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Time to send in the Reinforcements? Some experts say the construction market has bottomed out and that work will soon begin to pick up. Others aren't as optimistic.

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CRUSHED BY THE CREDIT CRUNCH, the nonresidential construction market has been gasping for air for months. Is the pressure beginning to ease or will the market squeeze continue? There is no consensus view.

Some observers fear that the small number of new projects being added to the construction pipeline is a harbinger of continued weakness. Others say that a recent pickup in inquiries offers at least a glimmer of hope that the bottom is near.

Currently, the construction market is "dismal at best," says Michael Busse, sales and marketing manager for Fort Wayne, Ind. based Steel Dynamics Inc.'s Structural and Rail Division.

Of like mind is Ken Simonson, chief economist for the Associated General Contractors of America, Arlington, Va., who says demand for most types of construction work has gotten worse in the last few months.

The magnitude of the decline has been masked by different methods of statistical reporting. The U.S. Department of Commerce's "put in place" construction spending numbers were still showing slight growth as recently as the first quarter of 2009 due to the completion of certain projects that were begun several years ago. "But in the real world, as it relates to steel and other building materials, the market has gone off the cliff," says one executive who asked to remain anonymous. He believes the building construction market "will continue to be in a wipeout at least through 2011," and that it might not see a noticeable turnaround until late 2012 or early 2013.

Others see the market very differently. Jim Kirkvliet, vice president of sales and marketing for Gerdau Ameristeel, Tampa, Fla., says that while steel sales to the nonresidential construction market this year will be down compared with 2008, he believes the decline has already reached bottom.

Lourenco Goncalves, chairman, president and chief executive officer of Metals USA Inc. in Houston also reports signs of improvement. "It isn't anything huge yet, but it is starting to pick up," he says.

Even though there has been an uptick in quoting activity, it hasn't necessarily translated to increased orders yet. "More times than not, new projects are waiting for funding," says Burt Tenenbaum, president of Chatham Steel, Savannah, Ga.

"While certain projects that are already in the pipeline continue to go ahead, nonresidential construction starts are currently the lowest they have been since our association started tracking them in 1970," says John Cross, vice president of the American Institute of Steel Construction in Chicago.

Several...