Contractors and developers should expect a few days to a few weeks of financial chaos with volatile credit rates and delayed access to credit from the bankruptcy over the weekend of the Lehman Brothers investment bank. Then the consequences for construction will be somewhat lower short term credit rates as the FRB adds liquidity to minimize additional bank failure but somewhat higher long term credit rates in response to the eventual inflationary impact of the added liquidity. Economic growth is likely to slow even further later this year in part due to a quicker slowdown in the commercial construction and real estate markets.

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