Construction Sector Continues to Run at Full Speed; Order books predicted to fall off but prices expected to remain firm.MURRAY HILL Murray Hill may refer to one of the following places:
Construction industry executives report current conditions have remained extraordinarily strong despite higher mortgage rates. However, The Dun & Bradstreet Brad·street , Anne Dudley 1612-1672. English-born colonial poet who wrote several collections of verse, including The Tenth Muse Lately Sprung Up in America (1650). Corporation's September September: see month. 1999 survey of 200 U.S. construction executives forecasts that order books will fall significantly from near-record territory in the coming three months, even after making adjustments for the usual seasonal fluctuations. "The construction industry continues to operate at a blistering blis·ter·ing n. See vesiculation. pace, even though mortgage rates are a full percentage point higher than they were a year ago," said David T. Kresge, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the for Dun & Bradstreet (D&B). "The demand for housing remains very strong, even at the higher interest rates, because of the sustained growth in jobs, income, and personal wealth. Also, the industry is taking longer to work off the backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of orders because they are encountering shortages of both workers and materials. With these shortages persisting per·sist intr.v. per·sist·ed, per·sist·ing, per·sists 1. To be obstinately repetitious, insistent, or tenacious. 2. in the face of unrelenting demand, the expectation is for housing prices to keep moving up." Expectations for Construction Industry Order Books Fall Sharply, but Employment and Price Optimism Indexes Show Only Seasonal Declines In the September 1999 construction industry survey, optimism for future order books fell significantly from August levels, while the executive outlook for employment and prices held relatively steady after allowing for the usual seasonal movements. The Order Books Index for the coming three months fell fifteen points to 15, which is 10 points below year-ago levels. The Employment Levels Index shed one point to 10, which is smaller than the normal drop at this time of year. It indicates that the tight labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience conditions, which may have put the brake on even faster growth in 1999, are likely to persist for some time yet. The Prices Index fell one point to 17, but is three points above the year-ago level. Strong Current Conditions Leading to Difficult Labor Market for Employers, and Increasing Prices for Housing Indexes measuring current conditions for order books and prices remained at high levels in September, despite a modest decline from recent surveys. The Order Books Index remained strong at 27, nine points above last September but four points shy of the August figure. Based on the D&B survey, employment growth is quite healthy. The Employment Index for September gained seven points to 9. The September figure was slightly below July's survey result, but reflects a ten-point increase when compared to the year-ago period. The Prices Index, was at 28 in September, down a point from last month, and even with the September 1998 survey. This index is still stronger than usual for the time of year. A significant proportion of the construction industry executives reported that they were hampered by shortages of workers or materials. Twenty-two percent said that they were simply unable to find adequate supplies of skilled workers and another seven percent said that could not get the materials they needed. While these shortages are somewhat less severe than those reported in the summer, they still limit the ability of builders to catch up with demand. The Dun & Bradstreet Corporation The Dun & Bradstreet Corporation (NYSE NYSE See: New York Stock Exchange : DNB DNB Dictionary of National Biography DNB Drum N Bass (music) DNB De Nederlandsche Bank DNB Dun & Bradstreet (stock symbol) DNB Den Norske Bank DNB David Nelson Band ) consists of the Dun & Bradstreet operating company operating company A business that engages in transactions with outsiders. (D&B) and Moody's Investors Service Moody's Investors Service A leading global credit rating, research and risk analysis firm. Moody's Investors Service A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. . D&B is the leading provider of business-to-business credit, marketing and purchasing information, and receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed management services. Moody's Investors Service is the leading global provider of credit ratings, research, and analysis of debt instruments for the capital markets. The Dun & Bradstreet Corporation employs approximately 12,500 associates in 37 countries with majority-owned entities and reported 1998 revenue of $1.93 billion. Additional information is available at www.dnbcorp.com. THE DUN & BRADSTREET CONSTRUCTION SURVEY 1998 1999 1999 1999 Sept. July Aug. Sept. Three-Month Expectation Indexes Order Books 25 37 30 15 Employment 16 16 11 10 Prices 14 19 18 17 Current Conditions Indexes Order Books 18 36 31 27 Employment -1 11 2 9 Prices 28 26 29 28
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
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