The Architecture Billings Index (ABI) has continued its surge as the first quarter of the year ended and the American Institute of Architects (AIA) reported a March ABI score of 54.3, up from 50.7 the previous month.
The new year ABI hangover (now seemingly customary) is now all but a distant memory as the ABI established a two-month-long positive streak. Last year, the ABI score for January was 49.6 but the following six months were all positive scores. Additionally, the new projects inquiry index was 59.8, down from a reading of 61.5 the previous month, while the new design contracts index dipped from 54.7 to 52.3. So let’s not get ahead of ourselves.
The ABI is the leading economic indicator of construction activity. It reflects a 9 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. The index runs on a scale from 0-100 and scores above 50 suggest growth while anything below implies negativity in the market.
“The first quarter started out on uneasy footing, but fortunately ended on an upswing entering the traditionally busy spring season,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “All sectors showed growth except for the commercial/industrial market, which, for the first time in over a year displayed a decrease in design services.”
Key March ABI highlights:
• Regional averages: Midwest (54.6), South (52.6), Northeast (52.4), West (50.2)
• Sector index breakdown: multi-family residential (54.6), mixed practice (53.7), institutional (52.9), commercial / industrial (49.8)
• Project inquiries index: 59.8
• Design contracts index: 52.3