A leading indicator of U.S. construction activity improved for the fifth consecutive month in October as demand for design services continued to recover, an architects' trade group said on Wednesday.
The October architecture billings index rose 1.2 points to a reading of 52.8, led by demand from builders of apartment buildings, according to the American Institute of Architects (AIA). The billings index is considered a predictor of construction spending nine to 12 months into the future.
After declining earlier in 2012, the billings index began to turn higher in June, then accelerated, and has now marked its third straight month above the 50 level, which indicates expanding demand for architects' services.
"It's beginning to look like demand for design services has turned the corner," said AIA Chief Economist Kermit Baker.
A separate measure of inquiries for new projects rose 2.1 points to 59.4, its 45th straight month above the 50 mark. The new projects index is typically higher than the billings measure since clients contact multiple architecture firms in the early stages of a project.
Industrial companies and their investors track the monthly indexes as an indicator of future demand for machinery and components used to erect buildings. Most diversified manufacturers derive at least some sales from construction.
Companies exposed to the sector include Caterpillar Inc., Honeywell International Inc., Tyco International Ltd., Ingersoll Rand Plc, Cummins Inc., Eaton Corp., Manitowoc Co. Inc., Oshkosh Corp., Deere & Co. and Terex Corp.
European companies such as Siemens AG, Schneider Electric SA and lock maker Assa Abloy also get a portion of revenue from U.S. construction.
© 2014 Thomson/Reuters. All rights reserved.