• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Industrials

The Tide Could Turn in Non-Residential

Construction in this area has badly lagged, but recent data suggest it is now poised for improvement.
By STEPHANIE LINK Feb 20, 2014 | 02:00 PM EST
Stocks quotes in this article: ETN, JCI, HON, SWK, LII, WSO

One theme for 2014 on which we've been very bullish in Action Alerts PLUS has been the expected recovery in the non-residential construction market.

Thus far, this area has badly lagged the recovering residential market, and we watch the monthly Architectural Billings Index on a regular basis as a gauge on a potential pick-up in activity. The ABI is a leading indicator for non-residential construction demand, and it carries a nine-to-12-month lag between billings and the actual pick-up in construction. Well, in January the ABI rose back above the 50 expansionary figure to 50.4 vs. last month's 48.6. In addition, it has now seen expansion in 15 out of the last 18 months.

Since it's a volatile series, we usually look at the ABI's three-month moving average. That currently stands at just under 50 due to softness in both November and December -- but 49.6 is still a solid number, and the six-month average is 51.3. December's six-month mean had been 51.8.

Meanwhile, January's new-projects-inquiries index is 58.5, and the three-month average stands at 58.7.

By region, billings in the West and South have been the strongest of late, having registered above 50 for four consecutive months. That's been offset by weakness in the North and Midwest, whose results have likely been impacted by weather: Both regions have come in below 50 for the last three months.

Overall, the news constitutes another piece of evidence that the non-residential market is poised for improvement.

Stocks that will benefit for the long term are Eaton (ETN), Johnson Controls (JCI), Honeywell (HON), Stanley Black & Decker (SWK), Lennox (LII) and Watsco (WSO).

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Link co-manages as a charitable trust, was long ETN, HON and JCI.

TAGS: Investing | U.S. Equity | Industrials | Real Estate | Stocks

More from Industrials

Bearish Bets: 3 Sluggish Stocks You Should Consider Shorting This Week

Bob Lang
May 15, 2022 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

Bearish Bets: 3 Slumping Stocks You Should Consider Shorting This Week

Bob Lang
May 8, 2022 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

Bears Remain in Control of Rockwell Automation

Bruce Kamich
May 4, 2022 9:12 AM EDT

ROK continued to weaken Tuesday. Here's our latest outlook.

Plug Power Is a Strictly Speculative Name: Here's My Trade Idea

Stephen Guilfoyle
Apr 19, 2022 10:35 AM EDT

PLUG has a number of high volume clients and that could be huge going forward.

Are Linde's Charts Foreshadowing Economic Weakness?

Bruce Kamich
Apr 18, 2022 2:58 PM EDT

Here's what to avoid with LIN.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:14 PM EDT PAUL PRICE

    A New, Very Scary Movie

  • 08:51 AM EDT PAUL PRICE

    Advice From the Future...

  • 12:20 PM EDT PAUL PRICE

    A Blast From the Past Regarding Bitcoin

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login