Very interesting presentation. Credit to Rusty Sherwood, McGraw-Hill and SMPS for a great event.

1. San Francisco
Market Insight
US Construction 2010
Regional projections
key trends & business
implications
Is there an upside (to this “downsized” market)?!
Rusty Sherwood I Vice President
January 21, 2009 I San Francisco, CA
1 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

2. McGraw-Hill Construction
Market leadership for more than a century…
History
Founded by James H. McGraw, Frederick W. Dodge
and Clinton Sweet Over 100 Years Ago
Leading provider of
construction information Today
Founded over 100 Connecting
Serves One Million Customers Within the $4.6
years ago Trillion Global Construction Community, Helping
Key industry alliances
people and products
Industry Enterprises Save Time, Money and Energy
Over 1,000,000
to projects…
customers through the four business essentials
Serving the private construction information
Find Sell & Market
Get Smarter over 100 Seen &
Founded
Get
sector, government and years ago Selected Opportunity Smarter
financial communities MHC Integrated
• Key industry alliances
MHC MHC Network® MHC
Over 1,000,000
Research & Media: & Dodge Performance
customers
Analytics Print, Online,
Serving private sector, Database Tools
government, financial Events
community
2 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

3. Trends
US & Global
– Sustainability/Green Building Job Creation
– Interoperability and BIM
– Workforce/Labor
– Innovation
Capital
– Materials
– Project Delivery Methods
Innovation
3 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

4. What’s the score?
Jobs…employment declines are slowing, but still present
Change in Employment
Jan-June '09 Jul-Oct. '09
Thousands of Workers -560,000/ mo -217,000/ mo
450
300
150
As of November 2009…
0
-150
• 10.2% unemployment, heading
-300
7.3 million jobs lost
Jan.'08- Oct. '09
for 10.? by mid-’10
-450
-600
• Rate of descent is slowing
-750 • 6.8+ million jobs lost in current
01 02 03 04 05 06 07 08 09 10
recession
Unemployment Rate Oct. '09
10.2%
• 18.5% construction
Percent
11
unemployment vs 8% 2008
10
9
8
7
6
5
4
3
01 02 03 04 05 06 07 08 09 10
4 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

5. What’s the score?
Capital…
Signs of loosening, but on what terms?!
Survey of Bank Lending Officers Delinquency Rate, Percent
Percent Reporting Tighter Lending Standards --
Commercial Real Estate Loans
Commercial Real Estate Loans 14
90
75 12
60 10
45
8
30
6
15
0 4
-15 2
-30 0
90 92 94 96 98 00 02 04 06 08 10 90 92 94 96 98 00 02 04 06 08 10
For prime residential and commercial mortgages some 40% of banks said
standards would be tougher than normal “for the foreseeable future”.
James Cooper, Business Outlook
Businessweek 9/7/2009
“Canary in the coalmine”
… commercial real estate loan defaults are accelerating;
significant volume maturing in 2010
5 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

6. Other points of concern…
What About Inflationary Pressures?
Drop in Materials Prices Bottoming Out
BUT
Fierce Competition cutting margins
Constructions Costs well below 2008
Composite measure of building material
prices slipped another 0.5% in
November
www.enr – eCover 24 September 2009
6 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

7. What’s the score?
Recovery…
Real GDP Growth - Quarterly The recession is expected to be
'09 Q3
Annualized Percent Change the longest and deepest since the
+3.5%
1930s
8
6 Fiscal stimulus will support the
4 recovery
2 But recovery is likely to be slow
0 because of financial markets and
-2 switch to higher savings
-4
If financial markets lock up again
-6
01 02 03 04 05 06 07 08 09 10 And, home prices continue to fall
GDP Pattern: And, oil prices continue to rise
History Forecast The recession could be longer and
2007 2008 2009 2010 deeper
With the risk of a “lost decade”
+2.1% +0.4% -2.6% +1.8%
similar to Japan in the 1990s
What shape will the recovery be? Source: David Wyss Chief Economist Standard
& Poors October 2009
V or U or L or W ?
(Probably U-shaped.)
7 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

8. Trends
US & Global
Not yet
– Sustainability/Green Building
– Interoperability and BIM
Job Creation
– Workforce/Labor
– Innovation
– Materials Improving
Capital
– Project Delivery Methods
Emerging Innovation
8 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

9. Trends
US & Global
– Sustainability/Green Building
– Interoperability and BIM Stimulus
– Workforce/Labor n. pl. stim·u·li (-l )
1. Something causing or regarded as causing a response.
– Innovation
2. An agent, action, or condition that elicits or accelerates a physiological or
– Materials
psychological activity or response.
3. Something that incites or rouses to action; an incentive: "Works which were in
– Project Delivery Methods
themselves poor have often proved a stimulus to the imagination" (W.H. Auden).
9 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

10. What about the stimulus?!
$787.2 Billion
ARRA is and will have direct and notable impact on
construction activity
“ …the most sweeping
economic recovery
package in U.S.
history…
President Barack Obama
Signed Denver, CO
”
Expect more stimulus construction activity in
2010-2011!
10 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

11. What’s the hold-up?
Procurement underway…some bottlenecks…
New GSA Contracts
Starting To Surge
GSA contract awards top $1 billion,
but lawmakers and AGC criticize
other agencies’ slow pace
08/05/2009
By Tom Ichniowski and Pam Hunter
As the American Recovery and Reinvestment
Act approaches its sixth month on the books,
$158M GSA project: Commerce HQ overhaul
the General Services Administration’s $5.5-
billion ARRA-funded program to build or Awarded to: Gilbane & Grunley Const
upgrade scores of federal buildings suddenly
has begun to take off. But critics continue to GSA $1.5B in ARRA awards to date
complain that other agencies are not turning
their construction stimulus money into jobs- Another $4B to be allocated
producing contracts fast enough.
11 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

12. Is it really happening?
Procurement underway…numbers show acceleration
According to McGraw-Hill
Construction’s dB of ARRA projects…
– States have allocated $18B of highway
aid
– $8.0B of total construction projects funded
by ARRA from March thru July
– Representing 6% of total general building
construction & infrastructure starts
– Yielding $137B in starts, 32% down over
prior year vs $129B 36% down without
ARRA
– 93% of ARRA projects started are
infrastructure
12 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

13. Is it really happening?
Water projects lagging…buy America creating challenges
EPA – quick allocation to states for
wastewater treatment and sewer
projects
Hold up at state level
Only $100M outlayed – out of $8 Billion
Buy America clause possible challenge
in purchase of manufactured products
like membranes
– Emerged as top issue for Canada
– Special meeting between Canadian Prime
Minister Harper and Obama
– U.S. Chamber of Commerce concerned
about backlash
13 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

14. Yes, ARRA funded construction is happening!
Pulled from the regional headlines…
•10/14/2009 Hungry Contractor Bids Low To Win
California Freeway Job – ENR
•10/14/2009 Brownfield Stimulus Funds Jump-
Start San Francisco Redevelopment Project – ENR
•10/14/2009 Rural California City Leverages ARRA
Funds To Build Better Treatment Plant – ENR
•10/02/2009 OPINION High-Speed Rail Authority
Applies for Federal Stimulus Funds – California
Construction
•10/02/2009 Calif. Seeks $4.7B from Feds for High-
Speed Rail Line – ENR
•09/26/2009 L.A. Seeks Fed Funds for Rail Projects
– ENR
•09/24/2009 Skanska Says It Won Big Calif.
Stimulus Highway Job – ENR
•09/22/2009 Calif. to Apply for $1.28B for High-
Speed Rail – ENR
Free access to news & analysis http://construction.com/stimulus/
http://construction.com
14 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

15. Yes, ARRA funded construction is happening!
ARRA dollars are flowing, projects are accelerating…
“Stimulus” projects in “Network” as of 12/15/09…
Total
ARRA Total Value
Region Shovel Ready Recovery
Stim ulus Recovery Tracked
Tracked
ENC 1850 3497 5347 $19,547,742,835
ESC 537 1404 1941 $16,020,693,734
MATL 951 1344 2295 $36,113,868,967
NENG 1391 753 2144 $10,444,137,793
PNW 277 1142 1419 $5,983,001,711
PSW 1361 2110 3471 $34,380,472,312
SATL 1344 2839 4183 $31,111,659,361
WNC 1273 1546 2819 $12,311,485,907
WSC 716 1962 2678 $18,639,633,715
US 9700 16597 26297 $184,552,696,335
Nationally
$184.5B in ARRA + Shovel Ready value
3,975 “funded” projects in planning
6,517 “funded” projects in construction
6.112 “funded” projects out for bid
15 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

16. Total Construction Starts
National & West
regional 2009-2010
Total Construction Starts
(Billions of Dollars)
National West
Total Construction Total Construction
Millions of Dollars Millions of Dollars
800,000 200,000
700,000
600,000 150,000
500,000
400,000 100,000
300,000 +11% +14%
200,000 50,000
100,000
0 0
86
88
90
92
94
96
98
00
02
04
06
08
10
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 total starts $419B, - 25% from 2008 2009 W starts $96.4B, - 21.8% from 2008
2010 total starts $466B, + 11% from 2009 2010 W starts $109.9B, + 14% from 2009
16 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

17. Residential bottoming out in 2009,
Early signs point to an upturn in 2010…
Residential
(Billions of Dollars)
Single Family Housing Multifamily Housing
Millions of Dollars Millions of Dollars
100,000 20,000
80,000
15,000
60,000
+39.3% 10,000
40,000
+12.2%
20,000 5,000
0
0
86
88
90
92
94
96
98
00
02
04
06
08
10
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $22.6B, -18.4% from 2008 2009 W starts $3.67B, -61.1% from 2008
2010 W starts $31.5B, +39.3% from 2009 2010 W starts $4.1B, +12.2% from 2009
2010 West Single Family construction tracking ABOVE national
Multi Family construction tracking BELOW national
Inventories are settling back – starts and sales are recovering!!
Prices nationally are down 31% from their peak
Stimulus benefits via HUD; guidelines announced May for $980M devel block grants
17 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

18. Highway and Bridge Construction
Continued improvement Under Stimulus
Construction Starts Including Stimulus Effect
(Billions of Dollars)
Bridges Streets
Millions of Dollars Millions of Dollars
4,000 +14.7% 12,000 +8.7%
3,500 10,000
3,000
2,500 8,000
2,000 6,000
1,500
4,000
1,000
500 2,000
0 0
86
88
90
92
94
96
98
00
02
04
06
08
10
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $2.84B, +4.2% from 2008 2009 W starts $9.7B, -5.1% from 2008
2010 W starts $3.26B +14.7% from 2009 2010 W starts $10.5B, +8.7% from 2009
2010 West Bridge construction tracking ABOVE national
Highway construction tracking BELOW national
California #2 in $ starts for ‘09 Highway & Bridges construction
Debate continues on trans bill to replace SAFETEA-LU
18 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

19. Environmental Public Works
Expect improvement from ARRA after slow start
Environmental Public Works Construction Starts
(Billions of Dollars)
Water Sewers
Millions of Dollars Millions of Dollars
5,000 6,000
5,000
4,000 +24%
4,000
3,000
3,000
2,000 +20.3% 2,000
1,000 1,000
0 0
86
88
90
92
94
96
98
00
02
04
06
08
10
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $2.95B, -34.3% from 2008 2009 W starts $3.1B, -22.8% from 2008
2010 W starts $3.55B, +20.3% from 2009 2010 W starts $3.84B, +24% from 2009
2010 WEST Environmental construction tracking ABOVE national
19 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

20. Other Public Works Will Benefit
Transit/Rail Improving nationally, mixed regionally
Other Public Works, Including Transit/Rail
(Billions of Dollars)
Other Nonbuilding
Millions of Dollars
+18.7%
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $6.38B, +2.5% from 2008
2010 W starts $7.57B, +18.7% from 2009
2010 West Other Public Works construction tracking ABOVE national
20 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

21. Electric Utilities Will Stay
at Relative High Volume with some Stimulus
Electric Utilities, Including SmartGrid
(Billions of Dollars)
Utilities
Millions of Dollars
8,000
7,000
6,000
5,000
4,000
3,000
+16%
2,000
1,000
0
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $2.99B, -54.5% from 2008
2010 W starts $3.47B, +16% from 2009
2010 West Energy construction tracking ABOVE national
Energy Bills – tax incentives for oil and gas production, electric utilities,
transmission lines, etc. extended with financial rescue packages
21 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

22. Renewable energy
Big focus on renewable energy
Investment in Renewable Energy &
Conservation
– "Smart-Grid" activities $11B
– Energy efficiency grants $6.3B
– Renewable energy loan guarantees $6B
Incentives: Manufacture of
Green Energy Products
Stimulus Boosts Solar Marketplace:
NJ to add 120 MW solar power to brown fields
and undeveloped properties
1 Block Off the Grid, the solar group purchasing
program is expanding
Expect more support: invented AND manufactured in US
22 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

23. Energy Generation
further points of perspective
LT Outlook for Electric Power, Gas and
Communications is positive
– LT demand for power will rise
– Need for transmission upgrades to enable
renewable energy use
– Requirements of new renewable portfolio
standards
– $23 to $24B by 2013
Pending legislation to limit carbon dioxide
emissions major factor in present / future
generation methods
The “renaissance” of nuclear still in infancy
3 to 4 years to review, evaluate and approve a
new reactor
High cost / high value and…long construction
cycle
23 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

24. Energy Generation
large projects…
Value Start Date
$ Millions City State Year: Mo
1,500.0 John W Turk Jr Coal Fueled Power Plant Fulton AR 2009:01
864.0 West County Energy Ctr. Nat.Gas Power Plant Ph 3 Palm Beach FL 2009:02
619.0 580 MW Bear Garden Power Station New Canton VA 2009:06
600.0 Coolidge Generating Plant Coolidge AZ 2009:08
500.0 PSNH Scrubber Facility & WWTP Bow NH 2009:02
476.0 Martin Solar 75 MW Solar Thermal Steam Gen. Facility Indiantown FL 2009:02
440.0 Wind Turbine Electricity Generating Plant Not Available IA 2009:02
300.0 Papalote Creek 180 MW Wind Farm Taft TX 2009:02
300.0 Natural Gas Fired Combined Cycle Plant Unit 4 Kissimmee FL 2009:04
250.0 PrairieWinds Wind Power Plant Minot ND 2009:08
233.6 Wind Farm Wellsboro PA 2009:08
200.0 Desoto Next Generation Solar Energy Center Not Available FL 2009:03
200.0 Crane Creek Wind Farm Riceville IA 2009:05
170.0 Beech Ridge Wind Farm - Phase 1 Rupert WV 2009:04
Expansion in fossil-based gen continues, but alternative methods are gaining steam
24 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

25. Public Buildings, While a Small Category,
Stimulus boosting activity; holding steady in West
Public Buildings
(Billions of Dollars)
Government Service Buildings
Millions of Dollars
4,000 +6.9%
3,500
3,000
2,500
2,000
1,500
1,000
500
0
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $3.33B, +26.9% from 2008
2010 W starts $3.56B, +6.9% from 2009
2010 West Public Building construction starts tracking BELOW national levels
25 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

26. Renovation
Green Wins in Stimulus:
Renovation Gets a Boost in Green
Much of Public Building $$ to Green
Renovation Projects
– GSA $4.5 billion
– DOD $4.2 billion
– VA $1 billion
Tax breaks for Residential Energy
Efficiency expanded & extended
Stimulus in Action:
• Minnesota uses $148.6 million to renovate
schools and public facilities
• Philadelphia Housing Authority will use the
$90 million in stimulus funds to completely
renovate and provide energy upgrades for
300 houses and apartments
26 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

27. Healthcare Facilities
2010 rebound after modest 2009 decline
Healthcare Construction Starts
(Billions of Dollars)
Healthcare Facilities
Millions of Dollars
7,000 +7.9%
6,000
5,000
4,000
3,000
2,000
1,000
0
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $5.72B, FLAT from 2008
2010 W starts $6.18B, +7.9% from 2009
2010 West Healthcare construction tracking ABOVE national levels
Hospital chains hit hard by tight credit conditions; healthcare reform
debate creates uncertainty
$430M Kaiser Permanente Hospital Fontana, CA 2009:03
27 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

28. Educational Buildings Will Settle Back,
State budgets curtailing K-12; Higher-ed holding
Educational Buildings
(Billions of Dollars)
Educational Buildings Dormitories
Millions of Dollars Millions of Dollars
16,000 1600
14,000 1400
12,000 1200
10,000 1000
8,000 800
6,000 -3% 600 -11%
4,000 400
2,000 200
0 0
86
88
90
92
94
96
98
00
02
04
06
08
10
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $9.42B, -33.9% from 2008 2009 W starts $987M, -31.7% from 2008
2010 W starts $9.14B, -3% from 2009 2010 W starts $881M -11% from 2009
2010 West Education construction starts tracking BELOW national levels
Major universities increased capital spending plans – but now under re-evaluation
20 states have implemented cuts to K-12 education
28 states have implemented cuts to public colleges & universities
28 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

29. Office Construction in Retreat,
Upturn was measured this time, however…
Office Construction Starts
(Billions of Dollars)
Office Buildings
Millions of Dollars
10,000
8,000
6,000
- 1.8%
4,000
2,000
0
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $4.04B, -32% from 2008
2010 W starts $3.97B, -1.8% from 2009
2010 West Office construction starts tracking ABOVE national levels
Tight credit conditions causing more and more projects to be deferred
Rents and vacancies deteriorating in difficult economic climate
New York #2 nationally in 2009 new square feet
29 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

30. Store Construction in Sharp Correction,
As goes consumer spending, so goes…
Stores and Shopping Centers Warehouses
(Billions of Dollars) (Billions of Dollars)
Retail Warehouse
Millions of Dollars Millions of Dollars
8,000 4,000
7,000 3,500
6,000 3,000
5,000 2,500
4,000 2,000
- 2%
3,000 1,500
2,000 1,000
1,000
- 6.5% 500
0 0
86
88
90
92
94
96
98
00
02
04
06
08
10
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $2.78B, -43.7% from 2008 2009 W starts $1.15B, -55.5% from 2008
2010 W starts $2.6B, -6.5% from 2009 2010 W starts $1.13B, -2% from 2009
2010 West Retail construction starts tracking BELOW national levels
Impact of slow retail sales – reduced store openings, store closings
US consumer expected to remain cautious in near term
30 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

31. Hotel Construction in Sharp Correction,
Similar story…
Hotels and Motels
(Billions of Dollars)
Hotels
Millions of Dollars
8,000
7,000
6,000
5,000
4,000
3,000 - 7.3%
2,000
1,000
0
86
88
90
92
94
96
98
00
02
04
06
08
10
2009 W starts $1.49B, -46.2% from 2008
2010 W starts $1.38B -7.3% from 2009
2010 West Hotel construction starts tracking ABOVE national levels
Negatives: weak economy, reduced business travel, hotel/casino overbuilding
31 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

32. The bottom line…
2010 West, across the three categories…
Residential Nonresidential Non-building
Total Residential Total Nonresidential Total Nonbuilding
Millions of Dollars Millions of Dollars Millions of Dollars
120,000 70,000 40,000
60,000 35,000
100,000
50,000 30,000
80,000 25,000
40,000
60,000 20,000
30,000
15,000
40,000 20,000 10,000
20,000 10,000 5,000
0 0 0
86 88 90 92 94 96 98 00 02 04 06 08 10
86
88
90
92
94
96
98
00
02
04
06
08
10
86
88
90
92
94
96
98
00
02
04
06
08
10
Overall 2010 vs 2009 +35.6% Overall 2010 vs 2009 -1.9% Overall 2010 vs 2009 +16.5%
$35.6B in starts forecasted $39.1B in starts forecasted $35.1B in starts forecasted
A low base but turning upward Tracking at US growth %’age Benefiting from ARRA
Tracking above US avg Tracking above US avg
32 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

33. Nationally…
Total Construction Starts bottoming 2009, improving 2010
Billions of Dollars
2005 2006 2007 2008 2009 2010
Total Construction 670.3 689.6 639.2 554.9 418.9 466.2
+13% +3% -7% -13% -25% +11%
Single Family Housing 315.5 272.4 201.2 122.4 95.3 126.2
+12% -14% -26% -39% -22% +32%
Multifamily Housing 68.6 69.8 61.4 39.7 18.2 21.1
+36% +2% -12% -35% -54% +16%
Commercial Bldgs. 72.2 93.0 100.8 84.5 48.2 46.1
+7% +29% +8% -16% -43% -4%
Institutional Bldgs. 100.1 110.8 117.6 129.3 110.2 111.1
+12% +11% +6% +10% -15% +1%
Manufacturing Bldgs. 10.1 13.5 20.4 28.9 10.9 9.4
+26% +33% +51% +41% -62% -14%
Public Works 96.0 112.4 121.7 120 119.7 136.3
+9% +17% +8% -1% -0- +14%
Electric Utilities 7.9 17.7 17.8 30.2 16.5 16.0
+6% +125% +1% +70% -45% -3%
33 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

34. West Index of growth…
As goes the West so goes the US
Billions of Dollars
2005 2006 2007 2008 2009 2010
Total Construction
M-H 670.3 689.6 639.2
Construction Starts 554.9 418.9 466.2
+13% +3% -7% -13% -25% +11%
Indexed, 1991 = 100
Single Family Housing
400 315.5 272.4 201.2 122.4 95.3 126.2
+12% -14% -26% -39% -22% +32%
350
Multifamily Housing 68.6 69.8 61.4 39.7 18.2 21.1
300 +36% +2% -12% -35% -54% +40%
250 United States
Commercial Bldgs. 72.2 93.0 100.8 84.5 48.2 46.1
200 +7% +29% +8% -16% -43% -4%
West
150
Institutional Bldgs. 100.1 110.8 117.6 129.3 110.2 111.1
100 +12% +11% +6% +10% -15% +1%
Manufacturing Bldgs.
50 10.1 13.5 20.4 28.9 10.9 9.4
+26% +33%
88 90 92 94 96 98 00 +51%
02 04 +41%
06 08 -62%
10 -14%
Public Works 96.0 112.4 121.7 120 119.7 136.3
+9% +17% +8% -1% -0- +14%
Electric Utilities 7.9 17.7 17.8 30.2 16.5 16.0
+6% +125% +1% +70% -45% -3%
34 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

35. A new cycle emerging?
The cyclical nature of business & construction
Total Construction Activity by Cycle
Cyclical Trough (T) = 100, Based on Constant 2000 Dollars
190
1991-2009
175
160
1975-1982
145
1982-1991
130
115
100
85
T T+2 T+4 T+6 T+8 T+10 T+12 T+14 T+16 T+18
Years from Cyclical Trough
35 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

36. The longer the down cycle…
Replacement demand + Industry Confidence
US Construction over the next 25 years…
50% of Building Stock Will Be New – Built After 2000
New Building Stock Will Represent 127 Billion Additional Sq Ft
Most Growth Will Be in the South and West
ENR Construction Industry Confidence Index…
752 AEC firms; inception 4/2009; 1 to 100 scale; quarterly updates
44% predict market improvement next 12 to 18 mths raising CICI to 30
Segments with highest CICI: power (59),
transportation (57), water (56), healthcare (53) &
education (49)
Segments with lowest CICI: retail (17), office (19), hospitality (23)
multi-family (25)
…the greater the “spring load”
36 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

37. Trends
US & Global
– Sustainability/Green Building
– Interoperability and BIM
– Workforce/Labor
Not if…
– Innovation
– Materials
– Project Delivery Methods
but different
construction hemlines & trends
37 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

38. Trends
US & Global
– Sustainability/Green Building
“Overall, industry specific
– Interoperability and BIM
– Workforce/Labor
innovation does not follow,
– Innovation
– Materials creates expansion”
but
– Project Delivery Methods of capitalism”
“The Instability
- Joseph Schumpeter –
1928
38 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

39. What’s the score?
Innovation…
Unprecedented levels entering construction marketplace
Areas of Innovation with Greatest
Many global firm leaders believe Expected Impact on Future Business
innovation in technology and
processes will help solve their New Construction
Safety & Health Methods & Processes
biggest concerns of Workforce 13%
29%
Advances in technology are
fueling alternative delivery Other Green
16% Building
methods and sustainable “smart” 16%
design
All bringing the potential of
greater value to the building
owner Intelligent Building
& Infrastructure Pre-Fabrication
13% & Modularization
13%
39 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

40. Present Trends…
Numerous factors impacting industry direction / growth
Global Markets & Influences
– China impact
– Emergence of India + Middle East
Project Attributes
– Sustainability/Green Building
– Renovation
– Renewable Energy
– Water Efficiency
– New Materials Project
Design & Construction Influences
Productivity
– Workforce
– Interoperability/BIM
– Pre-fabrication & Modularization
Alternative Construction Financing
– Public-Private Partnerships
Infrastructure requirements
40 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

41. Project attributes…
Green Construction tripling in the United States by 2013
140
120 Upper Market Size
Lower Market Size
100
Triple
Market Size
$ (billions)
80
60
Double
Triple
40
Five
Fold
20
0
Total Non-Res Residential Total Non-Res Residential Total Non-Res Residential
2005 2008 2013
CONSTRUCTION TRENDS
41 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

42. Project attributes…
Green is growing despite declining new building
construction
= Commercial &
Institutional Market
$245
Billion = Green Market
$29
Billion
$182
Billion
$208
Billion
$3
Billion
2005 2006 2007 2008 2009
CONSTRUCTION TRENDS
Source:
Commercial & Institutional Market Size: McGraw-Hill Construction, as of January 27, 2009. MHC Housing Starts data is similar to the
Census Bureau, except that MHC defines single family housing as detached housing only. MHC includes townhomes in its multifamily
data.
42 McGraw-Hill Construction Confidential. All information presentedBuilding: Green Trends Driving Market Change, McGraw-Hill Construction, 2008
Green Market Size: Commercial & Institutional Green © McGraw-Hill Construction, 2009. All rights reserved.

43. Project Attributes…
Corporate sustainability practices continue to rise
Corporate Leaders:
– Over one-third of companies (36%)
are positioning themselves around
green and sustainability, up from
only 18% in 2007
– Nearly all firms (95%) are
undertaking at least some
sustainability practices
CONSTRUCTION TRENDS
Source: The Greening of Corporate America SmartMarket Report, McGraw-Hill Construction, 2007; Bernstein,
Harvey. Presentation. Construction Industry Trends. McGraw-Hill Companies Offices, New York, NY, May 2009.
(based on 2009 market research data conducted by McGraw-Hill Construction in 2009)
43 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

44. Project Attributes…
Building green is proving to be smart business
Perceived Advantages of Building Green from AEC firms and Owners
2005 2008
Decreased Operating Costs: 8-9% 13.6%
Increased Building Values: 7.5% 10.9%
Improvement in ROI: 6.6% 9.9%
Increased Occupancy: 3.5% 6.4%
Rent Rise: 3.0% 6.1%
Increased revenue flows: 71% 77%
Increased profits: 59% 61%
Advantages are Increasing Over Time!
“When Aardex developed the Signature Centre (LEED certified), the market sat at 15%
CONSTRUCTION TRENDS
vacancy… all 300,000 sqft were leased 5 months before completion –
and for nearly double the going rents of surrounding buildings.”
44 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.
Source: The Denver Post 9/8/2009

45. Project Attributes…
Water efficiency rapidly growing in importance
• Becoming one of the Next 5 Years Currently
most important
aspects of a green
building Energy 91%
efficiency 96%
• Correlation
beginning to emerge
between saving
water and saving Water use 69%
energy reduction 85%
CONSTRUCTION TRENDS
45 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

46. The correlation between growth & innovation…
Focus on productivity gains is driving innovation
Increases in Productivity Broadly Influence Society
By Improving Standards and Creating Income
46 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

47. Design & Construction Productivity…
The case for Digital Design & Construction has been made
Digital Design shifts the bulk of project work to the
Design phase to help coordinate building systems
s
ge
and the project and manage project costs
Abili
an
Ch
ty t
n
ig
es
o
D
co
f
t o
ntr
Effort
os
ol
Digital Traditional C
co
Design
st
Design
Litigation
Phase
Design Design Devel Const Docs Construction
CONSTRUCTION TRENDS Time Source: International Alliance for Interoperability, 2007
47 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.

48. Design & Construction Productivity…
And now adoption is increasing
Adoption of BIM Increasing Over 2009
% of Total Projects Expected % of Total Projects
2008 2009 18%
35% 1-15%
38%
45% 16-30%
31-59%
20% >60%
10%
17% 17%
Architects Engineers Contractors Owners
23%
54% 35% 43% 38% 41%
43% 46%
12% 60%+
8%
20% 15% 8% 31-59%
11% 16% 11%
21% 10%
14%
22% 10% 16-30%
20% 35%
45% 41% 1-15%
12% 36%
32% 33%
21%
12% 12%
CONSTRUCTION TRENDS
2008 2009 2008 2009 2008 2009 2008 2009
48 McGraw-Hill Construction Confidential. All information presented © McGraw-Hill Construction, 2009. All rights reserved.