.cnbc.com/2018/08/22/longest-bull-market-since-world-war-ii-likely-to-go-on-because-us-is-best-game-in-town.html PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 7
Volatile Equities Markets Source: https://www.cnbc.com/2018/12/05/big-money-investors-see-the-bull-market-ending-in-2019.html PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 8
Record Corporate Profits Source: https://fred.stlouisfed.org/series/CPATAX PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 9
Consumer Confidence Remains High Source: https://tradingeconomics.com/united-states/consumer-confidence PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 10
Business Optimism is Pulling Back Source: https://tradingeconomics.com/united-states/business-confidence PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 11
GDP Growth is Strong (Quarterly) Source: https://tradingeconomics.com/united-states/gdp-growth PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 12
GDP Growth is Strong (Annual) Source: https://tradingeconomics.com/united-states/gdp-growth-annual PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 13
Unemployment is Remarkably Low Source: https://fred.stlouisfed.org/series/UNRATE PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 14
Corporate Capex is Surging Source: https://www.marketwatch.com/story/capex-is-starting-to-ramp-up-but-will-it-make-a-difference-for-stocks-2018-06-25 PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 15
Corporate Capex is Surging Source: https://www.cnbc.com/2018/09/17/companies-are-using-the-tax-cut-both-to-buy-back-their-own-shares-and-to-invest-in-the-future.html PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 16
Household Debt Service is in Good Shape Source: https://fred.stlouisfed.org/series/TDSP PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 17
M&A Activity is Surging Source: http://dmi.thomsonreuters.com/Content/Files/3Q2018_MA_Legal_Advisor_Review.pdf PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 18
Wages are on the Rise Source: https://fred.stlouisfed.org/series/ECIALLCIV#0 PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 19
Federal Funds Rate is on the Rise (2.25 – 2.5%) Source: https://fred.stlouisfed.org/series/FEDFUNDS PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 20
Inflation Continues to be Low to Moderate Source: https://www.bls.gov/news.release/pdf/cpi.pdf PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 21
Inflation is Moderate Source: https://www.bls.gov/news.release/pdf/cpi.pdf PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 22
Inflation v. Federal Funds Rate Source: https://fred.stlouisfed.org/series/MEDCPIM158SFRBCLE PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 23
Inverted Yield Curve, Explained Source: https://www.money-zine.com/definitions/investing-dictionary/inverted-yield-curve/ PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 24
Inverted Yield Curves - Historical Source: https://fred.stlouisfed.org/series/T10Y2Y PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 25
The Yield Curve Inverted on 12/3/18 Source: https://www.blo omberg.com/opi nion/articles/20 18-12-03/u-s- yield-curve-just- inverted-that-s- huge PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 26
Tariff Review Source: https://www.wto.org/english/tratop_e/tariffs_e/tariff_data_e.htm PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 27
Corporate Growth is Outpacing GDP Growth Source: https://fred.stlouisfed.org/series/GDP#0 PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 28
Fed Deficit is Large Despite the Surging Economy Source: https://fred.stlouisfed.org/series/FYFSD PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 29
Fed Deficit is Large Despite the Surging Economy Source: https://www.usatoday.com/story/money/economy/2018/11/04/federal-budget-deficit-2018-us-government/38319775/ PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 30
Fed Deficit is Large Despite the Surging Economy Source: https://www.forbes.com/sites/chuckjones/2018/11/30/trumps-economy-the-federal-budget-deficit-is-on-a-path-to-1-trillion/#548e5b36231c PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 31
Fed Debt is…Scary Source: https://fred.stlouisfed.org/series/GFDEGDQ188S PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 32
Fed Debt is…Scary Source: https://en.wikipedia.org/wiki/National_debt_of_the_United_States#/media/File:US_Federal_Debt_as_Percent_of_GDP_by_President_(1940_to_2015).png PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 33
Fed Debt is…Scary Source: https://fred.stlouisfed.org/series/A091RC1Q027SBEA PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 34
Fed Debt is…Scary Source: https://www.gao.gov/assets/700/692666.pdf PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 35
Presentation Overview Part 1. State of the U.S. Economy Part 2. State of the U.S. Construction Industry Part 3. State of the U.S. Surety Industry PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 36
Building & Construction ETF (Yahoo Finance) Source: Yahoo Finance PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 37
Construction Spending is at a Record High Source: https://www.census.gov/construction/c30/c30index.html PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 38
Construction Spending is at a Record High Source: https://www.census.gov/construction/c30/c30index.html PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 39
Construction Spending is at a Record High Source: https://fred.stlouisfed.org/series/TTLCONS PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 40
Construction Spending is Forecasted to Level Off Source: http://digital.bnpmedia.com/publication/?i=546193#{%22issue_id%22:546193,%22page%22:0} PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 41
Construction Spending is at a Record High Source: https://www.census.gov/construction/c30/c30index.html PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 42
Flip on Growth Source: https://www.census.gov/construction/c30/c30index.html PRELIMINARY WORK PRODUCT – PRIVILEGED & CONFIDENTIAL – ATTORNEY CLIENT COMMUNICATION 43
Recommend
More recommend
