Off the back of ending the first quarter of the year on a high, and in the wake of what is usually the year’s peak construction season, the Architectural Billings Index (ABI) has remained strong.
This May, a score of 53.0 marked the fourth positive month in a row as the Billings Index stays true to last year’s good form. If that continues, we can expect two more months of more-or-less the same. May was also an improvement on April, which reported a score 50.9. Also on the up was the projects inquiry index which rose from 60.2 to 62.4, and the design contracts index which increased slightly from 53.2 to 54.8.
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 fact that the data surrounding both new project inquiries and design contracts have remained positive every month this year, while reaching their highest scores for the year, is a good indication that both the architecture and construction sectors will remain healthy for the foreseeable future,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. in a press release. “This growth hasn’t been an overnight escalation, but rather a steady, stable increase.”
Key May ABI highlights:
• Regional averages: South (56.1), West (52.3), Midwest (50.4), Northeast (46.5)
• Sector index breakdown: mixed practice (55.8), multi-family residential (51.3), commercial / industrial (51.2), institutional (51.2)
• Project inquiries index: 62.4
• Design contracts index: 54.8