Moody's to cut more building products makers

Moody's Investors Service expects to downgrade more building products companies by the time the housing market recovers because the sagging real estate values and illiquidity have crimped the industry, the ratings agency said Thursday.

Companies in the sector _ which makes products used to build or repair homes _ have been struggling due to the housing slump.

While many building products companies already have bad ratings and too much debt, Moody's expects conditions to worsen, leading to more downgrades in the coming months.

Many of these companies have constrained liquidity and face higher costs, Moody's said.

The ratings agency foresees a possible rebound in late 2009, but for now companies in the sector need to shrink and become more efficient.