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The Economic Outlook for
Building Materials:
New Opportunities and Risks in the
Evolving Business Cycle
Dr. Bill Conerly
for
Composite Panel Association
June 1, 2015
0
1
2
3
4
2011 2012 2013 2014 2015 2016
perc
en
t ch
an
ge
U.S. Real GDP Growth
0
1
2
3
4
2011 2012 2013 2014 2015 2016
perc
en
t c
han
ge
Canada Real GDP GrowthIMF Forecast
0
1
2
3
4
5
2011 2012 2013 2014 2015 2016
perc
en
t c
han
ge
Mexico Real GDP GrowthIMF Forecast
340
360
380
400
420
440
2011 2012 2013 2014 2015
$ b
illi
on
sRetail Salesexcluding gasoline
6.5
7.0
7.5
8.0
8.5
2011 2012 2013 2014 2015
$ b
illi
on
sRetail Sales: Furniture Stores
Singles
Multis
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2011 2012 2013 2014 2015
mil
lio
ns
of
un
its
Housing Starts
2.0
2.5
3.0
3.5
4.0
4.5
2011 2012 2013 2014 2015
perm
its, m
illi
on
sBuildFax Remodeling Index
20
30
40
50
60
70
2011 2012 2013 2014 2015
$ b
illi
on
sCommercial Construction
All Items
Ex Food & Energy
-1
0
1
2
3
4
2011 2012 2013 2014 2015
% c
han
ge 1
2 m
on
ths
InflationConsumer Price Index
0
1
2
3
2011 2012 2013 2014 2015
4-q
uart
er
% c
han
ge
Employment Cost Inflationincluding wages and benefits
West Texas
0
20
40
60
80
100
120
2011 2012 2013 2014 2015
$ /
barr
el
Oil Prices
3-monthT-bill
30-year mortgage
0
1
2
3
4
5
6
2011 2012 2013 2014 2015 2016
perc
en
tInterest Rate Forecast
90
95
100
105
110
115
120
2011 2012 2013 2014 2015
ind
ex
Foreign Exchange Value of $trade-weighted index
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2007 2008 2009 2010 2011 2012 2013 2014 2015
$ t
rill
ion
sBank Reserves
0
5
10
15
20
25
30
perc
en
tRisk of Recession
Wall Street Journal survey
May: 12%
Sources of Uncertainty
Economy
Technology
Social Attitudes
Government
Competition
The Flexible Stance
Operating Plans
What would I do if the recession hits?
What would I do in a strong recovery?
Areas of Concern
Sales/marketing
Inventories
Capital spending
Staff
Working capital
Lines of business
The Nutshell
Most likely
Better markets for composite panels
Stronger growth in rest of 2015 & 2016
Higher interest rates
Oil prices around $60 - $70
Downside Upside
Weak retail spend Consumer optimism
Recession Stronger building
Dollar rises Dollar falls
Questions?
Bill @ ConerlyConsulting.com
one “n”
