Last fall the authors of the UCLA Anderson forecast, upon which the Northamerican Heating, Refrigeration & Airconditioning Wholesalers Association (NHRAW) bases its sales projections, suggested the economy was still "looking bright" and the Fed was to remain on "watch and hold."

Since then several leading national indices have declined, including the Residential and Non-residential Construction Expenditures.

In January the Fed reduced federal fund rates for the most dramatic back-to-back cuts in nearly a decade. According to McGraw-Hill economist David Wyss, the actions may not have a major impact on construction projections for 2001, as some decline in interest rates was already anticipated in published forecasts.

The National Association of Home Builders (NAHB) is predicting another 5% decline in housing starts in '01 following a comparable decline in 2000.

As a consequence, the current computer generated sales forecast projects hvacr wholesale sales (in dollars) could be down as much as 5.5% at median in 2001. Meanwhile, contracting for new construction in January advanced 5% to a seasonally adjusted annual rate of $480.2 billion, according to the F.W. Dodge Division of the McGraw-Hill Companies. Healthy gains were reported for nonresidential building and nonbuilding construction (public works and utilities), while residential building witnessed slight growth.

"Still, January's report," according to McGraw-Hill, "is consistent with the sense that total construction activity in 2001 will be able to avoid a sharp downturn, with activity instead remaining close to the elevated amount achieved last year."

Nonresidential building in January jumped 10% to $183.2 billion, with school construction up 13% and health care facilities up 17%. Church construction was up 11%, and amusement related projects were up 32%. Public buildings, mainly courthouses and jails, were up 49%.