Posts tagged with "ABI":

Placeholder Alt Text

Architecture Billings Index clings on to positive score as 2016 comes to a close

The Architecture Billings Index (ABI) is honing in on ending the year on a high note, albeit while whimpering over the line. November saw a positive score reported for the month—the second in succession after a previous two-month slump. The score indicated a subtle increase in design services. The new projects inquiry index was 59.5, up from a reading of 55.4 the previous month. The overall score for November was 50.6, marginally less than October's 50.8 The ABI, the leading economic indicator of construction activity, 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. “Without many details of the policies proposed, it’s still too early to tell the likely impact of the programs of the new administration,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “However, architects will be among the first to see what new construction projects materialize and what current ones get delayed or canceled, so the coming months should tell us a lot about the future direction of the construction market.” Key November ABI highlights: Regional averages: South (51.3), Midwest (50.9), Northeast (50.8), West (48.6) Sector index breakdown: Multi-family residential (51.7); Mixed practice (51.3); Commercial / Industrial (50.4); Institutional (49.5) Project inquiries index: 59.5 Design contracts index: 50.2
Placeholder Alt Text

Architecture Billings Index peaks at highest score in a year

After a positive response to a rough to the year, the U.S. Architectural Billings Index (ABI) has pressed on to reach its highest score in almost a year. Steered by an "active" multi-family housing market, billings have been supported by steady demand for commercial and retail properties.

The ABI, the leading economic indicator of construction activity, 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.

This May, the ABI hit a score of 53.1, up from 50.6 in April. Earlier this year however, the score was as low as 49.

“Business conditions at design firms have hovered around the break-even rate for the better part of this year,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD in a press release. “Demand levels are solid across the board for all project types at the moment. Of particular note, the recent surge in design activity for institutional projects could be a harbinger of a new round of growth in the broader construction industry in the months ahead.”

The scores in detail are as follows:

  • Regional averages: West (53.8), South (53.7), Northeast (51.2), Midwest (49.9)
  • Sector index breakdown: multi-family residential (53.7), institutional (53.0), commercial / industrial (51.0), mixed practice (51.0),
  • Project inquiries index: 60.1
  • Design contracts index: 52.8
Placeholder Alt Text

Much to Kermit Baker’s chagrin, the January Architecture Billings Index (ABI) thaws prematurely

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.
Placeholder Alt Text

Kermit Baker is unruffled by the 3.8 point drop in November’s Architecture Billings Index

As temperatures dipped in November, so did the Architecture Billings Index (ABI). The ABI was 49.3, a 3.8 point drop from October's 53.1. Any score below 50 represents a decrease in billings. AIA Chief Economist Kermit Baker seemed unfazed by the drop in billings. “Since architecture firms continue to report that they are bringing in new projects, this volatility in billings doesn’t seem to reflect any underlying weakness in the construction sector. Rather, it could reflect the uncertainty of moving ahead with projects given the continued tightness in construction financing and the growing labor shortage problem gripping the entire design and construction industries.” New projects inquiries were at 58.6, a touch above last month's reading of 58.5. The design contracts index rose to 53.5, an increase 1.8 points from October. Regional averages were mostly down: the Midwest sank to 47.8 from 52.6 last month, the Northeast dropped three points to 46.2, and the South dropped 0.8 to 55.4. The West gained 0.1 points over last month, coming in at 54.5. Billings by sector were a mixed bag. Multi-family residential and institutional billings climbed, while commercial/industrial and mixed practice fell. At 53.8, multi-family residential was up 1.3 points from October. Institutional billings gained 0.6 points in the same time frame. Commercial/industrial fell 4.1 points to 51, and mixed practice was at 47.6, an astonishing 7.3 point drop from the previous month. A quick note on the data: national index, design contracts, and inquiries are calculated monthly. Sector and regional categories are calculated as a three month moving average.
Placeholder Alt Text

October’s Architecture Billings Index down slightly from September, though demand for design services remains high

In fall, warm blooded animals usually slow down as they prepare to hibernate for winter. Yet, the Architecture Billings Index (ABI) demonstrates few signs of winter slumber, with increased demand for design services in almost every category. The October ABI of 53.1, the AIA reports, is down 0.6 points from September, but any score over 50 represents an increase in billings. The ABI is the primary economic indicator of construction activity, reflecting a nine to 12 month lead time between architecture billings and construction spending. “Allowing for the possibility of occasional and minor backsliding, we expect healthy business conditions for the design and construction industry to persist moving into next year,” AIA Chief Economist Kermit Baker said in a statement. “One area of note is that the multi-family project sector has come around the last two months after trending down for the better part of the year.” October's new projects inquiry index was 58.5, down from September's 61.0. Design contracts fell by 1.5 points to 51.7. The South lead the regional averages with a score of 56.2, up from a score of 54.5 in September. The West trailed at 54.4, followed by the Midwest (52.6), and the Northeast at at a paltry 49.2, though up 5.5 points from the previous month. Commercial and industrial construction led the sector breakdowns at 55.1 points, up 4.2 points from September. Mixed practice jumped 2.3 points to 54.9, and multifamily residential climbed 3 points to 52.5. Institutional sector held steady at 51.4, a drop of 0.1 from last month. The national index, new projects inquiries, and design contacts indexes are calculated monthly, while the regional and sector categories are calculated as a three month average.
Placeholder Alt Text

Architecture Billings Index declines sharply in August after a strong year

The Architecture Billings Index declined in August after a relatively robust year. The August ABI score was 49.1, a decline of 5.6 points from July. In July, the new projects inquiries index was 63.7, while August's number decreased by 1.9 points to 61.8. Regional averages were 50.2 (West), 56.1 (Midwest), 46.8 (Northeast), and 53.8 (South). "Over the past several years, a period of sustained growth in billings has been followed by a temporary step backwards," AIA Chief Economist Kermit Baker said in a statement. "The fact that project inquiries and new design contracts continue to grow at a healthy pace suggests that this should not be a cause for concern throughout the design and construction industry." By sector, mixed practice (52.8) and institutional (53.7) were in positive territory, while commercial / industrial (49.7) and multi-family residential (49.5) just skirted the positive mark. The design contracts index was 55.3 for August, an increase of 0.8 points over July.
Placeholder Alt Text

Architectural Billings Index Continues Slump With Third Month in the Red

The Architectural Billings Index (ABI) for June remained in negative territory for the third month in a row. Last month AIA chief economist Kermit Baker expressed concern that the summertime doldrums might mirror a 2011 trend when the ABI lulled after an initially healthy first quarter. Now it looks as though the index is doing just that. “While not all firms are experiencing negative conditions, a large share is still coping with a sluggish and erratic marketplace,” Baker said in a statement. All of the regions of the country and all industry sectors remained in negative territory with the overall index barely budging from May’s 45.8, with June registering at 45.9 (any score below 50 reflects a decrease). The West continued with its drawn out doldrums, slumping further from 47.6 to 44.3.  The Northeast’s 48.6 slipped to 46.4, while the Midwest moved from 46.8 to 48.0, and the South went from 46.1 to 47.6. The sector breakdown didn’t look much better. The commercial sector fell from 50.7 to 46.9, institutional went from 45.6 to 46.0, mixed practice went from 41.5 to 45.9, and multi-family residential went from 48.9 to 49.0. The constant silver lining remains the project inquiries index, which lifted up a smidge from 54.0 to 54.4.
Placeholder Alt Text

Billings Bucks Upward Trend

For the past five months things were looking up for the Architecture Billings Index. Until now. Granted, the index was merely teetering on the positive side of the spectrum at 50.4 for March (any score above 50 reflects an increase), so it didn’t have far to drop into the negative territory of 48.4 for April. Despite the five-month positive stint, throughout the period AIA Chief Economist, Kermit Baker urged cautious optimism in what has clearly been a tepid recovery. In a statement released today, he said that the decline in demand for design services is not surprising considering continued volatility in the overall economy. “Favorable conditions during the winter months may have accelerated design billings, producing a pause in projects that have moved ahead faster than expected,” he said. The regional breakdown took the Northeast to the top of the heap with a score of 51.0, down from last months 53.9. Likewise, the Midwest stayed positive at 50.1, but not quite as strong as the previous month’s 54.1. The South dropped into negative territory at 49.0, down from a positive stance at 50.1. Meanwhile, the ever-sluggish West stayed negative at 48.0, not a much of a shift from last month’s 46.6. In the sector breakdown, the commercial/industrial sector, as usual, took the lead with a positive showing of 53.8, a shift from March’s 56.0. Multi-family residential hovered around the edge at 50.5, not far from last month’s 51.9. Institutional stayed negative at 46.6, a slight change from 47.6. Mixed practice also remained low at 45.0, down from 47.2. The new projects inquiry index checked in at 54.4, down from a mark of 56.6 in March.