(EMBARGOED TO MIDNIGHT TONIGHT)
* April billings index 47.6, down 2.9 pts
* New project inquiries index 55.0, down 3.7 pts
* Financing an obstacle to recovery: AIA
By Nick Zieminski
NEW YORK, May 18 A leading indicator of U.S.
construction activity fell in April, hurt by tight financing
for projects, suggesting a hoped-for construction recovery may
be delayed, an architects' trade group said on Wednesday.
The architecture billings index fell almost 3 points last
month to 47.6, a level that indicates declining demand for
architecture services, according to the American Institute of
The AIA's index is considered a predictor of nonresidential
construction trends 9 to 12 months in the future.
A separate index of inquiries for new projects fell 3.7
points to 55.0, but remains above the 50 mark that indicates
expansion. This measure is typically higher than the billings
index because construction clients contact multiple architects
about future projects.
The declines may not indicate a wide reversal in demand
since April included unusual factors, like the threat of a U.S.
government shutdown and destructive storms, the trade group
said. However, funding for construction projects remains an
obstacle as large lenders are reluctant to fund projects.
"The majority of firms are reporting at least one stalled
project in-house because of the continued difficulty in
obtaining financing," said AIA Chief Economist Kermit Baker.
"That issue continues to be the main roadblock to recovery, and
is unlikely to be resolved in the immediate future."
A depressed construction market has been a headwind for
manufacturers, though analysts have forecast a rebound as soon
as later this year.
Most diversified industrial companies get revenue from
nonresidential construction, selling machinery used for
erecting buildings or components such as elevators or
electrical and cooling systems.
These include Honeywell International Inc (HON.N), Tyco
International Ltd TYC.N, Ingersoll Rand Plc (IR.N), Johnson
Controls Inc (JCI.N), Eaton Corp (ETN.N), Caterpillar
Inc.(CAT.N), Deere & Co (DE.N) and Terex Corp (TEX.N).
European companies such as Philips (PHG.AS), Siemens
AG(SIEGn.DE), Schneider Electric SA (SCHN.PA) and lock maker
Assa Abloy (ASSAb.ST) also participate in the sector.