* April billings index 47.6, down 2.9 pts
* New project inquiries index 55.0, down 3.7 pts
* Financing an obstacle to recovery: AIA
By Nick Zieminski
NEW YORK, May 18 (Reuters) - A leading indicator of U.S. construction activity fell in April, hurt by tight financing for projects, suggesting a hoped-for construction recovery may be delayed, an architects’ trade group said on Wednesday.
The architecture billings index fell almost 3 points last month to 47.6, a level that indicates declining demand for architecture services, according to the American Institute of Architects (AIA).
The AIA’s index is considered a predictor of nonresidential construction trends 9 to 12 months in the future.
A separate index of inquiries for new projects fell 3.7 points to 55.0, but remains above the 50 mark that indicates expansion. This measure is typically higher than the billings index because construction clients contact multiple architects about future projects.
The declines may not indicate a wide reversal in demand since April included unusual factors, like the threat of a U.S. government shutdown and destructive storms, the trade group said. However, funding for construction projects remains an obstacle as large lenders are reluctant to fund projects.
“The majority of firms are reporting at least one stalled project in-house because of the continued difficulty in obtaining financing,” said AIA Chief Economist Kermit Baker. “That issue continues to be the main roadblock to recovery, and is unlikely to be resolved in the immediate future.”
A depressed construction market has been a headwind for manufacturers, though analysts have forecast a rebound as soon as later this year.
Most diversified industrial companies get revenue from nonresidential construction, selling machinery used for erecting buildings or components such as elevators or electrical and cooling systems.
These include Honeywell International Inc (HON.N), Tyco International Ltd TYC.N, Ingersoll Rand Plc (IR.N), Johnson Controls Inc (JCI.N), Eaton Corp (ETN.N), Caterpillar Inc.(CAT.N), Deere & Co (DE.N) and Terex Corp (TEX.N).