Question-and-Answer Session
Operator
(Operator Instructions). And you first question comes form line of Ken Zener of Macquarie. You may proceed.
Kenneth Zener - Macquarie Research
Good morning.
Michael Thaman
Good morning Ken.
Kenneth Zener - Macquarie Research
Insulation has delivered a significant margin quarter-to-quarter, when sales rose about 340 million versus 280 averaging in the first half. Is that gain that we saw margins largely tied to better absorption?
Michael Thaman
Ken, when you look at the that insulation performance in the third quarter, I think one of the things we talked about in the prepared remarks was we have seen the business improve sequentially.
I think you're seeing two things going on there. One is we've traditionally thought about this business as being a very new residential construction business. But in fact today, new residential construction only represents about 33% or 35% I guess, on slide 10, 35% of the overall business. So while we did see seasonality that was giving us positive leverage in the business and helping third quarter results, we're also seeing that the other pieces of the business, the commercial and the industrial side of the business, our extruded polystyrene foam products, Latin America, Asia Pacific, the other pieces we report up through Insulation have started to form a bit of a bedrock of performance that underpins our residential performance.
So I think we saw continued stable performance out of the non-new construction piece and then we saw positive leverage for the new construction piece, which is why you're seeing what looks like pretty good positive operating leverage in the quarter.
Kenneth Zener - Macquarie Research
Okay. And then if I'm looking at Composites, given that it's obviously, you posted positive numbers not just during the quarter but margins, but for the whole quarter. Has the strength you've seen since your Analyst Day led you guys to change kind of I think the growth that you talked about at your Analyst Day for 2010 of 8 to 10% in Composites?
Michael Thaman
No, it really hasn't. At our Analyst Day, we did a fairly detailed analysis of the overall reinforcements market and I think any of the investors who were listening who haven't gone out to our investor website to see those presentations, I think they are valuable and some pretty high quality work. We are pretty proud of that.
What we show on that day was we expected that overall 2009 demand will be down as much as 20% versus 2008. And that's a 2008 that included a pretty weak fourth quarter. So if you take it on kind of a fourth quarter to '08 to third quarter of '09 basis, we've probably seen more than a 20% decline during that four quarter period. We did expect a recovery going into 2010. We don't expect that we're going to recover all the way back to 2008 levels for a couple of years here. So I would say, we're still comfortable believing that next year's maybe high single digits maybe in a good case, maybe all the way to double digit in terms of demand growth. But the recovery we've seen in the last three or four months has not changed our mid-term outlook for how quickly the market will go back to 2008 demand levels.
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