* July billings index up 2.8 pts to 48.7
* Project inquiries index 56.3
* Demand for design services to track wider economy: AIA
NEW YORK, Aug 22 A leading indicator of U.S. construction activity rebounded in July but remained at a level that indicates declining demand for design services, according to an architects trade group.
The architecture billings index rose 2.8 points to 48.7 last month, the highest since March, the American Institute of Architects said on Wednesday. The billings index, which measures demand for architects' services, helps predict construction activity nine to 12 months ahead. Any measure below 50 indicates a decline in billings.
"As long as overall economic conditions continue to show improvement, modest declines should shift over to growth in design activity over the coming months," AIA Chief Economist Kermit Baker said in a statement.
A separate measure of new project inquiries rose 1.9 points to 56.3 last month. Multiple inquiries for the same project mean that this measure is typically higher than the billings index.
These monthly indexes are tracked by industrial companies and their investors as an indicator of future demand for machinery and components used to erect buildings. Most diversified manufacturers derive at least some sales from construction of office buildings, retail and warehouse space.
Companies exposed to the sector include Honeywell International Inc, Tyco International Ltd, Ingersoll Rand Plc, Cummins Inc, Eaton Corp , Manitowoc Co Inc, Caterpillar Inc, Deere & Co and Terex Corp.
European companies such as Siemens AG, Schneider Electric SA and lock maker Assa Abloy also get a portion of revenue from construction.