There was $338.8 billion of residential construction in October, according to the Commerce Department; nonresidential--or commercial--construction equaled $417.7 billion in October. This represented a 0.7% drop from the previous month--the third decline in the past four months. The one bright spot in the Commerce Department's report was government building--these projects rose by 0.7% to an annual rate of $316.1 billion.

Other metrics are also charting a decline in commercial building. Last week the American Institute of Architects reported that the Architecture Billings Index--which is compiled from a monthly survey of architecture firms around the country--had hit its lowest level since the survey was launched 13 years ago.

"Until recently, the institutional sector had been somewhat insulated from the deteriorating conditions affecting the commercial and residential markets," Kermit Baker, AIA chief economist, says in a statement. "Now we are seeing that governments and nonprofit agencies are having difficulties getting bonds approved to finance large scale education and health care facilities, furthering the weak conditions across the construction."

Bottom line, Baker tells GlobeSt.com, is that non residential construction is in for a long tough road for at least a year. The billings index is a leading economic indicator for the industry and it began dropping at the beginning of the year, he says. Baker points out,"Then it moderated in the Spring and Summer and then took another downward dip with the credit problems of the fall."