November 21, 2008

Architecture Billings Index in the U.S. falls five points in October 2008

NEW YORK

A forward-looking index of U.S. non-residential construction activity fell to the lowest level in its 13-year history last month as spending slumped on healthcare and educational facilities, an architects’ trade group said on Wednesday.

The Architecture Billings Index fell more than 5 points to 36.2 in October, the American Institute of Architects said. A reading below 50 indicates a decline in billings.

A separate measure of inquiries for new projects fell to 39.9, from 51 in September, also reaching a record low.

“Governments and nonprofit agencies are having difficulties getting bonds approved to finance large-scale education and healthcare facilities,” AIA chief economist Kermit Baker said. “Until recently, the institutional sector had been somewhat insulated.”

The AIA’s survey began in 1995. It is considered a leading indicator of construction activity about nine to 12 months in the future.

Major U.S. firms that sell to the non-residential construction market include Honeywell International Inc.; lighting maker Acuity Brands Inc. ; electrical components maker Thomas & Betts Corp.; Ingersoll Rand Co Ltd., Johnson Controls and Caterpillar.

Reuters

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