In comparison with 2008, the third quarter of 2009 has been relatively calm in the construction markets. While the markets have remained significantly depressed, with construction activity running well below the rates of the past few years, the structural economic fears that were present in September and October of 2008 have now largely abated. The broader financial markets are recovering a semblance of strength, and lending is beginning to flow more freely again. While job losses are continuing, the rate of attrition appears to have slowed in the recent months, and owners are beginning to consider reviving current projects and initiating new projects, particularly in the governmental and institutional sectors. Nevertheless, construction markets continue to be extremely weak, and it is likely to be some time before construction activity shows any sign of appreciable recovery or growth.

Of the 50 states, only two are showing growth in activity, year on year, these being Louisiana and North Dakota. Forty are showing double digit falls in activity, of which six are shrinking at over 20%. Altogether a total of 1.7 million construction jobs have been lost since the peak monthly employment in the summer of 2006, and over 1.5 million on a seasonally adjusted basis. Total construction spending is down sharply, with an annualized estimate of roughly $940 billion, some $130 billion below last year. Year to date spending through August 2009 is $84 billion less than year to date in August 2008.

This reduction in activity is leading to greatly increased competition among bidders and putting pricing pressure on projects. In most areas cost trends continue to be sharply negative, leading to moderate to strong construction price deflation.