Regional Analysis: Ranking Cement Market Fundamentals

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1 Dave Zwicke, Regional Economist > (847) > June 30, 2016 Regional Analysis: ing Cement Market Fundamentals The U.S. economy grew 1.1% in the first quarter. Growth was revised up slightly from the previous reading of 0.8%, but the rate of expansion remains sluggish. International trade has been a drag as a strong dollar coupled with unsettled foreign markets continues to negatively impact net exports. However, initial signs do point to increased growth in the second quarter. Personal spending, a leading factor in economic growth, has accelerated in April and May. Outpaced growth was seen in discretionary durable goods and recreational goods. For 2016 in balance, PCA acknowledges weakening global demand, soft commodity prices, asymmetric global monetary policy and a strengthening dollar will remain as headwinds, reflected by PCA s forecast of 2.1% GDP growth. In terms of construction spending, moderate growth is expected for residential, nonresidential and public sectors this year with public construction projected to expand a second consecutive year following seven years of decline. Market ing The level and degree of the obstacles slowing the construction recovery vary widely by state and region. The purpose of this flash report is to provide insight into the economic tailwinds that will help shape regional construction recoveries. The rankings are based on economic fundamentals which identify regional markets most favorable for improved cement consumption. Due to the broad nature of the criteria, individual state inconsistencies will likely emerge due to project type variation, cement intensity, policy/promotion actions, and other unique drivers. Construction recoveries will continue to emerge in local markets before being reflected in national numbers. Homebuilders, for example, are unlikely to significantly accelerate construction activity until two critical conditions are met: 1) low levels in inventory of unsold new homes reflecting no higher than five months supply, and 2) stable or rising home prices. Both conditions are now increasingly being met and signaling the residential construction recovery the speed and magnitude continue to vary by region. Regions with weakest residential fundamentals will likely lead the market in rates of growth given years of under-building. PCA expects single family construction to take a more prominent role in residential construction in coming years. Cement Market Fundamentals Based on PCA Sector Composite ings Cement Market Fundamentals Based on PCA Sector Composite ings WA MT OR ID WY NV UT CO CA AZ NM AK HI Above ND MN SD WI IA NE IL KS MO OK AR MS LA TX NH ME VT NY MA RI MI CT PA NJ OH IN DE WV MD VA KY NC TN SC AL GA FL Below Lead Markets Lag Markets 1 Oregon 51 West Virginia 2 Idaho 50 New Mexico 3 Utah 49 Louisiana 4 Georgia 48 Kansas 5 Colorado 47 Connecticut 6 Florida 46 Oklahoma 7 Tennessee 45 Illinois 8 California 44 Missouri 9 Washington 43 Alaska 10 Arizona 42 Maine

2 Nonresidential construction spending is expected to temper its rate of growth to 2.8 percent in 2016 following robust growth of 21.0 percent in Project pipelines have expanded and nonresidential gains are expected to be broad-based with the speed of the healing process to be largely dictated by the strength of the labor market recovery. Finally, large state fiscal deficits of the Great Recession have receded and many states continue steady, albeit slow, fiscal healing. According to the National Association of State Budget Officers, FY2016 budgets are expected to contain budget increases in 43 states. Additionally, overall FY2016 state spending remains above prerecession highs for the fourth consecutive year. With that said, public spending levels are now only approaching past peaks in many states on an inflation adjusted basis. The magnitude of past public spending cuts, combined with apprehensive budget officials has kept a lid on public construction spending despite rising tax revenues. Given the steady healing, PCA believes public construction spending will continue to grow in 2016 and start to reflect the improving state fiscal climate and financial clarity resulting from the issuance of the latest multiyear highway bill. Job growth will play a critical role in shaping regional construction recoveries. Labor markets impact foreclosure rates and home prices, nonresidential vacancy rates, and state fiscal conditions. Using this high frequency indicator, among other metrics, PCA will be updating the following state rankings of construction fundamentals on a monthly basis. ings methodologies have been revised (November 2015) and the table following immediately represents rates of change rather than past peaks. The goal of the change is to better identify medium-term trends and market turning points. The second set of tables contains the original methodology. Current Assessment States ranked in the top tier represent 55% of U.S. cement consumption. The middle tier represents 23%, and the lagged tier represents 22% of the U.S. cement market. The top five regions with the strongest improving housing fundamentals: Nevada, Oregon, Tennessee, Massachusetts and Florida. Home price figures reported year-over-year growth of 5.4% nationally in the first quarter following an average 5.5% growth in The strongest growth in home prices was in the West, particularly the Northwest. As prices rise further, an increasing number of once underwater homes will enter the market and help control price appreciation; thus helping to preserve affordability. All states experienced yearover-year home price growth for a sixth consecutive quarter. Presently, 26 states have home prices that exceed prerecession peaks. First quarter delinquency rates have shown fifteen consecutive quarters of improvement in pending foreclosures. Nationally, the volume of mortgages 90+ days past due edged down to 1.57% from previous quarter s rate of 1.61% and improved from year ago levels (2.0%). For context, the long-term average delinquency rate is 0.78%. A reduction in distressed properties is a necessary ingredient for an expanded home construction recovery. The top five regions with strongest job growth that is expected to support commercial construction expansion: Idaho, Oregon, Utah, Arizona and Washington. The breadth of employment gains contracted in April as 30 states experienced growth compared to 40 in the prior month. California (70,000), Florida (34,900), and Massachusetts (15,200) were the largest net job creators. Ohio (-13,800), Pennsylvania (-13,400) and Virginia (-10,600) saw the largest declines. On a percentage basis, oil patch states remain the weakest while the Southeast and Northwest continue to demonstrate strength. Thirty-nine states currently have employment levels exceeding that prior to the recession. Nationally, employment levels moved beyond prerecession highs in March of These regions have moved beyond recovery and are now considered expanding in terms of employment. State deficit figures have been replaced with a new Fiscal Health metric. The metric is a ranking of state finances based on: tax revenues, capital expenditures, government employment levels, and unfunded pension liabilities. It is believed this broader based measure is a more accurate gauge of state governments ability to fund capital improvements. Overall, Oregon, Idaho, Utah, Georgia and Florida are demonstrating the strongest rates of improvement in their construction fundamentals.

3 Mortgage Delinquency Rate Residential Construction Fundamentals Unemployment Rate (% Share of Loans 90+ Days Past Due) (As of Apr '16) (1Q16 % CH from trailing 12mo trend) Current Current Leads National 1 Massachusetts Tennessee Nevada Nevada 0 2 Rhode Island Oregon Colorado Oregon 0 3 Nevada Arkansas Oregon Tennessee 0 4 Florida Maine Florida Massachusetts 1 5 Mississippi Nevada Washington Florida -1 6 Maryland New Jersey California Colorado 0 7 Delaware New Hampshire Texas California 1 8 Georgia Colorado D.C Michigan -1 9 Alabama California Arizona Georgia 0 10 Washington Delaware Georgia Rhode Island 0 11 Tennessee South Dakota Idaho Arkansas 3 12 Connecticut Massachusetts Michigan New Hampshire 3 13 Arkansas Arizona Hawaii Arizona 0 14 Illinois Maryland Utah Maine 2 15 Kentucky Missouri North Dakota Delaware 3 16 North Carolina Vermont South Carolina New Jersey Indiana Michigan Tennessee Washington 2 18 New Jersey New Mexico Massachusetts Maryland Pennsylvania Hawaii Minnesota Missouri Michigan Mississippi Montana Mississippi 8 21 New York Florida South Dakota North Carolina Oregon Idaho North Carolina Texas 0 23 Ohio Rhode Island Nebraska Hawaii Maine Virginia Missouri Idaho Missouri North Carolina Wyoming South Dakota Kansas Kansas Louisiana Kansas 3 27 New Hampshire New York Ohio Utah 0 28 Louisiana Texas New Hampshire South Carolina South Carolina Wisconsin Rhode Island New York Utah Georgia Alaska Kentucky Texas West Virginia Kansas Alabama 2 32 Wisconsin D.C Indiana D.C California Nebraska Illinois Wisconsin 4 34 Virginia Alabama Kentucky New Mexico 7 Lags National 35 New Mexico Alaska Oklahoma Virginia Minnesota Kentucky Maine Minnesota 0 37 Colorado Utah Wisconsin Louisiana Oklahoma South Carolina Mississippi Nebraska 5 39 Arizona Washington New York Vermont 3 40 Iowa Montana Iowa Illinois Vermont Minnesota New Jersey Ohio West Virginia Pennsylvania Virginia Indiana Idaho Louisiana Maryland Pennsylvania Hawaii Oklahoma Pennsylvania Montana 1 45 Nebraska Connecticut Alabama Connecticut 2 46 Montana Iowa Delaware Alaska 3 47 Alaska North Dakota Arkansas North Dakota 1 48 South Dakota Ohio West Virginia West Virginia Wyoming Indiana New Mexico Oklahoma D.C Illinois Vermont Iowa 0 51 North Dakota Wyoming Connecticut Wyoming 0 : Positive rank change implies improved market conditions whereas a loss of rank reflects a relative deterioration. Source: Mortgage Bankers Association, U.S. Bureau of Labor Statistics, National Association of Realtors Home Price Growth Composite ing

4 Nonresidential Construction Fundamentals Manufacturing Office Retail Hospitality Total Employment Current Emp as % of Trailing 12mo Current Emp as % of Trailing 12mo Current Emp as % of Trailing 12mo Current Emp as % of Trailing 12mo Current Emp as % of Trailing 12mo Leads National Trends 1 D.C. 113% 1 Arizona 106% 1 D.C. 109% 1 Idaho 109% 1 Idaho 104% 0 2 Idaho 105% 2 Oregon 106% 2 Kentucky 105% 2 Delaware 109% 2 Oregon 104% 0 3 Tennessee 104% 3 Washington 105% 3 Washington 105% 3 Colorado 108% 3 Utah 104% 1 4 Maryland 104% 4 Georgia 104% 4 Georgia 105% 4 Utah 107% 4 Arizona 104% 1 5 Montana 103% 5 South Carolina 104% 5 Arkansas 104% 5 Oklahoma 106% 5 Washington 103% 2 6 Delaware 103% 6 Tennessee 104% 6 South Dakota 104% 6 Texas 106% 6 Tennessee 103% -3 7 Florida 103% 7 Florida 104% 7 Indiana 104% 7 Arkansas 106% 7 Florida 103% -1 8 Georgia 103% 8 Idaho 104% 8 Nevada 104% 8 Washington 105% 8 Georgia 103% 0 9 Michigan 103% 9 Virginia 104% 9 Tennessee 104% 9 Maryland 105% 9 Delaware 103% 0 10 Colorado 103% 10 North Carolina 104% 10 Utah 104% 10 Georgia 105% 10 Colorado 103% 1 11 Mississippi 103% 11 Delaware 104% 11 Virginia 104% 11 Virginia 105% 11 California 103% Utah 102% 12 Michigan 104% 12 North Carolina 104% 12 Nebraska 105% 12 Virginia 103% 0 13 Nevada 102% 13 Rhode Island 104% 13 Mississippi 103% 13 California 105% 13 Nevada 103% 0 14 Kentucky 102% 14 Arkansas 103% 14 Oregon 103% 14 D.C. 105% 14 South Carolina 103% 0 15 Rhode Island 102% 15 Nevada 103% 15 Texas 103% 15 Michigan 105% 15 Michigan 103% 3 16 Maine 102% 16 New Hampshire 103% 16 South Carolina 103% 16 Florida 104% 16 Hawaii 103% Arizona 102% 17 Utah 103% 17 Colorado 103% 17 Oregon 104% 17 Arkansas 102% South Carolina 102% 18 California 103% 18 Arizona 103% 18 Illinois 104% 18 North Carolina 102% Oregon 101% 19 Kentucky 103% 19 Idaho 102% 19 North Carolina 104% 19 Maryland 102% 0 20 Wisconsin 101% 20 Missouri 102% 20 California 102% 20 New Mexico 104% 20 Kentucky 102% 1 21 Alabama 101% 21 Alabama 102% 21 Florida 102% 21 Ohio 104% 21 New Jersey 102% Alaska 101% 22 Colorado 102% 22 New Jersey 102% 22 Rhode Island 104% 22 Massachusetts 102% 1 23 Ohio 101% 23 Vermont 102% 23 New Hampshire 102% 23 Hawaii 104% 23 Vermont 102% 8 24 Connecticut 100% 24 Massachusetts 102% 24 Alabama 102% 24 Mississippi 104% 24 New Hampshire 102% 0 25 Hawaii 100% 25 Nebraska 102% 25 Louisiana 102% 25 Pennsylvania 104% 25 Wisconsin 102% 1 26 New Jersey 100% 26 South Dakota 102% 26 Illinois 102% 26 Maine 103% 26 Texas 102% Indiana 100% 27 Texas 102% 27 Oklahoma 102% 27 Indiana 103% 27 Indiana 102% 2 28 Minnesota 100% 28 New Jersey 102% 28 Wisconsin 102% 28 Arizona 103% 28 Ohio 102% 0 29 Nebraska 100% 29 Maryland 102% 29 Minnesota 102% 29 New Jersey 103% 29 Nebraska 102% New York 100% 30 Pennsylvania 102% 30 Ohio 102% 30 Connecticut 103% 30 Mississippi 102% Massachusetts 100% 31 New York 101% 31 Wyoming 101% 31 Tennessee 103% 31 D.C. 102% 3 32 North Carolina 100% 32 Connecticut 101% 32 Montana 101% 32 South Dakota 103% 32 Rhode Island 101% 0 33 California 99% 33 Hawaii 101% 33 West Virginia 101% 33 Iowa 103% 33 Iowa 101% 2 34 Kansas 99% 34 D.C. 101% 34 Nebraska 101% 34 Kansas 103% 34 New York 101% -1 Lags National Trends 35 Missouri 99% 35 Wisconsin 101% 35 Delaware 101% 35 Alabama 102% 35 South Dakota 101% 1 36 Arkansas 99% 36 Ohio 101% 36 Maryland 101% 36 Minnesota 102% 36 Minnesota 101% 1 37 Pennsylvania 99% 37 Alaska 101% 37 Michigan 101% 37 New York 102% 37 Alabama 101% 1 38 Virginia 99% 38 Minnesota 100% 38 Pennsylvania 101% 38 Kentucky 102% 38 Pennsylvania 101% 2 39 West Virginia 99% 39 Maine 100% 39 Kansas 101% 39 New Hampshire 102% 39 Illinois 101% 0 40 Washington 99% 40 Illinois 100% 40 Vermont 101% 40 South Carolina 102% 40 Connecticut 101% 1 41 Illinois 99% 41 Montana 100% 41 Iowa 101% 41 Vermont 101% 41 Montana 101% 2 42 New Hampshire 98% 42 Iowa 100% 42 Alaska 101% 42 Wisconsin 101% 42 Missouri 101% 2 43 Iowa 98% 43 New Mexico 100% 43 Massachusetts 100% 43 Massachusetts 101% 43 Maine 101% Vermont 98% 44 Kansas 100% 44 Missouri 100% 44 West Virginia 101% 44 Alaska 101% Wyoming 97% 45 Oklahoma 99% 45 Maine 100% 45 Alaska 101% 45 New Mexico 100% 0 46 New Mexico 97% 46 Mississippi 99% 46 Rhode Island 100% 46 Nevada 100% 46 Kansas 100% 0 47 South Dakota 96% 47 West Virginia 99% 47 Connecticut 100% 47 Missouri 100% 47 Oklahoma 100% 0 48 Texas 95% 48 Indiana 99% 48 Hawaii 100% 48 North Dakota 100% 48 Louisiana 99% 0 49 Louisiana 95% 49 North Dakota 99% 49 New York 100% 49 Louisiana 100% 49 West Virginia 99% 0 50 North Dakota 94% 50 Wyoming 98% 50 New Mexico 99% 50 Montana 99% 50 Wyoming 97% 0 51 Oklahoma 92% 51 Louisiana 97% 51 North Dakota 98% 51 Wyoming 96% 51 North Dakota 95% 0 : Positive rank change implies improved market conditions whereas a loss of rank reflects a relative deterioration. Source: U.S. Bureau of Labor Statistics Data: April 2016

5 Fiscal Health Transportation Capital Expenditures Public Construction Fundamentals Employment Long-Term Public Debt (Rev/Exp/Emp/UPL) 2015, % of Trailing 2 Year AVG Current Month as % of Trailing 12mo Share of State GDP (2015) Composite Leads National Trends 1 Texas 1 Ohio 108% 1 Idaho 104% 1 Wyoming 5.1% 1 Georgia 0 2 Oregon 2 Texas 106% 2 Oregon 104% 2 North Dakota 8.4% 2 Arkansas 0 3 Arkansas 3 Wyoming 105% 3 Utah 104% 3 North Carolina 9.6% 3 Utah 0 4 Nebraska 4 New Jersey 104% 4 Arizona 104% 4 Oklahoma 10.0% 4 Idaho 0 5 California 5 Georgia 104% 5 Washington 103% 5 Idaho 10.1% 5 Delaware 3 6 Pennsylvania 6 Kentucky 104% 6 Tennessee 103% 6 D.C. 10.7% 6 Oregon -1 7 New York 7 Michigan 104% 7 Florida 103% 7 Delaware 10.7% 7 Tennessee 0 8 Massachusetts 8 Massachusetts 104% 8 Georgia 103% 8 Montana 10.8% 8 Nebraska -2 9 Georgia 9 Rhode Island 103% 9 Delaware 103% 9 Iowa 11.2% 9 North Carolina 1 10 Colorado 10 Minnesota 103% 10 Colorado 103% 10 Georgia 11.4% 10 Colorado 1 11 Iowa 11 Arkansas 103% 11 California 103% 11 Arkansas 11.4% 11 Texas Delaware 12 Maryland 102% 12 Virginia 103% 12 Utah 11.7% 12 Maryland 0 13 Wisconsin 13 North Dakota 102% 13 Nevada 103% 13 Tennessee 12.1% 13 California 0 14 Utah 14 Alabama 102% 14 South Carolina 103% 14 Mississippi 12.6% 14 Virginia 0 15 North Dakota 15 Florida 102% 15 Michigan 103% 15 South Dakota 13.1% 15 D.C South Dakota 16 Nebraska 102% 16 Hawaii 103% 16 Nebraska 13.2% 16 Florida Washington 17 Virginia 102% 17 Arkansas 102% 17 Maryland 13.4% 17 Arizona 1 18 Ohio 18 Colorado 102% 18 North Carolina 102% 18 Minnesota 13.8% 18 Ohio Tennessee 19 Arizona 101% 19 Maryland 102% 19 Ohio 14.3% 19 Washington 0 20 Minnesota 20 Kansas 101% 20 Kentucky 102% 20 Virginia 14.7% 20 Michigan 0 21 Vermont 21 New York 101% 21 New Jersey 102% 21 Louisiana 14.9% 21 Wisconsin 1 22 North Carolina 22 Wisconsin 101% 22 Massachusetts 102% 22 West Virginia 15.0% 22 Iowa Idaho 23 Utah 101% 23 Vermont 102% 23 Vermont 15.2% 23 Massachusetts 0 24 Maryland 24 Pennsylvania 100% 24 New Hampshire 102% 24 Maine 15.2% 24 South Dakota 0 25 Wyoming 25 California 100% 25 Wisconsin 102% 25 Florida 15.5% 25 Minnesota 1 26 Florida 26 South Dakota 100% 26 Texas 102% 26 Wisconsin 15.5% 26 North Dakota Virginia 27 Hawaii 100% 27 Indiana 102% 27 New Hampshire 15.7% 27 Vermont 3 28 D.C. 28 New Mexico 100% 28 Ohio 102% 28 Indiana 15.8% 28 Wyoming Arizona 29 District of Columb 99% 29 Nebraska 102% 29 Alabama 15.8% 29 New Jersey Nevada 30 Washington 100% 30 Mississippi 102% 30 Arizona 16.3% 30 Hawaii Michigan 31 North Carolina 99% 31 D.C. 102% 31 Missouri 16.3% 31 Pennsylvania 1 32 New Mexico 32 Iowa 99% 32 Rhode Island 101% 32 California 16.3% 32 New York Montana 33 New Hampshire 99% 33 Iowa 101% 33 Texas 16.4% 33 Alabama 1 34 Hawaii 34 Connecticut 99% 34 New York 101% 34 Colorado 16.8% 34 Nevada -1 Lags National Trends 35 Alabama 35 Illinois 99% 35 South Dakota 101% 35 Oregon 16.9% 35 New Hampshire 1 36 Connecticut 36 Delaware 98% 36 Minnesota 101% 36 New Jersey 17.1% 36 Kentucky 1 37 Rhode Island 37 West Virginia 98% 37 Alabama 101% 37 Michigan 17.3% 37 Mississippi Indiana 38 Oregon 98% 38 Pennsylvania 101% 38 Alaska 17.5% 38 South Carolina 0 39 Maine 39 Idaho 97% 39 Illinois 101% 39 New Mexico 17.6% 39 Montana 1 40 New Jersey 40 Mississippi 97% 40 Connecticut 101% 40 Connecticut 17.6% 40 Indiana West Virginia 41 Tennessee 97% 41 Montana 101% 41 Kansas 18.8% 41 Rhode Island 0 42 South Carolina 42 Montana 96% 42 Missouri 101% 42 Pennsylvania 18.9% 42 Connecticut 2 43 Kansas 43 South Carolina 96% 43 Maine 101% 43 Washington 19.1% 43 Oklahoma 0 44 Illinois 44 Maine 96% 44 Alaska 101% 44 Hawaii 19.3% 44 New Mexico 1 45 Kentucky 45 Alaska 95% 45 New Mexico 100% 45 Illinois 20.7% 45 West Virginia 1 46 Mississippi 46 Oklahoma 95% 46 Kansas 100% 46 South Carolina 20.8% 46 Maine 1 47 Missouri 47 Vermont 94% 47 Oklahoma 100% 47 Massachusetts 20.9% 47 Illinois 1 48 Oklahoma 48 Missouri 94% 48 Louisiana 99% 48 Nevada 21.2% 48 Kansas 1 49 New Hampshire 49 Louisiana 92% 49 West Virginia 99% 49 Kentucky 21.8% 49 Missouri 1 50 Alaska 50 Indiana 92% 50 Wyoming 97% 50 Rhode Island 22.2% 50 Alaska Louisiana 51 Nevada 84% 51 North Dakota 95% 51 New York 25.1% 51 Louisiana 0 : Positive rank change implies improved market conditions whereas a loss of rank reflects a relative deterioration. Source: Nelson A Rockefeller Institute of Government, U.S. Census Bureau (BOC): Annual Survey of State Government Finances & Census of Governments, NASBO, BLS, BEA, Recovery.Gov, Morningstar

6 Regional Analysis: Peak-to-Trough Method The following set of tables is based on the traditional method of rankings. This method analyzes current levels in respects to past troughs. The goal of this method is to assess where a market currently stands in its cycle. States near the top of the ranking are more inclined to see slower growth, even negative growth given their cyclical maturity. Conversely, states ranked near the bottom, while having poorer fundamentals relative to their peers, are more likely candidates for high rates of growth as they are closer to the recovery and expansion phases of their cycle. The purpose of including both methods is in the understanding that there are multiple ways to examine a market. Some user may be more interested in evaluating near-term trends and are more inclined to identify market turning points, for that type of analysis the rate-of-change (prior) method is recommended. Other users may be more interested on where the market currently stands in relation to its past trough, for this perspective the method below is ideal. Cement Market Fundamentals Based on PCA Sector Composite ings Cement Market Fundamentals Based on PCA Sector Composite ings (Peak-to-Trough) WA MT OR ID WY NV UT CO CA AZ NM AK HI Above ND MN SD WI IA NE IL KS MO OK AR MS LA TX NH ME VT NY MA RI MI CT PA NJ OH IN DE WV MD VA KY NC TN SC AL GA FL Below Mature Markets Recovery Markets 1 North Dakota 51 Connecticut 2 South Dakota 50 Rhode Island 3 Texas 49 New Mexico 4 D.C. 48 Nevada 5 Nebraska 47 New Jersey 6 Iowa 46 Arizona 7 Colorado 45 West Virginia 8 Montana 44 Illinois 9 Utah 43 Florida 10 Alaska 42 Wyoming

7 Mortgage Delinquency Rate Residential Construction Fundamentals Unemployment Rate (%) Loans 90+ Days Past Due (3MMA, %), Apr 2016 (%), as of 1Q16 Leads National 1 North Dakota South Dakota North Dakota North Dakota 1 2 Alaska New Hampshire Texas South Dakota 1 3 Colorado Nebraska Colorado Colorado -2 4 Montana Colorado South Dakota Hawaii 0 5 South Dakota Hawaii Wyoming Montana 1 6 Minnesota North Dakota Iowa Iowa -1 7 Idaho Vermont Hawaii Nebraska 0 8 Wyoming Maine Montana Vermont 0 9 Arizona Idaho Indiana Utah 0 10 Oregon Utah Alaska Kansas 1 11 California Kansas Oklahoma Texas Iowa Minnesota Nebraska Idaho 2 13 Washington Arkansas Louisiana Minnesota 0 14 Utah Iowa South Carolina Oregon 1 15 Hawaii Virginia Vermont New Hampshire 1 16 D.C Delaware Kansas Wyoming Vermont Massachusetts Kentucky Oklahoma 0 18 New Hampshire Montana Utah Virginia 0 19 Kansas Missouri Oregon Arkansas 2 20 Virginia Tennessee Tennessee Missouri Nebraska Texas Washington Alaska Wisconsin Wisconsin North Carolina Wisconsin 1 23 New Mexico Oklahoma D.C Indiana Michigan Oregon Arkansas Massachusetts 1 25 Texas Maryland Missouri Maine North Carolina New Jersey Massachusetts Tennessee 2 27 South Carolina Florida Alabama California 0 28 Missouri Michigan Ohio Kentucky 2 29 Kentucky New York Pennsylvania Washington Oklahoma Indiana Wisconsin North Carolina 1 31 West Virginia Ohio Maine South Carolina Connecticut California Georgia Delaware 2 33 Illinois Pennsylvania Mississippi D.C Indiana Kentucky California Arizona -2 Lags National Current Home Price Relative to Past Peak 35 Ohio North Carolina Virginia Ohio 0 36 Massachusetts Rhode Island Minnesota Michigan 0 37 Arkansas Arizona Idaho Pennsylvania 0 38 Florida Georgia Delaware Maryland 1 39 Nevada Wyoming West Virginia Florida 5 40 Delaware Connecticut New Mexico Louisiana Tennessee Nevada Maryland New Mexico 0 42 Pennsylvania South Carolina New Hampshire Georgia 1 43 Georgia Washington New York New York New York Mississippi New Jersey New Jersey Maryland Alabama Rhode Island Connecticut 0 46 Maine New Mexico Arizona West Virginia 1 47 Louisiana Louisiana Connecticut Alabama Rhode Island D.C Florida Rhode Island 0 49 Alabama West Virginia Michigan Mississippi 1 50 New Jersey Alaska Nevada Nevada Mississippi Illinois Illinois Illinois 0 : Positive rank change implies improved market conditions whereas a loss of rank reflects a relative deterioration. Source: Mortgage Bankers Association, U.S. Bureau of Labor Statistics, National Association of Realtors Composite ing

8 Nonresidential Construction Fundamentals Manufacturing Office Retail Hospitality Total Employment Share of Jobs Recovered Share of Jobs Recovered Share of Jobs Recovered Share of Jobs Recovered Share of Jobs Recovered Leads National Trends 1 Alaska 129% 1 North Dakota 406% 1 North Dakota 783% 1 Texas 870% 1 North Dakota 741% 0 2 Colorado 90% 2 Texas 315% 2 D.C. 487% 2 New York 824% 2 Texas 408% 0 3 Michigan 88% 3 North Carolina 271% 3 South Dakota 456% 3 Delaware 704% 3 D.C. 364% 0 4 Utah 80% 4 Arkansas 253% 4 Texas 353% 4 Louisiana 635% 4 Alaska 317% 0 5 Washington 79% 5 Utah 252% 5 Alaska 314% 5 Massachusetts 566% 5 South Dakota 262% 0 6 Idaho 77% 6 Vermont 250% 6 Oklahoma 271% 6 Arkansas 520% 6 Utah 259% 1 7 South Dakota 77% 7 Tennessee 248% 7 Washington 234% 7 Oklahoma 512% 7 New York 259% -1 8 Montana 74% 8 Nebraska 217% 8 Arkansas 221% 8 North Dakota 463% 8 Colorado 248% 0 9 South Carolina 72% 9 Washington 213% 9 New York 190% 9 D.C. 456% 9 Massachusetts 247% 0 10 Indiana 71% 10 Virginia 211% 10 Utah 190% 10 Utah 455% 10 Nebraska 232% 0 11 Kentucky 70% 11 Kentucky 208% 11 Louisiana 169% 11 Pennsylvania 422% 11 Washington 218% 0 12 Wisconsin 61% 12 Georgia 204% 12 North Carolina 164% 12 California 394% 12 Montana 178% 1 13 Oregon 56% 13 New Hampshire 202% 13 Florida 158% 13 Colorado 389% 13 Iowa 176% Nebraska 55% 14 Colorado 201% 14 Nevada 155% 14 Kansas 383% 14 Virginia 165% 1 15 Hawaii 53% 15 South Carolina 196% 15 Colorado 151% 15 South Dakota 381% 15 Tennessee 165% Minnesota 52% 16 Massachusetts 180% 16 Nebraska 138% 16 North Carolina 368% 16 California 164% 1 17 Wyoming 52% 17 Missouri 170% 17 Oregon 127% 17 Nebraska 348% 17 Minnesota 164% 1 18 North Dakota 48% 18 Iowa 169% 18 Georgia 126% 18 Florida 332% 18 Oklahoma 160% Tennessee 48% 19 Kansas 165% 19 Kentucky 123% 19 Virginia 331% 19 Idaho 159% 0 20 Georgia 45% 20 West Virginia 165% 20 South Carolina 119% 20 Maryland 322% 20 Oregon 158% 0 21 Ohio 44% 21 New York 161% 21 Indiana 114% 21 Illinois 322% 21 Maryland 155% 0 22 Iowa 44% 22 Oregon 157% 22 Massachusetts 111% 22 Georgia 321% 22 Georgia 154% 0 23 Alabama 39% 23 Minnesota 154% 23 Iowa 110% 23 Connecticut 295% 23 South Carolina 150% 1 24 Florida 39% 24 Maine 152% 24 Idaho 108% 24 Kentucky 289% 24 Louisiana 148% Nevada 38% 25 Pennsylvania 152% 25 Tennessee 107% 25 Tennessee 286% 25 Vermont 147% 0 26 Texas 31% 26 Wisconsin 148% 26 New Jersey 104% 26 Maine 260% 26 Hawaii 147% 0 27 Arizona 30% 27 Michigan 144% 27 Virginia 100% 27 Alabama 256% 27 Delaware 146% 0 28 D.C. 29% 28 California 143% 28 Kansas 96% 28 Oregon 251% 28 New Hampshire 141% 2 29 Delaware 29% 29 Indiana 140% 29 California 96% 29 Washington 248% 29 North Carolina 139% Oklahoma 25% 30 D.C. 132% 30 Hawaii 95% 30 New Mexico 247% 30 Kentucky 137% Mississippi 25% 31 Maryland 132% 31 Mississippi 94% 31 Indiana 239% 31 Indiana 129% 0 32 North Carolina 24% 32 Rhode Island 130% 32 Montana 93% 32 Ohio 238% 32 Arkansas 127% 0 33 Missouri 24% 33 Hawaii 129% 33 Arizona 83% 33 Rhode Island 238% 33 Pennsylvania 124% 0 34 Rhode Island 20% 34 Arizona 127% 34 Delaware 83% 34 New Hampshire 237% 34 Wisconsin 123% 1 Lags National Trends 35 California 19% 35 Ohio 126% 35 New Hampshire 80% 35 South Carolina 231% 35 Florida 123% Illinois 18% 36 Mississippi 126% 36 Minnesota 78% 36 Vermont 230% 36 Ohio 109% 0 37 Kansas 12% 37 Florida 115% 37 Maryland 74% 37 Idaho 220% 37 Michigan 106% 0 38 Louisiana 12% 38 South Dakota 112% 38 Illinois 73% 38 New Jersey 211% 38 Illinois 103% 2 39 Maine 10% 39 Idaho 106% 39 Wisconsin 71% 39 Arizona 210% 39 Arizona 102% New Hampshire 8% 40 Illinois 106% 40 Missouri 63% 40 Minnesota 190% 40 Kansas 99% Pennsylvania 8% 41 Montana 103% 41 Alabama 60% 41 Alaska 184% 41 Missouri 97% 0 42 Virginia 3% 42 Delaware 100% 42 Pennsylvania 60% 42 Wisconsin 177% 42 Nevada 91% 0 43 Vermont 1% 43 Nevada 100% 43 Wyoming 56% 43 Missouri 176% 43 New Jersey 90% 0 44 Arkansas 0% 44 Alabama 99% 44 Ohio 53% 44 Michigan 161% 44 Rhode Island 84% 0 45 Connecticut 0% 45 Alaska 98% 45 Michigan 52% 45 Hawaii 161% 45 Mississippi 79% 1 46 Massachusetts 0% 46 Louisiana 87% 46 Connecticut 50% 46 West Virginia 158% 46 Connecticut 78% 1 47 Maryland 0% 47 New Jersey 82% 47 New Mexico 40% 47 Mississippi 152% 47 Maine 75% New Jersey 0% 48 Connecticut 72% 48 Rhode Island 33% 48 Montana 151% 48 Alabama 65% 0 49 New Mexico 0% 49 Oklahoma 50% 49 West Virginia 30% 49 Iowa 143% 49 New Mexico 58% 0 50 New York 0% 50 Wyoming 37% 50 Vermont 27% 50 Wyoming 102% 50 West Virginia 53% 0 51 West Virginia 0% 51 New Mexico 11% 51 Maine 21% 51 Nevada 98% 51 Wyoming 23% 0 : Positive rank change implies improved market conditions whereas a loss of rank reflects a relative deterioration. Source: U.S. Bureau of Labor Statistics Data: March 2016

9 Fiscal Health Transportation Capital Expenditures Public Construction Fundamentals Employment Long-Term Public Debt (Rev/Exp/Emp/UPL) 2014, % Share of Past Peak % of Jobs Recovered, Mar 2016 Share of State GDP (2014) Composite Leads National Trends 1 South Dakota 1 Minnesota 116% 1 North Dakota 741% 1 Wyoming 5.1% 1 North Dakota 0 2 California 2 Colorado 112% 2 Texas 408% 2 North Dakota 8.4% 2 South Dakota 0 3 Oregon 3 Arkansas 108% 3 D.C. 364% 3 North Carolina 9.6% 3 D.C. 0 4 Iowa 4 Massachusetts 106% 4 Alaska 317% 4 Oklahoma 10.0% 4 Nebraska 0 5 Nebraska 5 Virginia 105% 5 South Dakota 262% 5 Idaho 10.1% 5 Iowa 0 6 Texas 6 California 102% 6 Utah 259% 6 District Of Columb 10.7% 6 Idaho 1 7 Arkansas 7 North Dakota 102% 7 New York 259% 7 Delaware 10.7% 7 Montana 2 8 Vermont 8 D.C. 100% 8 Colorado 248% 8 Montana 10.8% 8 Minnesota 0 9 Delaware 9 South Dakota 99% 9 Massachusetts 247% 9 Iowa 11.2% 9 Texas Idaho 10 Kentucky 97% 10 Nebraska 232% 10 Georgia 11.4% 10 California 4 11 North Dakota 11 New York 97% 11 Washington 218% 11 Arkansas 11.4% 11 Utah 1 12 Minnesota 12 North Carolina 97% 12 Montana 178% 12 Utah 11.7% 12 Colorado Pennsylvania 13 Nebraska 97% 13 Iowa 176% 13 Tennessee 12.1% 13 Virginia 0 14 Massachusetts 14 Hawaii 96% 14 Virginia 165% 14 Mississippi 12.6% 14 Arkansas New York 15 Maryland 95% 15 Tennessee 165% 15 South Dakota 13.1% 15 Massachusetts 1 16 Ohio 16 Wisconsin 94% 16 California 164% 16 Nebraska 13.2% 16 Maryland Montana 17 Illinois 94% 17 Minnesota 164% 17 Maryland 13.4% 17 Delaware 3 18 Colorado 18 Idaho 93% 18 Oklahoma 160% 18 Minnesota 13.8% 18 North Carolina Maryland 19 Rhode Island 93% 19 Idaho 159% 19 Ohio 14.3% 19 New York Washington 20 New Jersey 91% 20 Oregon 158% 20 Virginia 14.7% 20 Tennessee 1 21 D.C. 21 West Virginia 91% 21 Maryland 155% 21 Louisiana 14.9% 21 Oregon Utah 22 Michigan 90% 22 Georgia 154% 22 West Virginia 15.0% 22 Vermont 1 23 North Carolina 23 Montana 89% 23 South Carolina 150% 23 Vermont 15.2% 23 Oklahoma Virginia 24 Florida 89% 24 Louisiana 148% 24 Maine 15.2% 24 Washington 0 25 Tennessee 25 Washington 88% 25 Vermont 147% 25 Florida 15.5% 25 Georgia 1 26 Indiana 26 Pennsylvania 88% 26 Hawaii 147% 26 Wisconsin 15.5% 26 Alaska Florida 27 Connecticut 87% 27 Delaware 146% 27 New Hampshire 15.7% 27 Ohio 0 28 Nevada 28 Maine 86% 28 New Hampshire 141% 28 Indiana 15.8% 28 Wisconsin 0 29 Mississippi 29 Oregon 86% 29 North Carolina 139% 29 Alabama 15.8% 29 Florida 4 30 Wisconsin 30 Vermont 85% 30 Kentucky 137% 30 Arizona 16.3% 30 Pennsylvania Illinois 31 Texas 85% 31 Indiana 129% 31 Missouri 16.3% 31 Indiana 0 32 Alabama 32 Alabama 84% 32 Arkansas 127% 32 California 16.3% 32 Hawaii Hawaii 33 New Hampshire 81% 33 Pennsylvania 124% 33 Texas 16.4% 33 New Hampshire Maine 34 Alaska 81% 34 Wisconsin 123% 34 Colorado 16.8% 34 Louisiana 1 Lags National Trends 35 Michigan 35 Kansas 81% 35 Florida 123% 35 Oregon 16.9% 35 Mississippi 1 36 West Virginia 36 Oklahoma 75% 36 Ohio 109% 36 New Jersey 17.1% 36 Michigan Georgia 37 Delaware 73% 37 Michigan 106% 37 Michigan 17.3% 37 Illinois 3 38 Oklahoma 38 Missouri 72% 38 Illinois 103% 38 Alaska 17.5% 38 Wyoming 1 39 New Mexico 39 Iowa 72% 39 Arizona 102% 39 New Mexico 17.6% 39 Maine 3 40 New Hampshire 40 Mississippi 67% 40 Kansas 99% 40 Connecticut 17.6% 40 West Virginia Missouri 41 Utah 66% 41 Missouri 97% 41 Kansas 18.8% 41 Kentucky 0 42 Wyoming 42 Indiana 65% 42 Nevada 91% 42 Pennsylvania 18.9% 42 South Carolina 1 43 Rhode Island 43 Tennessee 65% 43 New Jersey 90% 43 Washington 19.1% 43 Alabama Connecticut 44 Wyoming 63% 44 Rhode Island 84% 44 Hawaii 19.3% 44 Missouri 0 45 Kansas 45 Ohio 63% 45 Mississippi 79% 45 Illinois 20.7% 45 Arizona 2 46 Arizona 46 New Mexico 59% 46 Connecticut 78% 46 South Carolina 20.8% 46 New Jersey 0 47 South Carolina 47 Arizona 57% 47 Maine 75% 47 Massachusetts 20.9% 47 Kansas 1 48 Alaska 48 Louisiana 56% 48 Alabama 65% 48 Nevada 21.2% 48 Nevada 1 49 New Jersey 49 Georgia 50% 49 New Mexico 58% 49 Kentucky 21.8% 49 Connecticut Kentucky 50 South Carolina 49% 50 West Virginia 53% 50 Rhode Island 22.2% 50 Rhode Island 0 51 Louisiana 51 Nevada 36% 51 Wyoming 23% 51 New York 25.1% 51 New Mexico 0 : Positive rank change implies improved market conditions whereas a loss of rank reflects a relative deterioration. Source: Nelson A Rockefeller Institute of Government, U.S. Census Bureau (BOC): Annual Survey of State Government Finances & Census of Governments, NASBO, BLS, BEA, Recovery.Gov, Morningstar