Construction activity indicator falls: AIA

CHICAGO (Reuters) - A leading indicator of U.S. construction activity fell for a second consecutive month in September as national credit problems seeped into the nonresidential market, an architects' group said on Wednesday.

The Architecture Billings Index fell to 51.9 in September, its lowest level since October 2006, from 53.9, the American Institute of Architects said. The index had dropped by 6 points in August.

"The fallout from the subprime mortgage meltdown in the residential market has seeped into the nonresidential sector, causing project delays and a tightening market for financing," AIA Chief Economist Kermit Baker said in a statement.

"There is also emerging concern in the industry that this situation will extend into 2008," Baker said.

Baker said there was plenty of nonresidential construction activity in the pipeline over the coming months, but demand for new projects has been tapering a bit.

Any score above 50 indicates an increase in billings. The index reflects a nine-months-to-a-year lag time between architecture billings and construction spending, making it a leading indicator of construction activity.

(Reporting by David Bailey, editing by Brian Moss)