Anika Khan, senior economist, Wells Fargo shares her 2015 Economic Outlook for the construction industry at an AEM regional membership session at Cummins.

1. 2015 Economic Outlook
Anika R. Khan, Senior Economist
June 18, 2015

2. 22
Economic Growth
We are now more than five years into the recovery and economic growth should reach its trend
over the next two years. Despite a recent slowdown in activity due to one-off factors, the
composition of growth will remain broad based
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
Real Private Final SalesReal GDP Forecast
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2000 2002 2004 2006 2008 2010 2012 2014 2016
U.S. Real GDP
Bars = CAGR Line = Yr/Yr Percent Change
GDP - CAGR: Q1 @ -0.7%
GDP - Yr/Yr Percent Change: Q1 @ 2.7%
Forecast
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
2000 2002 2004 2006 2008 2010 2012 2014 2016
Real Private Final Sales to Domestic Purchasers
Bars = CAGR Line = Yr/Yr Percent Change
Real Priv Fin Sales to Dom. Purch. - CAGR: Q1 @ 1.2%
Real Priv Fin Sales to Dom. Purch. - Yr/Yr Pct Chg: Q1 @ 3.4%
Forecast

3. 33
GDP Components
Businesses still have a considerable amount of cash on the sidelines. We expect some of this
money to be redirected into capital spending, but there are downside risks due to the recent
drop in oil prices
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
Cash on SidelinesBusiness Fixed Investment
-30%
-20%
-10%
0%
10%
20%
30%
-30%
-20%
-10%
0%
10%
20%
30%
2000 2002 2004 2006 2008 2010 2012 2014
Capital Spending by Type
Year-over-Year Percent Change
Intellectual Property: Q1 @ 8.1%
Equipment: Q1 @ 5.6%
Structures: Q1 @ -1.0%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14
U.S. Nonfin. Corporate Cash Holdings
Total Assets Market Value, U.S. Nonfinancial Corporations
Cash Ratio: Q4 @ 4.4%
4-Q Moving Average: Q4 @ 4.3%

4. 4
Equipment Spending
Equipment outlays led the economy out of recession in 2010-2011 but have been unimpressive
since
Source: U.S. Department of Commerce, Institute for Supply Management and Wells Fargo Securities, LLC
OrdersEquipment Outlays
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
25
30
35
40
45
50
55
60
65
70
93 95 97 99 01 03 05 07 09 11 13 15
ISM New Orders & Nondef. Cap. Gds. Orders Ex. Aircraft
Index, Year-over-Year Percent Change
ISM New Orders Index, 12-MMA: May @ 57.8 (Left Axis)
Core Capex Orders, 3-MMA: Apr @ -3.4% (Right Axis)
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2000 2002 2004 2006 2008 2010 2012 2014 2016
Real Equipment Investment
Bars = CAGR Line = Yr/Yr Percent Change
Equipment Investment - CAGR: Q1 @ 2.7%
Equipment Investment - Yr/Yr Percent Change: Q1 @ 6.3%
Forecast

5. 5
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2000 2002 2004 2006 2008 2010 2012 2014 2016
Real Nonresidential Construction
Bars = CAGR Line = Yr/Yr Percent Change
Nonres Construction - CAGR: Q1 @ -20.8%
Nonres Construction - Yr/Yr Percent Change: Q1 @ -0.2%
Forecast
Nonresidential Construction
We remain optimistic that
structure investment will
continue to improve later this
year with commercial and
manufacturing leading the way
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

6. Percent change in real GDP by state 2013-2014
U.S. = 2.2%
2.7% - 6.3%
(-1.3)% - 0.7%
1.8% - 2.7%
1.2% - 1.8%
0.7% - 1.2%
AL
AR
AZ
CA
CO
FL
GA
IA
ID
IL IN
KS
KY
LA
ME
MI
MN
MO
MS
MT
NC
ND
NE
NH
NM
NV
NY
OH
OK
OR
PA
SC
SD
TN
TX
UT
VA
VT
WA
WI
WV
WY
0.7
0.8
1.4
2.8
4.7
CT
0.6
DC
1.6
DE
1.2
2.7
2.3
0.4
2.7
1.2 0.4
1.8
1.0
1.9
MA
2.3
MD
0.8
0.2
1.9
1.4
0.9
-1.2
1.8
1.4
6.3
0.7
2.3
NJ
0.4
1.0
1.0
2.5
2.1
2.8
3.6
1.8
RI
1.2
2.2
0.6
1.7
5.2
3.1
0.02
0.6
3.0
1.0
5.1
5.1
AK
-1.3
HI
0.8

7. 77
Oil Prices
Global oil prices have started to increase again, however, it is too early to tell if this trend will
continue. If this is the start of a recovery, we could see a slow in discretionary consumer
spending due to higher gasoline prices
Source: U.S. Energy Information Administration, U.S. Department of Commerce and Wells Fargo Securities, LLC
WTI Oil PricesBrent Oil Prices
$0
$20
$40
$60
$80
$100
$120
$140
$0
$20
$40
$60
$80
$100
$120
$140
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Brent Spot Price
Monthly Average Cash Spot Prices, Dollars per Barrel
Brent Crude: Jun @ $64.18
$0
$20
$40
$60
$80
$100
$120
$140
$0
$20
$40
$60
$80
$100
$120
$140
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
West Texas Intermediate Spot Price
Monthly Average Cash Spot Prices, Dollars per Barrel
WTI: Jun @ $59.80

8. 8
$20
$50
$80
$110
$140
$170
1.0
1.5
2.0
2.5
3.0
3.5
06 07 08 09 10 11 12 13 14
Oil: Total Oil Open Interest Contract vs. Spot Price
In Millions, Dollars per Barrel
Total Open Interest/ Combined Contracts: May @ 2.3M (Left Axis)
Oil Spot Price: May @ $60.30 per Barrel (Right Axis)
Oil Spot Price
Oil prices appear to be
stabilizing for the time being
Source: Bloomberg LP and Wells Fargo Securities, LLC

9. 9
$100
$200
$300
$400
$500
$600
$700
$800
$900
$100
$200
$300
$400
$500
$600
$700
$800
$900
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Corn Price
Dollars per Bushel
Corn: Jun-05 @ $360.50
Commodities
Due to the drop in energy prices
such as ethanol, the price for
corn has also been affected
Source: Bloomberg LP and Wells Fargo Securities, LLC

10. 1010
Mining Investment and Employment
Reflecting the sharp drop in oil prices, the mining component of structure investment tumbled
significantly along with employment
Source: U.S. Energy Information Administration, U.S. Department of Commerce, U.S. Department of Labor and Wells Fargo Securities, LLC
Mining EmploymentMining Investment and Rig Count
-150%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
-150%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Mining Exploration Structure Investment and Rig Count
Annual Growth Rate Percentages
Mining Exploration Structure Investment: Q1 @ -30.3%
Rig Count: Q1 @ -71.0%
-16%
-12%
-8%
-4%
0%
4%
8%
12%
16%
-16%
-12%
-8%
-4%
0%
4%
8%
12%
16%
90 92 94 96 98 00 02 04 06 08 10 12 14
Mining Employment
Year-over-Year Percent Change
Mining Incl. Oil & Gas Extraction: May @ -1.3%
Mining Excl. Oil & Gas Extraction: May @ -2.2%

11. 11
Variables Outcome
Real GDP -0.16%
Real PCE -0.19%
PCE Deflator -0.23%
Real Trade Balance Wider $25B per Quarter
Exports Drop first 4 Quarters, then Stabilize
Imports Continuously Increase
Direction
Macro-Model:
Effects of a 10% Appreciation in the Dollar Index
The U.S. Dollar
Our macro-econometric model
shows that a modest
appreciation of the U.S. dollar
should have a minimal effect on
the U.S. economy
Source: U.S. Department of Commerce , U.S. Treasury and Wells Fargo Securities, LLC

12. 1212
Employment Situation
Job growth appears to have ratcheted up a bit in recent months. Wages are now behaving the
way they have when the economy began to approach full employment
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Unemployment RateNonfarm Employment
-1,000
-800
-600
-400
-200
0
200
400
600
-1,000
-800
-600
-400
-200
0
200
400
600
2007 2008 2009 2010 2011 2012 2013 2014 2015
Nonfarm Employment Change
Change in Employment, In Thousands
Monthly Change: May @ 280K
0%
2%
4%
6%
8%
10%
12%
0%
2%
4%
6%
8%
10%
12%
65 70 75 80 85 90 95 00 05 10 15
Unemployment and Wage Rates
Wages for Production & Nonsupervisory Workers, SA
Unemployment Rate: May @ 5.5%
Hourly Earnings - Yr/Yr % Change: May @ 2.0%

13. 1313
Millennial Housing & Employment
Millennials are a main driving force for apartment demand. We expect apartment activity to
remain robust as there is still pent-up demand as well as increased job growth for this cohort
Source: Fannie Mae, U.S. Department of Labor and Wells Fargo Securities, LLC
Employment by IndustryReasons for Renting
1%
3%
9%
9%
16%
20%
35%
<1%
3%
8%
10%
19%
23%
26%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Protect Against
Home Price Declines
To live in a
Better Neighborhood
Cannot Get
a Mortgage
Less Hassle
and Stress
More Flexibility
More Affordable
Preparing Financially
to Own a Home
What is Your Primary Reason for Renting?
FNMA Survey of Young Renters (Ages 18-39)
Q3 2013
Q3 2012
0% 2% 4% 6% 8% 10% 12% 14% 16%
Utilities
Mining
Agriculture
Wholesale
Information
Public Administration
Trans. & Warehousing
Other Services
Construction
Financial Activities
Education
Manufacturing
Prof. & Business Svcs.
Health & Social Svcs.
Retail
Leisure & Hospitality
Millennial Employment by Industry
Industry Distribution of Workers Ages 16-34
2013
2007

14. 1414
Suburbs vs. Primary Cities
The rate of population growth in some of America’s largest cities is outpacing suburban growth
for the first time in decades
Source: U.S. Department of Commerce , Brookings Institution and Wells Fargo Securities, LLC
Population Growth by MetroPrimary City vs. Suburban
1.12%
0.50%
1.03%
2.31%
1.74%
1.00%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
1990 - 2000 2000 - 2010 2011 - 2013
Pop. Growth - Primary City vs. Suburbs
Annual Average Growth, Percent
Primary City
Suburban
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
Philadelphia
Tampa
Sacramento
Boston
Minneapolis
Columbus
Portland
San Diego
Richmond
New York
Oklahoma City
Seattle
New Orleans
Atlanta
Washington D.C.
Orlando
Denver
Charlotte
Raleigh
Population Growth - Primary City vs. Suburbs
2011 - 2013 Average Annual Growth Rate, Percent
Primary
Suburb

15. 15
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
94 96 98 00 02 04 06 08 10 12 14
In-Store vs. Non-Store Retail Sales
3-Month Moving Average, Year-over-Year Percent Change
Non-Store Retailers: May @ 7.4%
Retail Sales ex. Non-Store Retailers: May @ 1.7%
E-Commerce Effect
Online sales growth is expected
to continue to outpace brick-
and-mortar stores for some time
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

16. 16
8
10
12
14
16
18
20
22
8
10
12
14
16
18
20
22
95 97 99 01 03 05 07 09 11 13 15
Light Vehicle Sales
In Millions, Seasonally Adjusted Annual Rate
Total Light Vehicle Sales: May @ 17.7 Million
Keep America Rolling
Cash For
Clunkers
Employee Pricing for Everyone
Auto Sales
Light vehicle sales are now
above its prerecession peak as
pent-up demand and easy credit
help fuel activity
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

17. 17
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
$5.5
2007 2008 2009 2010 2011 2012 2013 2014 2015
Federal Reserve Balance Sheet vs. S&P 500 Index
Trillions, Index
Agencies & MBS: May @ $1,754.8B (Left Axis)
Treasuries: May @ $2,460.1B (Left Axis)
Other Securities: May @ $218.1B (Left Axis)
S&P 500 Index: May @ 2,088.0 (Right Axis)
Fed Balance Sheet
As expected, the Fed’s bond
buying program ended in
October. Now the focus is on
when the Fed will move on short
term rates
Source: Federal Reserve Board and Wells Fargo Securities, LLC

18. 18
0
50
100
150
200
250
300
350
400
450
500
0
50
100
150
200
250
300
350
400
450
500
0 5 10 15 20 25 30
CumulativeTightening(bps)
Length of Tightening Cycle (Months)
Historic Fed Tightening Cycles
Cumulative Tightening (bps) in Months
Past Tightening Cycles
There have been five
tightening cycles in the
past 25 years
In the 2004 cycle, the Fed
stayed on hold for 12
months and hiked rates
425 bps from 1.00%
Source: Federal Reserve Board and Wells Fargo Securities, LLC
Tightening Last Cut Length of Cumulative Cumulative Tightening Terminal
Cycle to First Hike Tightening Cycle Tightening First Year Fed Funds Rate
1983 - 1984 5.0 Months 16 Months 325 bps 200 bps 11.7 5%
1986 - 1989 4.0 Months 28 Months 387 bps 100 bps 9.7 5%
1994 - 1995 17 Months 13 Months 300 bps 250 bps 6.00%
1999 - 2000 7 Months 12 Months 17 5 bps 17 5 bps 6.50%
2004 - 2006 12 Months 25 Months 425 bps 200 bps 5.25%
Average 9 Months 18.8 Months 322.4 bps 185 bps 7 .85%
T ightening Cycles Since 1983
Historic Fed Tightening Cycles

19. 19
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
Appropriate Pace of Policy Firming
Target Federal Funds Rate at Year-End; Market Data as June 15
March 2015 Median Response
December 2014 Median Response
Futures Market Expectations
2015 2016 Longer Run2017
Pace of Policy Firming
The FOMC Committee
downshifted its expectations for
the Federal Funds rate path in
its recent meeting
Source: Federal Reserve Board and Wells Fargo Securities, LLC

20. Construction

21. 21
0.0
0.3
0.6
0.9
1.2
1.5
1.8
2.1
2.4
0.0
0.3
0.6
0.9
1.2
1.5
1.8
2.1
2.4
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Thousands
Housing Starts
Millions of Units
Multifamily Starts
Multifamily Forecast
Single-family Starts
Single-family Forecast
Forecast
Residential
As economic and labor market
conditions continue to improve,
we expect to see gradual gains in
overall starts
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

22. 2222
Residential
Residential investment spending has made only a marginal contribution to real GDP growth.
However, improving household formations suggest a pick up is imminent
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
Household FormationsResidential Investment Spending
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
85 87 90 93 95 98 01 03 06 09 11 14
Residential Investment Spending
Bar = Compound Annual Rate Line = Percentage Points at Annual Rate
Residential Investment Spending: Q1 @ 4.93% (Right Axis)
Contribution to U.S. Real GDP: Q1 @ 0.16% (Left Axis)
0.0
0.5
1.0
1.5
2.0
2.5
0.0
0.5
1.0
1.5
2.0
2.5
60 64 68 72 76 80 84 88 92 96 00 04 08 12
Household Formations
Average of CPS/ASEC and CPS/HVS, In Millions
Survey Averages: 2014 @ 780K
1948 to 2014 Average

23. 2323
Residential Sales Activity
Sales for new and existing single-family homes are being restrained by a lack of for-sale
inventory and a shortage of developed lots in highly desirable markets
Source: U.S. Department of Commerce, MBA and Wells Fargo Securities, LLC
Mortgage ApplicationsExisting & New Home Sales
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
90 92 94 96 98 00 02 04 06 08 10 12 14
Existing & New Single-Family Home Sales
In Millions, Seasonally Adjusted Annual Rate
New Home Sales: Apr @ 0.5 Million (Left Axis)
Existing Home Sales: Apr @ 4.4 Million (Right Axis)
0
2,000
4,000
6,000
8,000
10,000
12,000
0
100
200
300
400
500
600
94 96 98 00 02 04 06 08 10 12 14
Mortgage Applications
Seasonally Adjusted Index (1990=100); 4-Week Moving Average
Mort. Appl.: 4-Week Average: May-29 @ 200.7 (Left Axis)
Refinances: May-15 @ 1,686.1 (Right Axis)

24. 24
U.S. Housing Forecast
National Housing Outlook
2008 2009 2010 2011 2012 2013 2014 2015 2016
Real GDP, percent change -0.3 -2.8 2.5 1.6 2.3 2.2 2.4 2.2 2.9
Nonfarm Employment, percent change -0.6 -4.3 -0.7 1.2 1.7 1.7 1.9 2.2 1.7
Unemployment Rate 5.8 9.3 9.6 8.9 8.1 7.4 6.2 5.4 5.0
Home Construction
Total Housing Starts, in thousands 905.5 553.9 586.9 608.8 780.6 924.9 1003.3 1,130.0 1,230.0
Single-Family Starts, in thousands 622.0 445.0 471.1 430.5 535.3 617.7 647.8 730.0 820.0
Multifamily Starts, in thousands 283.5 108.9 115.8 178.3 245.3 307.2 355.5 400.0 410.0
Home Sales
New Home Sales, Single-Family, in thousands 485.0 374.0 321.0 305.0 369.0 429.0 437.0 530.0 610.0
Total Existing Home Sales, in thousands 4,110.0 4,340.0 4,190.0 4,260.0 4,660.0 5,090.0 4,940.0 5,150.0 5,400.0
Existing Single-Family Home Sales, in thousands 3,660.0 3,870.0 3,708.0 3,787.0 4,128.0 4,484.0 4,344.0 4,530.0 4,750.0
Existing Condominium & Townhouse Sales, in thousands 450.0 464.0 474.0 477.0 528.0 603.0 591.0 620.0 650.0
Home Prices
Median New Home, $ Thousands 232.1 216.7 221.8 227.2 245.2 268.9 282.8 295.0 305.5
Percent Change -6.4 -6.6 2.4 2.4 7.9 9.7 5.2 4.3 3.6
Median Existing Home, $ Thousands 198.1 172.5 172.9 166.1 176.8 197.1 208.3 219.0 228.0
Percent Change -9.5 -12.9 0.2 -3.9 6.4 11.5 5.7 5.1 4.1
FHFA (OFHEO) Home Price Index (Purch Only), Pct Chg -7.9 -5.7 -3.0 -4.1 3.2 7.5 5.5 4.8 4.2
Case-Shiller C-10 Home Price Index, Percent Change -16.7 -12.9 2.1 -3.5 0.3 11.7 7.9 4.0 3.8
Interest Rates - Annual Averages
Prime Rate 4.88 3.25 3.25 3.25 3.25 3.25 3.25 3.44 4.56
Ten-Year Treasury Note 3.66 3.26 3.22 2.78 1.80 2.35 2.54 2.24 2.66
Conventional 30-Year Fixed Rate, Commitment Rate 6.04 5.04 4.69 4.46 3.66 3.98 4.17 4.05 4.51
One-Year ARM, Effective Rate, Commitment Rate 5.18 4.71 3.79 3.03 2.69 2.61 2.44 2.60 3.00
Forecast as of: June 01, 2015
Source: Federal Reserve Board, FHFA, MBA, NAR, S&P, U.S. Department of Commerce, U.S. Department of Labor and Wells Fargo Securities, LLC
Forecast

25. 25
-12%
-9%
-6%
-3%
0%
3%
6%
9%
12%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Hundreds
Private Nonresidential Construction
Percent Change, 3-Month Moving Average
Year-over-Year: Apr @ 10.5% (Left Axis)
Month-over-Month: Apr @ 2.2% (Right Axis)
Nonresidential Construction
Private nonresidential
construction spending continues
to improve
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

26. 26
-20% -10% 0% 10% 20% 30% 40% 50% 60%
Power
Religious
Communication
Educational
Health Care
Commercial
Retail & Other Commercial
Transportation
Office Buildings
Warehouse
Amusement & Recreation
Manufacturing
Nonresidential
Private Nonresidential Construction Put-in-Place
Year-over-Year Percent Change, Seasonally Adjusted
Private Nonresidential Construction Spending
Manufacturing outlays have
seen strong gains
Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

27. 27
20
30
40
50
60
70
80
-60%
-40%
-20%
0%
20%
40%
60%
00 02 04 06 08 10 12 14
Manufacturing Construction Spending & ISM Survey
3MMA YoY Percent Change, Diffusion Index
Private Manufacturing: Apr @ 50.3% (Left Axis)
ISM Index: May @ 52.8 (Right Axis)
Commercial Construction Spending
The slide in oil prices and harsh
weather conditions could be
playing a role in
weaker-than-expected
manufacturing output
Source: U.S. Department of Commerce, ISM and Wells Fargo Securities, LLC

28. 2828
Leading Indicators
Forward-looking indicators including the Dodge Momentum Index and architectural billings
suggest growth in construction spending should continue to increase through the year
Source: Dodge Data & Analytics, The American Institute of Architects, U.S. Department of Commerce and Wells Fargo Securities, LLC
Architectural Billings IndexDodge Momentum Index
$100
$150
$200
$250
$300
$350
$400
50
75
100
125
150
175
200
02 03 04 05 06 07 08 09 10 11 12 13 14 15
DMI vs. Private Nonresidential Construction Spending
Excl. Manufacturing, (Year 2000=100), Billions
Dodge Momentum Index: May @ 122.3 (Left Axis)
Private Nonres. Construction Spending: Apr @ $295.9B (Right Axis)
-30%
-20%
-10%
0%
10%
20%
20
30
40
50
60
70
96 98 00 02 04 06 08 10 12 14
Architectural Billings vs. Construction Spending
Index, Year-over-Year Percent Change, Seasonally Adjusted
Architecture Billings Index: Apr @ 48.8 (Left Axis)
Private Construction: Mar @ 2.9% (Right Axis)

29. 2929
Construction Employment
Construction labor plunged during the Great Recession, but since then has seen an increase in
gains and a pickup in hours worked
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Hours WorkedConstruction Employment
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
86 88 90 92 94 96 98 00 02 04 06 08 10 12 14
Construction Employment
Year-over-Year Percent Change vs. 3-Month Annualized Rate
3-Month Annualized Rate: May @ 2.5%
Year-over-Year Percent Change: May @ 4.5%
36.0
36.5
37.0
37.5
38.0
38.5
39.0
39.5
40.0
36.0
36.5
37.0
37.5
38.0
38.5
39.0
39.5
40.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Average Weekly Hours-Construction
Private Sector Workers
Average Hours Worked: May @ 38.9

30. 3030
Construction Employment
Inflation in construction labor costs have been generally well contained. However, reported
labor shortages could begin to put upward pressure on wages
Source: U.S. Department of Labor and Wells Fargo Securities, LLC
Wages & SalariesUnemployment vs. Avg. Hourly Earnings
0%
2%
4%
6%
8%
10%
5%
10%
15%
20%
25%
30%
2007 2008 2009 2010 2011 2012 2013 2014 2015
Construction Unemployment vs. Avg. Hourly Earnings
Year-over-Year Percent Change
Construction Unemployment Rate: May @ 7.5% (Left Axis)
Average Hourly Earnings YoY Percent Change: Apr @ 1.8% (Right Axis)
0%
1%
2%
3%
4%
5%
0%
1%
2%
3%
4%
5%
02 03 04 05 06 07 08 09 10 11 12 13 14 15
Construction Wage & Salaries
Year-over-Year Percent Change
Construction: Q1 @ 2.0%

31. 3131
Producer Price Index
Total construction costs remain low due to the drop in oil prices. However, some material
prices such as aluminum, gypsum and concrete are elevated
Source: Dodge Data & Analytics, The American Institute of Architects, U.S. Department of Commerce and Wells Fargo Securities, LLC
Construction Final DemandMaterials & Components for Construction
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
PPI: Materials & Components for Construction
Quarter-over-Quarter Percent Change, NSA
Materials & Components for Construction: Q1 @ 0.2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
10 11 12 13 14 15
Construction Final Demand
Seasonally Adjusted
Year-over-Year: May @ 1.8%
3-Month Annualized Rate: May @ 1.1%

32. 32
U.S. Construction Forecast
2008 2009 2010 2011 2012 2013 2014 2015 2016
Real GDP, percent change -0.3 -2.8 2.5 1.6 2.3 2.2 2.4 1.9 2.9
Structure Investment, percent change 6.1 -18.9 -16.4 2.3 13.1 -0.5 8.2 -1.9 10.8
Nonfarm Employment, percent change -0.6 -4.3 -0.7 1.2 1.7 1.7 1.9 2.2 1.7
Construction Employment, percent change -6.1 -16.0 -8.3 0.2 2.1 3.7 4.8 5.5 6.4
Nonresidential Employment, percent change -1.3 -13.4 -7.5 0.9 2.1 2.6 2.3 1.8 3.1
Unemployment Rate 5.8 9.3 9.6 9.0 8.1 7.4 6.2 5.4 5.0
Construction Unemployment Rate 11.0 19.7 20.1 16.5 14.4 12.5 9.7 10.6 10.8
Nonresidential Total, Value Put-in-Place, $ billions 408.6 344.5 261.9 257.0 302.1 303.8 337.9 367.2 397.1
Nonresidential Total, Value Put-in-Place, percent change 10.7 -15.7 -24.0 -1.8 17.5 0.6 11.2 8.7 8.1
Commercial, percent change 4.1 -34.1 -36.3 -2.3 14.8 12.3 17.2 10.6 11.4
Office, percent change 3.0 -32.4 -34.7 -3.0 15.4 8.7 23.6 11.4 13.2
Retail & Other Commercial, percent change -3.1 -37.8 -27.9 4.9 13.0 10.7 12.8 10.1 10.3
Hotel, percent change 28.7 -28.2 -55.9 -25.0 21.5 28.8 18.8 10.5 11.1
Industrial Total, percent change 33.2 7.9 -29.1 -3.2 18.0 1.2 16.1 7.2 10.6
Institutional Total, percent change 9.7 -8.2 -18.2 -2.5 6.4 -1.2 -2.6 3.8 5.0
Health, Value Put-in-Place, percent change 8.0 -7.9 -16.4 -2.2 8.6 -3.3 -4.8 4.9 6.2
Education, percent change 12.0 -9.7 -19.9 4.5 18.1 0.7 -1.9 3.2 5.3
Religious, percent change -4.3 -14.0 -15.1 -19.9 -9.5 -4.0 -2.9 0.0 1.0
Public Safety, percent change 28.7 5.8 -19.0 -7.1 0.5 -7.4 -3.5 1.5 3.2
Amusement & Recreation, percent change 3.5 -20.1 -23.0 4.1 -8.1 16.2 6.3 5.9 3.6
Power, Value Put-in-Place, percent change 27.1 10.1 -14.7 -0.9 37.2 -11.7 16.3 3.2 6.2
Transportation, Value Put-in-Place, percent change 10.2 -8.4 8.5 -3.5 13.9 2.1 7.2 2.5 5.4
Communication, Value Put-in-Place, percent change -3.7 -25.4 -10.3 -0.3 -9.3 7.0 -6.6 2.1 1.5
Interest Rates - Annual Averages
Ten-Year Treasury Note 3.7 3.3 3.2 2.8 1.8 2.4 2.5 2.2 2.7
Forecast as of: June 01, 2015
Nonresidential Construction Spending Outlook
Forecast
Source: U.S. Department of Commerce, U.S. Department of Labor, U.S. Department of the Treasury and Wells Fargo Securities, LLC

33. Global Outlook

34. 34
-12%
-8%
-4%
0%
4%
8%
-12%
-8%
-4%
0%
4%
8%
2002 2004 2006 2008 2010 2012 2014 2016
Eurozone Real GDP
Bars = Compound Annual Rate Line = Yr/Yr % Change
Compound Annual Growth: Q1 @ 1.6%
Year-over-Year Percent Change: Q1 @ 1.0%
Forecast
Eurozone GDP Forecast
The Eurozone has emerged from
its double-dip recession, but the
recovery will lag the U.S.
Source: IHS Global Insight and Wells Fargo Securities, LLC

35. 35
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.00
1.10
1.20
1.30
1.40
1.50
1.60
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
U.S. Dollar/Euro Exchange Rate
Dollars/Euro
U.S. Dollars/Euro: Jun-05 @ 1.11
The Euro
We expect the dollar to
strengthen against the euro on
stronger US growth and higher
interest rates
Source: IHS Global Insight and Wells Fargo Securities, LLC

36. 36
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
2000 2002 2004 2006 2008 2010 2012 2014 2016
Chinese Real GDP Forecast
Year-over-Year Percent Change
Year-over-Year Percent Change: Q1 @ 7.0%
Forecast
Chinese GDP Forecast
Growth in China is not expected
to return to the double-digit rate
seen earlier in the decade
Source: IHS Global Insight and Wells Fargo Securities, LLC

37. 37
8.3%
10.2%
16.6%
20.9%
21.8%
24.7%
0%
5%
10%
15%
20%
25%
30%
0%
5%
10%
15%
20%
25%
30%
US Japan China United
Kingdom
Canada Germany
Value-Added Embodied in FDD
Percent of Total Value-Added
2009
Value Added from Foreign Sources
The U.S. economy has low
exposure to the rest of the world
Source: Organisation for Economic Cooperation and Development and Wells Fargo Securities, LLC

38. 38
U.S. Forecast
Wells Fargo U.S. Economic Forecast
2012 2013 2014 2015 2016
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Real Gross Domestic Product 1 -2.1 4.6 5.0 2.2 -0.7 1.3 2.9 3.6 2.3 2.2 2.4 1.9 2.9
Personal Consumption 1.2 2.5 3.2 4.4 1.8 2.5 2.8 3.0 1.8 2.4 2.5 2.8 2.8
Inflation Indicators 2
PCE Deflator 1.1 1.6 1.5 1.1 0.3 0.0 0.2 0.8 1.8 1.2 1.3 0.3 1.9
Consumer Price Index 1.4 2.1 1.8 1.2 -0.1 -0.1 0.1 0.8 2.1 1.5 1.6 0.2 2.2
Industrial Production 1 3.9 5.7 4.1 4.6 -0.7 0.0 3.5 3.1 3.8 2.9 4.2 2.2 3.2
Corporate Profits Before Taxes 2 -4.8 0.1 1.4 -0.2 3.7 3.2 3.9 4.8 11.4 4.2 -0.8 3.9 5.3
Trade Weighted Dollar Index 3 76.9 75.9 81.3 85.1 92.1 90.5 91.5 92.8 73.5 75.9 78.5 91.7 95.9
Unemployment Rate 6.6 6.2 6.1 5.7 5.6 5.4 5.3 5.2 8.1 7.4 6.2 5.4 5.0
Housing Starts 4
0.93 0.98 1.03 1.06 0.97 1.14 1.21 1.24 0.78 0.92 1.00 1.13 1.22
Quarter-End Interest Rates 5
Federal Funds Target Rate 0.25 0.25 0.25 0.25 0.25 0.25 0.50 0.75 0.25 0.25 0.25 0.44 1.56
Conventional Mortgage Rate 4.34 4.16 4.16 3.86 3.77 4.05 4.15 4.23 3.66 3.98 4.17 4.05 4.51
10 Year Note 2.73 2.53 2.52 2.17 1.94 2.25 2.35 2.41 1.80 2.35 2.54 2.24 2.66
Forecast as of: June 10, 2015
1
Compound Annual Growth Rate Quarter-over-Quarter
2
Year-over-Year Percentage Change
3
Federal Reserve Major Currency Index, 1973=100 - Quarter End
4
Millions of Units
5
Annual Numbers Represent Averages
Actual
2014
ForecastActual
2015
Forecast