Conditions in the residential construction market are likely to worsen in 2008, with housing starts falling another 25%, according to a research report from the Portland Cement Association. The large number of foreclosures caused by the subprime mortgage crisis will be a major contributor to rising home inventories, which will depress construction activity, said Edward J. Sullivan, PCA's chief economist. "Typically, builders accelerate start activity when the inventory supply reaches five months," Mr. Sullivan said. "A significant improvement in sales and inventory conditions is not expected until the second half of 2009." The economist projected that the housing inventory is likely to stand at a 9.5- to 10-month supply by the end of this year. PCA can be found on the Web at http://www.cement.org.

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