For the fifth month running, the Architecture Billings Index (ABI) has stayed positive. For June, the American Institute of Architects (AIA) reported a score of 52.6, down from last month’s 53.1, though it should be noted that any score above 50 suggests an increase in billings. There was, however, “concern” over the slump in design contracts. Regionally, all areas (excepting the Midwest) continued strongly with numbers keeping on a positive trend.
BILLINGS BY SECTOR: RESIDENTIAL (ORANGE), COMMERCIAL/INDUSTRIAL (BLUE), INSTITUTIONAL (RED), MIXED-USE (GREEN).
“Demand for residential projects has surged this year, greatly exceeding the pace set in 2015. This suggests strong future growth for housing in the coming year,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “While we expect to see momentum continue for the overall design and construction industry in the months ahead, the fact that the value of design contracts dipped into negative territory in June for the first time in more than two years is something of a concern.”
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.
BILLINGS BY REGION: NORTHEAST (ORANGE), MIDWEST (BLUE), SOUTH (RED), WEST (GREEN).
Key June ABI highlights:
- Regional averages: South (55.5), West (54.1), Northeast (51.8), Midwest (48.2)
- Sector index breakdown: multi-family residential (57.9), institutional (52.7), mixed practice (51.0), commercial / industrial (50.3)
- Project inquiries index: 58.6
- Design contracts index: 49.7
Due to small sample sizes, the regional and sector categories are calculated as a 3-month moving average. On the other hand, for the national index, design contracts and inquiries are monthly figures.