NEW YORK, June 24 (Reuters) - A leading indicator of U.S. nonresidential construction spending held steady for a second month in May, suggesting an economic recovery has stalled, an architects’ trade group said on Wednesday.
The Architecture Billings Index edged up a tenth of a point to 42.9 last month after a slight decline in the prior month, according to the American Institute of Architects.
The index has not crossed above 50 — a level that indicates improving demand for design services — since January 2008. Its lowest recent reading was 33.3 in January.
All four U.S. construction sectors tracked by the group, and all four geographic regions, remained below 50 in May, with the Northeast strongest at 48.3, its fifth straight monthly increase.
A measure of inquiries for projects dipped to 55.2, the third straight month that inquiries have held at a similar level but have not led to improved billings. The data indicated recovery has stalled, the AIA said.
“Numerous firms (have) bid for the same project, which is why the high level of inquiries is not necessarily translating into additional billings for project work at many firms,” AIA Chief Economist Kermit Baker said in a statement.
The AIA’s Billings Index, which began in 1995, is considered a measure of construction spending nine to 12 months in the future. Nonresidential construction includes commercial and industrial facilities such as hotels and office buildings, as well as schools, hospitals and other institutions.
Companies that sell to construction markets include diversified manufacturer Honeywell International Inc (HON.N), lighting maker Acuity Brands Inc (AYI.N) and electrical components maker Thomas & Betts Corp TNB.N, as well as heating and cooling systems makers Ingersoll-Rand Co (IR.N) and Johnson Controls Inc (JCI.N).
Caterpillar Inc (CAT.N), Deere & Co (DE.N), Terex Corp (TEX.N), Illinois Tool Works Inc (ITW.N), Parker-Hannifin Corp. (PH.N) and Eaton Corp (ETN.N) also participate in the sector. (Reporting by Nick Zieminski, editing by Leslie Gevirtz)