A leading indicator of U.S. nonresidential construction spending rose in October to levels last seen before the economic crisis, providing an early signal of a possible recovery in U.S. construction activity, an architects' trade group said on Wednesday.
The Architecture Billings Index was up 3 points at 46.1 last month, its highest level since August 2008, according to the American Institute of Architects.
The index has remained below 50, indicating contraction in demand for design services, since January 2008. Its lowest recent reading was 33.3 in January.
The increase in billings could be "an early signal towards a recovery for the design and construction industry," said AIA Chief Economist Kermit Baker.
"On the other hand, because we continue to get reports of architecture firms struggling in a competitive marketplace with a continued decline in commercial property values, it is far too early to think we are out of the woods."
A measure of inquiries for new projects dipped to 58.5, from 59.1 in September.
All four U.S. construction sectors and all four geographic regions tracked by the group remained below 50 in October.
Nonresidential construction includes commercial and industrial facilities like hotels and office buildings, as well as schools, hospitals and other institutions. The AIA's Billings Index, which began in 1995, is considered a measure of construction spending nine to 12 months in the future.
Companies that sell to construction markets 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 (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), Parker-Hannifin Corp (PH.N) and Eaton Corp (ETN.N) also participate in the sector. (Reporting by Nick Zieminski; Editing by Richard Chang)