NEW YORK, Oct 21 (Reuters) - A leading indicator of U.S. nonresidential construction spending rose slightly in September but remains at a level that indicates low demand for design services, an architects’ trade group said on Wednesday.
The Architecture Billings Index was up 1.4 points at 43.1, matching July’s level, according to the American Institute of Architects.
The index has remained below 50, indicating contraction in demand for design services, since January 2008. Its lowest recent reading was 33.3 in January.
A measure of inquiries for new projects, however, rose to 59.1, its highest in two years — “an encouraging sign,” said AIA Chief Economist Kermit Baker.
“Some larger stimulus-funded building activity should be coming online over the next several months, partially offsetting the steep decline in private commercial construction,” Baker said.
All four U.S. construction sectors tracked by the group, and all four geographic regions, remained below 50 in September.
Nonresidential construction includes commercial and industrial facilities like hotels and office buildings, as well as schools, hospitals and other institutions. The AIA’s Billings Index, which began in 1995, is considered a measure of construction spending nine to 12 months in the future.
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 Maureen Bavdek)