NEW YORK (Reuters) - A leading indicator of U.S. construction activity jumped last month, led by demand for new apartment buildings, suggesting U.S. builders and their suppliers may see more work in coming months.
The September architecture billings index rose 1.4 points to a reading of 51.6, the fastest increase since late 2010, according to the American Institute of Architects. The billings index is considered a predictor of construction nine to 12 months ahead.
A separate measure of inquiries for new projects was little changed at 57.3. Any reading above 50 indicates increasing demand for architects’ services.
The September jump was led by the multifamily residential sector. Demand for apartment rentals has been lifted by home foreclosures, tighter rules for mortgage approvals and fewer home buyers, the AIA said.
Industrial companies and their investors track these monthly indexes as an indicator of future demand for machinery and components used to erect buildings. Most diversified manufacturers derive at least some sales from the construction business.
Companies exposed to the sector include Honeywell International Inc (HON.N), Tyco International Ltd TYC.N, Ingersoll Rand Plc (IR.N), Cummins Inc (CMI.N), Eaton Corp (ETN.N), Manitowoc Co Inc (MTW.N), Caterpillar Inc (CAT.N), Deere & Co (DE.N) and Terex Corp (TEX.N).
Reporting by Nick Zieminski in New York; Editing by Lisa Von Ahn