It’s six in a row for the Architecture Billings Index (ABI). This July, the reported score from the American Institute of Architects (AIA) was 51.9.
Despite this being down from June’s 54.2, the score means that the ABI hasn’t been in the red since January. Other scores, however, were up from the previous month. The projects inquiry index increased by 0.9 from 58.6 to 59.5 and likewise, the design contracts index increased from 53.7 to 56.4.
This six-month streak follows last year’s trend when six positive scores came during the same months. In 2016, however, the tide turned in August when that positive stretch was broken. The swing that year resulted in a dip from 51.5 to 49.7, continuing a downward trend from the previous months, and a similar scenario is being set up here.
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 July figures show the continuation of healthy trends in the construction sector of our economy,” said AIA Chief Economist Kermit Baker in a press release. “In addition to the balanced increases in design billings across all major regions and construction sectors, the strong gains in new project work coming into architecture firms points to future growth in design and construction activity over coming quarters.”
Key July ABI highlights:
• Regional averages: South (53.8), Midwest (53.8), Northeast (53.6), West (50.9)
• Sector index breakdown: multi-family residential (55.8), commercial / industrial (55.4), institutional (52.0), mixed practice (48.4)
• Project inquiries index: 59.5
• Design contracts index: 56.4