"Our Confindex declined to 127 from 128 [on a scale of 200] for the third quarter," says Stuart Binstock, CEO of CFMA. "There is a consistent feeling among our members that things are getting better but that the market is not recovering as fast as previous recessions." He also notes that many CFOs answering the CFMA survey are concerned that margins are not improving as quickly as it has during past recoveries.

The CICI survey also asked construction executives if their clients' access to capital for project financing has improved or gotten worse in the past six months. In the third quarter, 39.1% said project financing was "somewhat easier" or "much easier" than it was six months ago, up from 37.6% in the second quarter and only 31.9% in the first quarter. Only 9.6% said project financing was tougher to come by in the third quarter.

Many survey respondents commented that financial institutions are beginning to open up to project financing. This loosening has brought back developers to the market, says one. However, there is a concern that lenders are remaining cautious. "There is capital [for project financing] out there, but it is not confident capital," says Anirban Basu, CEO of economic consultant Sage Policy Group Inc., Baltimore, and CFMA economic adviser.

Basu says interest rates have been creeping up slowly over the past few months. "The problem now is not the availability of money for projects but the cost of that money. The last thing the industry needs in trying to recover is an increase in interest rates, and that is what we have been seeing," he says.

Surprisingly, few construction executives who participated in either the CICI or Confindex survey raised the issue of the federal budget debt-limit debate as an issue in the industry recovery. "I think that people have just become numb to the issue. Every September it comes up and is eventually resolved," says Basu.

However, Binstock is frustrated at the non-stop political brinkmanship between Congress and the administration. "I think the industry is tired of Washington playing chicken with the economy."

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