Ed. note: We are pleased to offer members a regular update on key economic indicators that will help firms track trends in the business environment.

Residential: Good news—housing starts for 2001 came in at just over 1.6 million, up from that of 2000. The National Association of Homebuilders projects housing starts at almost the same level this year. (From the NAHB 2002 International Builders' Show, February 8–11, http://www.nahb.com/facts/default.htm)

Manufacturing: The ISM's monthly diffusion index , which hit its low point in October 2001, measured 49.9 in January (50 is considered a growth state). This, the strongest reading in 18 months, is the first sign that manufacturing is picking up (from the Institute for Supply Management, www.napm.org).

Commercial: The 2001 fourth-quarter office vacancy rate nationwide is 14%, up from 9% from the 2000 fourth quarter. One possible explanation is a correction from overleasing by overly optimistic dot.coms in 2000. Many major cities-including Chicago, Phoenix, Atlanta, and Dallas-are experiencing double-digit vacancy rates; only a handful (including Washington, D.C., and Charlotte) have rates below 7 percent. (From Colliers International, www.colliers.com).

—Kermit Baker, PhD, Hon. AIA, Chief Economist

Copyright 2002 The American Institute of Architects. All rights reserved.