Reflecting the strongest growth since November 2007, the January Architecture Billings Index (ABI) surged to a score of 54.2 – a sharp and welcomed increase from December’s 51.2* mark. Released by the American Institute of Architects (AIA), the ABI is a leading economic indicator of construction activity that reflects the approximate nine to twelve month lag time between architecture billings and construction spending. By remaining above 50, January’s score illustrates the six consecutive month of growth for the United State’s design and construction industry. This trend doesn’t seem to be going away any time soon, as the new projects inquiry index accelerated beyond last month’s reading of 57.9 and reached a score of 63.2.
“We have been pointing in this direction for the last several months, but this is the strongest indication that there will be an upturn in construction activity in the coming months,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “But as we continue to hear about overall improving economic conditions and that there are more inquiries for new design projects in the marketplace, a continued reservation by lending institutions to supply financing for construction projects is preventing a more widespread recovery in the industry.”
Review the ABI Highlights in greater detail, after the break… National Highlights:
- Billings: 54.2, the highest billings score since November 2007 and the sixth straight month of growth.
- Inquiries: 63.2, the highest score for project inquiries since July 2007. Inquiries have now been over 50 each month for 48 consecutive months.
- Northeast: 50.3, down slightly from December, but is the fifth straight month above 50.
- Midwest: 54.5, the highest score since March 2006 and the fourth straight month above 50.
- South: 51.7, up from December and the seventh straight month above 50.
- West: 53.4, the highest since August 2007 and the sixth straight month above 50.
- Multifamily Residential: 54.5, the ninth straight month above 50, and the sector has been above 50 for 15 of the past 16 months. Multifamily has consistently been the most productive sector for the past few years.
- Mixed Practice: 54.9, the highest score since November 2007 and the fifth straight month above 50.
- Commercial: 52.0, the fourth straight month above 50.
- Institutional: 50.2, the sixth straight month above 50.
The regional and sector categories are calculated as a 3-month moving average, whereas the index and inquiries are monthly numbers.
*Please note that every January the AIA research department updates the seasonal factors used to calculate the ABI, resulting in a revision of recent ABI values.