NEW YORK, Jan 21 (Reuters) - A leading indicator of U.S. nonresidential construction activity rose slightly last month but remains near historic lows amid scarce credit, an architects’ trade group said on Wednesday.
The Architecture Billings Index rose to 36.4 in December, from 34.7 in November, according to the American Institute of Architects. Any reading below 50 indicates a decline in billings.
All the industry sectors tracked by the group remained below 50, as did all four of the geographic regions. A measure of inquiries for new projects fell to 37.7, a historic low.
“The inability to get financing for construction projects is a key reason that business conditions continue to be so poor at design firms,” AIA chief economist Kermit Baker said in a statement.
The AIA’s monthly survey began in 1995. It is considered a forward-looking measure of activity about nine to 12 months in the future.
Earlier this month, the AIA predicted nonresidential construction activity would fall 11 percent this year and another 5 percent in 2010. It cited falling company profits and the lack of credit to finance projects.
Spending on hotel construction is expected to decline by more than 20 percent this year and another 12 percent next year. Construction of retail, office and industrial facilities is seen falling by double digits this year, with the rate of decline slowing in 2010, the AIA said.
Companies that sell to the nonresidential construction market 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 Ltd (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) and Eaton Corp (ETN.N), among others, are also exposed to the sector. (Reporting by Nick Zieminski, editing by Dave Zimmerman)