It’s time to panic. Well, not panic, maybe, but frown a little bit: after a generally positive showing in 2015, the Architecture Billings Index (ABI) is back in negative territory. The January ABI score was 49.6, down from 51.3 in December 2015.
As AIA Chief Economist Kermit Baker will have you know, any score below 50 indicates a decrease in billings. “The fundamentals are mostly sound in the nonresidential design and construction market,” said AIA Chief Economist Kermit Baker in a statement. “January was a rocky month throughout the economy, with falling oil prices, international economic concerns, and with steep declines in stock market valuations in the U.S. and elsewhere. Some of the fallout of this uncertainty may have affected progress on design projects.”
(If these numbers seem to contradict the previous month’s readings, that’s because each January, the AIA research department updates seasonal factors used to calculate ABI, which results in a revision of recent ABI values.
January’s new projects inquiry index was down 5.2 points from the previous month, for a score of 55.3. Design contracts were also down, by 0.1, but remained in positive territory for a January score of 50.9.
Sector billings were mixed. Multi-family residential billings were down one point, at 51.9, and institutional billings were at 49.9, down 2.3 points over the previous month. Commercial/industrial billings (50.5) were up by 3.2 points, while mixed practice (49.0) rose 2.5 points.
The Northeast (50.4) and Midwest (48.9) saw increases of 3.7 and 2.8 points, respectively, while the South (50.3) and West (50.8) saw decreased of 3.0 and 2.9 points.
Don’t forget: The ABI, the leading economic indicator of construction activity, reflects a nine to 12 month lead time between architecture billings and construction spending. The national index, design contracts, and inquiries are calculated monthly, while the regional and sector categories are calculated as a three-month moving average.