The Architecture Billings Index, considered a leading indicator of U.S. non-residential construction, rose in July to a seven-year high, the American Institute of Architects said on Wednesday.
The ABI rose to 55.8 in July, from 53.5 in June, reflecting an increase in design activity.
"The last three months have shown steadily increasing demand for design services, and the Architecture Billings Index (ABI) is now at its highest level since 2007," the institute said in a statement.
The index, which is based on a survey of U.S. architects, reflects the roughly nine to 12 months between architecture billings and construction spending. A reading above 50 indicates expanding demand for architects' services.
Industrial companies and their investors track the monthly indexes as an indicator of future demand for machinery and components used to erect buildings.
The improving index represents the latest evidence of a stronger recovery of the U.S. non-residential construction market. Several U.S. manufacturers whose fortunes are linked to non-residential construction spending cited rising orders and increasing optimism during their most recent quarterly earnings reports.
"Business conditions for the design and construction marketplace, and those industries associated with it, appear to be well positioned for continued growth in the coming months," Kermit Baker, chief economist with the AIA, said in the statement.
A separate measure of new projects ticked down to 66 from 66.4 in June. The architects' group characterized the June level as "very strong."
(Reporting by Lewis Krauskopf; Editing by Leslie Adler)