* January ABI 50.0, down 3.9 pts
* New projects index falls 5 pts to 56.5
* Cautious optimism for design industry: AIA
NEW YORK, Feb 23 A leading indicator of U.S.
nonresidential construction activity weakened last month after
two months of improving numbers, an architects' trade group
said on Wednesday.
The monthly Architecture Billings Index fell almost 4
points in January to 50.0, a level that indicates neither
expansion nor contraction of demand for design services, the
American Institute of Architects said.
The billings index is considered a predictor of
construction spending about nine to 12 months in the future,
since buildings are designed long before they are erected. The
latest readings suggest an anticipated recovery in U.S.
nonresidential construction may not gain traction this year.
A separate index of inquiries for new projects fell more
than five points to 56.5, according to the AIA.
"This slowdown is indicative of what is likely to be a very
gradual improvement in business conditions at architecture
firms for the better part of this year," said AIA chief
economist Kermit Baker. "We've been taking a cautiously
optimistic approach for the last several months and there is no
reason at this point to change that outlook."
The AIA's billings index dropped below 50 in January 2008,
indicating falling demand, and stayed below that mark until
last November. The separate inquiries index only fell below 50
briefly in 2008. It is typically higher than the billings
index, as prospective customers solicit bids from multiple
Most diversified industrial companies get at least some
revenue from nonresidential construction, selling machinery
used for erecting buildings or components such as elevators or
electrical and cooling systems.
A partial list includes Honeywell International Inc
(HON.N), Tyco International Ltd TYC.N, Johnson Controls Inc.
(JCI.N), Eaton (ETN.N), Caterpillar Inc (CAT.N), Deere & Co
(DE.N) and Terex Corp (TEX.N).
European companies such as Philips (PHG.AS), Siemens
(SIEGn.DE), Schneider Electric (SCHN.PA) and lock maker Assa
Abloy (ASSAb.ST) also participate in the sector.
(Reporting by Nick Zieminski; Editing by Steve Orlofsky)