Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Tom Hayes - Piper Jaffray.
Tom Hayes - Piper Jaffray
In your expectations, when you talked about FY ?10 for a sells decline of at least 10%, are you expecting that the order activity would remain stable at the current levels or change materially up or down from these current levels?
Russ Huffer
Tom, what I expect is that the market will come to some normalized level of activity. What we’re seeing right now in terms of this stretching of bid to award, there are different reasons why that’s occurred and I think that once that gets normalized, whether it’s financing or just hesitation or people just being cautious, once they get into a more of a normal globalized role, then we’ll see that start to come back to a different number and see awards start to go up.
Tom Hayes - Piper Jaffray
Okay. I guess is next, could you just comment on the projects that are currently entering the backlog, some indication for the margin profile of those projects. Obviously they were projects that were awarded before the slow down. Would they have a more typical margin profile that we saw of business had in the third quarter?
Russ Huffer
It’s consistent, but we are seeing some down. If you recall, we talked before, especially in our businesses that were sold out that we were concentrating on North America and larger contracts because the margins were better. As we move into broader markets, international margins will come down a little bit in those areas, but the other areas are holding up at this point in time. I’m not saying that I know that will happen long term, but right now there’s downward pressure, but they’re not radically moving.
Jim Porter
Tom this is Jim. I’ll just kind of add to it as well, to echo what Russ said. There are some pressures from a pricing standpoint, but it’s not across the board, but then also, as we indicated, we have taken a number of measures relative to costs. So not a dramatic impact on margins based on what we’re seeing in projects entering the backlog today.
Tom Hayes - Piper Jaffray
So there’s not a lot of pricing pressure from competition or is it just slow demand or a combination that’s putting the pressure on the pricing?
Jim Porter
We’re seeing in some markets and in some projects, definitely increased competition. Obviously where we have unique offerings or situations, obviously we can maintain things, but in other areas we’re definitely seeing significant increases in competition, but it’s local competition, but people just get busier on either the residential sector other types of work.
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