October 1, 2008
U.S. Nonresidential Construction Index Rises

NEW YORK - A forward-looking measure of U.S. nonresidential construction activity posted its third consecutive monthly improvement last month but continued to point to unfavorable conditions, an architects' trade group said on Wednesday.

The Architecture Billings Index rose 0.8 to 47.6 in August, according to the American Institute of Architects. A reading below 50 indicates a decline in billings, a leading indicator of construction activity about nine to 12 months in the future.

A separate measure of inquiries for new projects fell to 52.4 from 54.6 in July.

"The news for industries affected by the construction industry is that looking back 12 to 18 months, the numbers were extremely healthy," AIA Chief Economist Kermit Baker said. "That means many of those projects are currently in or entering the construction phase, so there should still be demand for labor and building materials, and later on interiors, computer equipment and the like."

There was continued demand for projects such as schools, hospitals and government buildings, with the institutional category of the index remaining positive going all the way back to 2004.

The Midwest, with a reading of 49.4, recorded the strongest billings, but was down from 50 in July. The South, at 45, was the weakest region.

Companies that sell into the nonresidential construction market include diversified Honeywell International Inc; Cooper Industries Ltd, a maker of electrical products and tools; lighting maker Acuity Brands Inc; electrical components maker Thomas & Betts Corp; and Johnson Controls Inc, which provides heating, ventilation and cooling systems.

Source: Reuters, September 17, 2008

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Brought to you by the Steel Framing Alliance (SFA) on the first Wednesday of each month, Framework Online arms you with the latest news and commentary on the steel framing and construction industries. In addition to industry headlines, trends and project profiles, Framework Online provides information and ideas that will better enable members to increase their participation in the residential and commercial construction markets.