* Jan. architecture billings index down 2.9 pts to 42.5
* New project inquiries index lowest since July
* Lenders set stringent equity requirements
NEW YORK, Feb 24 (Reuters) - A leading indicator of U.S. nonresidential construction spending fell in January to its lowest level since August 2009 as construction projects kept getting delayed or canceled, an architects’ trade group said on Wednesday.
The Architecture Billings Index was down up 2.9 points to 42.5 last month, 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 in January 2009, when it reached a revised 33.9 level.
“Lending institutions are placing unusually stringent equity requirements on new developments,” said AIA Chief Economist Kermit Baker.
“This serious situation is being compounded by a skittish bond market, decreased tax revenues for publicly financed projects and declining property values,” he said.
A measure of inquiries for new projects fell more than 7 points to 52.5, its weakest reading since July. This measure has been higher than the billings index throughout the downturn, partly reflecting competition among architecture firms for the same projects.
All four U.S. geographic regions stayed below 50 in billings in January, as did three of the four construction sectors. Billings for apartment buildings, however, rose to 50.1 from a revised 49.3 the month before, suggesting that construction of multifamily dwellings could rebound earlier than other sectors.
AIA’s January data incorporate seasonal adjustments from the U.S. Commerce Department, so some historical numbers were revised lower or higher.
Nonresidential construction includes commercial and industrial buildings such as hotels and offices, as well as schools, hospitals and other institutions. The AIA’s billings index, begun 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, electrical components maker Thomas & Betts Corp TNB.N and heating and cooling systems makers Ingersoll-Rand Plc 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, Manitowoc Co. MTW.N, Oshkosh Corp OSK.N and Eaton Corp ETN.N also derive portions of their revenues from this sector. (Reporting by Nick Zieminski, editing by Gerald E. McCormick)
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