‘Stimulus’ passes but construction funds are tight.

The biggest market-moving report of the week was the Institute for Supply Management (ISM)’s non-manufacturing index, with a reading of 44.6 out of 100, which “indicates contraction within the nonmanufacturing sector for January 2008. Nonnmanufacturing business activity contracted for the first time since March 2003.” It is impossible to know how representative this indicator is of actual conditions, however: ISM does not report how many responses it received and does not weight responses by firm size or the magnitude of the increases or decreases. Also, the survey is less than a decade old, so there is no prior experience with predicting downturns. Respondents listed the following items relevant to construction as up in price: copper wire, fuel and fuel surcharges, and steel products. Wallboard was listed as down in price.