The month of January is supposed to be the time of year when we put our best foot forward and onto a treadmill. “New Year, New Me,” we tell ourselves as we pretend to train for that marathon and convince ourselves that fruit is somehow an appropriate substitute for dessert. (It’s not and you know that.)
With all of this in mind, we expected some best-foot-forward kind of numbers from the January Architecture Billings Index (ABI). But, no folks, it turns out that the ABI not only lost momentum from last year, it plunged into negative territory. Well, to be fair, it didn’t really plunge into negative territory so much as it dipped a toe into it, posting a score of 49.9, down from 52.7 in December. Since any score above a 50 indicates an increase in billings, 49.9 is not the end of the world.
By region, the South (54.8), West (49.3), and Midwest (50.8) all kept things positive, but the Northeast only managed a 46.0. Something similar played out by sector, with three of the four categories posting gains. Multi-family residential (51.4), institutional (53.0), and commercial/industrial (50.9), were all above 50, but then mixed practice went and ruined everything with a 46.9. The new projects inquiry index also had a sluggish start to the year, posting a 58.7 in January, down from 59.1 in December. The design contracts index meanwhile was recorded at 51.3.
All things considered, AIA Chief Economist Kermit Baker remained calm. “This easing in demand for design services is a bit of a surprise given the overall strength of the market over the past nine months,” he said in a statement. “Likely some of this can be attributed to severe weather conditions in January. We will have a better sense if there is a reason for more serious concern over the next couple of months.”