Construction Industry Shows Signs of Cooling; Executives Seeing Chilling Effects of Higher Interest Rates.

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The construction industry is slowing its pace from last year's record run, according to the January Dun &Bradstreet Corporation survey of 200 U.S. construction executives.

&uot;Increasing mortgage rates are gradually, but inexorably, applying the brakes to the housing market,&uot; said David T. Kresge, chief economist for Dun &Bradstreet. &uot;Despite the booming economy and exceptionally high consumer confidence, the growth rate of home construction is likely to decelerate in the coming year if, as expected, mortgage rates continue to rise.&uot;

For the third month in a row, order books are growing more slowly, even when considering the usual seasonal pattern of decline. Construction executives also report declines in employment, but at a pace about normal for this time of year.

Current price growth is moderating, and executives report significantly lower expectations for price increases in the coming months. The survey found that order books and employment are expected to increase over the next three months. However, when seasonal factors are considered, both indexes indicate declining optimism since December, and optimism is considerably lower than it had been throughout much of 1999.

&uot;Overall order books are still being worked off and, while the pace is slowing from the torrid performance in 1999, the construction industry is still in very healthy shape,&uot; continued Kresge. &uot;If there are further increases in interest rates by the Federal Reserve, the resulting rise in mortgage rates will continue to push down housing demand, eventually leading to a more noticeable decline in construction activity.&uot;

Construction Industry Outlook Down from Year Ago

In the January 2000 construction survey index, executives expressed a moderated outlook for industry growth through April 2000. The Order Books Index climbed 23 points to 37, but remained twelve points below last January, displaying a clear downward trend when seasonally adjusted. The Employment Levels Index rose 4 points to 18, 14 points lower than last year's outlook and again seasonally low. The Prices Index fell seven points to 18, two points higher than one year ago, but low for this time of year.

Current Employment Levels Steady as Price Levels and

Order Books Decline

Current conditions for order books in the construction sector deteriorated for the third straight month in January while employment levels held steady following a three-month slide. The Order Books Index measuring current conditions declined six points to 9. While this is eight points ahead of the year-ago level, it is still low relative to the industry's performance this past year. The Employment Index rose slightly, adding one point to minus 5, a moderate increase even after allowing for seasonal effects. The Prices Index, which rose smartly in the December survey, reversed course, sliding 4 points to 26, and is now eight points above last January.

The Dun &Bradstreet Corporation

The Dun &Bradstreet Corporation (NYSE:DNB), based in Murray Hill, New Jersey, consists of the Dun &Bradstreet operating company and Moody's Investors Service. Dun &Bradstreet is the world's leading provider of business-to-business credit, marketing and purchasing information, and receivables management services. Moody's is the leading global provider of credit ratings, research, and analysis covering debt instruments and securities in the global capital markets. The Dun &Bradstreet Corporation employs approximately 11,500 associates in 37 countries with majority-owned company entities, and generated 1998 revenue of $1.93 billion. Additional information about The Dun &Bradstreet Corporation is available at www.dnbcorp.com.

THE DUN &BRADSTREET CONSTRUCTION SURVEY

                                1999        1999      1999       2000
                                Jan.        Nov.      Dec.       Jan.
Three-Month Expectation Indexes

Order Books                      49           4        14         37
Employment                       32           3        14         18
Prices                           20          16        25         18

Current Conditions Indexes

Order Books                       1          20        15          9
Employment                      -10           5        -6         -5
Prices                           18          20        30         26

The indexes are calculated by subtracting the percentage of respondents expecting/experiencing a decrease in new orders, employment and prices from the percentage expecting/experiencing an increase.

Source: Economic Analysis Department

The Dun &Bradstreet Corporation