* October ABI up 2.5 pts to 49.4
* New projects index up 3 pts to 57.3
* AIA says demand for architects’ services volatile
Nov 16 (Reuters) - A leading indicator of U.S. construction activity rebounded in October, an architects’ trade group said on Wednesday.
The architecture billings index rose 2.5 points last month to 49.4, according the American Institute of Architects. Any reading below 50 indicates an overall decrease in demand for design services, a predictor of construction spending nine to 12 months in the future.
A separate index of inquiries for future projects rose 3 points to 57.3. That measure is more often above 50 as clients reach out to multiple architecture firms.
October’s rebound was encouraging, but demand for designs remains volatile, the group said. Conditions in various regions range from improving to poor and are likely to continue that way in coming months, the AIA said.
Conditions are strongest in the U.S. Northeast and weakest in the West.
A depressed construction market has been a headwind for manufacturers of construction machinery and components that make up buildings’ infrastructure, such as electrical, cooling and security systems.
Analysts who cover industrial stocks have called the billings index as important an economic indicator as the monthly industrial data from the Institute for Supply Management.
Most diversified industrial companies get at least some revenue from the nonresidential construction sector, which includes office buildings, retail and warehouse space, and institutional buildings such as schools and hospitals.
Companies exposed to the sector include Honeywell International Inc , Tyco International Ltd , Ingersoll Rand , Eaton Corp , Caterpillar Inc , Deere & Co and Terex Corp .
European companies such as Siemens AG , Schneider Electric SA and lock maker Assa Abloy are also significant players in the sector.