Jobsite spending is now declining, the decline in project starts has accelerated, and construction worker layoffs have been over 80,000 for the last two months.

Both the AIA member survey and the Reed Construction Data project database show a recent steep drop in project work at the planning phase. The flip side of this sour environment is that construction materials prices dropped 6% in the last two months with more decline ahead and nominal interest rates have fallen 100 basis points (short term) and 200 basis points (long term).

Declining project and borrowing costs will cushion the decline in the nonresidential construction market but are not enough to stop it in the next few months.

Key Indicators of the U.S. Market Environment — Dec 2008
Commercial and Industrial Construction (Driven mainly by cyclical factors)

	Year Ago	Previous Month or Qtr.	Latest		Level	Recent Trend	Impact on Const.
Commercial
Dow Jones composite REIT, index (Dow Jones)	192	98	W/E Dec 12th	112	Low	Falling
10-Year T-bill rate, % level (FRB)	4.1	3.78	W/E Dec 12th	2.67	Low	Falling
Office rent, 54 metro areas, % change y/y (PPR)	8.7	4.1	Q3	1.2	Low	Falling
Office vacancy rate, 54 metro areas, % level (PPR)	14.7	15.7	Q3	16.2	High	Rising
Office employment, % change y/y (P&PR)	1.1	-0.3	Q3	-0.5	High	Falling
Office construction starts ($s), 3-mon. ave. y/y % change (RCD)	10	-14	Nov	-19	Average	Falling
Hotel room rate, 54 metro areas, % change y/y (PPR)	6.8	3.8	Q2	1.6	High	Falling
Hotel occupancy rate, 54 metro areas, % level (PPR)	65.7	62.8	Q3	61.5	Average	Falling
Airline revenue passenger miles, % change y/y (RCD)	2.8	-4.8	Nov	-10.6	Average	Falling
Real price of gasoline (Nov 08 = 1.00), $s/gal. (U.S. Energy Dept.)	3.08	3.05	Aug	2.15	High	Falling
Hotel construction starts ($s), 3-mon. ave. y/y (RCD)	-11	-20	Nov	-12	High	Falling
Retail rent, 54 metro areas, % change y/y (PPR)	2.9	0.0	Q3	-2.1	Average	Falling
Retail vacancy rate, 54 metro areas, % level (PPR)	9.6	10.2	Q3	10.4	Average	Rising
Retail sales, % change y/y (U.S. Census Bureau)	5.8	-3.9	Nov	-6.7	Low	Falling
Consumer confidence index (The Conference Board)	87.8	38.8	Nov	44.9	Low	Rising
Consumer real income growth, % change y/y (U.S. Commerce Dept.)	3.2	-9.2	Oct	-10.4	High	Falling
Retail construction starts ($s), 3-mon. ave. y/y (RCD)	-9.0	-12.0	Nov	-6.0	Average	Falling
Industrial
Warehouse rent, 54 metro areas, % change y/y (PPR)	4.4	0.2	Q3	-0.4	Low	Falling
Warehouse vacancy rate, 54 metro areas, % level (PPR)	8.6	9.5	Q3	9.9	Average	Falling
Business inventory, % change y/y (U.S. Census Bureau)	3.2	5.4	Oct	4.6	High	Rising
Business sales, % change y/y (U.S. Census Bureau)	7.2	2.9	Oct	-1.4	Low	Falling
Warehouse construction starts ($s), 3-mon. ave. y/y (RCD)	12.0	-16.0	Aug	-39.0	Low	Falling
Capacity utilization rate, % level (FRB)	79.3	73.4	Nov	72.2	Low	Falling
Manufacturing production index (FRB)	115.1	108.3	Nov	106.7	Low	Falling
Goods Exports $ billions (U.S. Commerce Dept.)	100.4	107.8	Oct	104.8	High	Rising

Abbreviations: y/y = year over year; WE = week ending; FRB = Federal Reserve Board;
PPR = Property & Portfolio Research; RCD = Reed Construction Data.
Table: Reed Construction Data and Reed Construction Data - CanaData.

Key Indicators of the U.S. Market Environment — Sept 2008
Institutional and Engineering Construction
(Driven by demographics and government finances, as well as cyclical factors)

	Year Ago	Previous Month or Qtr.	Latest		Level	Recent Trend	Impact on Const.
Institutional
State & local govt. capital spending, $ billions (U.S. Commerce Dept.)	344	345	Q3	360	High	Rising
State & local government tax receipts, $ billions (U.S. Commerce Dept.)	1305	1343	Q3	1332	High	Falling
State budget reserves, % of Exp. (National Governors assn.)	10.5	n/a	FY 08	8.0	High	Falling
Stock market index (Dow Jones Industrial)	13,450	8,046	W/E Dec 15th	8,824	Low	Falling
K-12 enrollment, millions of people (U.S. Education Dept.)	55.762	n/a	2007-08	55.966	Average	Steady
Higher-education enrollment, millions of people (U.S. Education Dept.)	17.598	na/	2007-08	18.264	High	Rising
Hospital receipts, $ billions (U.S. Health & Human Services Dept.)	648.2		2007	696.7	High	Rising
Prison population, % change y/y (Pew Charitable Trust)	4.3	N/A	2007-08	2.5	High	Falling
Heavy/Engineering
Federal highway trust fund, $ billions (U.S. Treasury Dept.)	11,306	10,906	Nov	10,804	Low	Falling
Electric power capacity utilization rate, % level (FRB)	86.36	83.1	Nov	84.3	High	Falling
Airline revenue passenger miles, billions (RCD) (ann. % change)	2.8	-4.8	Nov	-10.6	Average	Falling
State & local govt. capital spending, $ billions (U.S. Commerce Dept.)	344	345	Q3	360	High	Rising
State and local government tax receipts, $ billions (U.S. Commerce Dept.)	1305	1343	Q3	1332	High	Falling
Heavy contractor employment, 000s (U.S. Labor Dept.)	999	934	Nov	922	High	Falling
Construction equipment shipments, % change y/y (U.S. Census Bureau)	-16.0	5.2	Oct	6.0	Average	Rising

Abbreviations: y/y = year over year; WE = week ending;
FRB = Federal Reserve Board; RCD = Reed Construction Data.
Table: Reed Construction Data and Reed Construction Data - CanaData.