This isn’t fake news, the Architecture Billings Index (ABI) has dipped, and no, Jimmy Kimmel isn’t here to rectify the mistake. The bad start to the year comes off the back of what had been a positive end to 2016 for the ABI. In January, the AIA reported an ABI a score of 49.5, a contrast to December’s 55.6.
BILLINGS BY REGION: NORTHEAST (ORANGE), MIDWEST (BLUE), SOUTH (RED), WEST (GREEN).
Indeed, the last month of 2016’s score indicated the largest increase in design services for that year, but perhaps it is an unjust comparison to make. The previous two January scores were slightly negative and came after positive December scores. Last year, the ABI score for January was 49.6 but the following six months were all positive scores. So perhaps we shouldn’t be too worried, yet.
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.
BILLINGS BY SECTOR: RESIDENTIAL (ORANGE), COMMERCIAL/INDUSTRIAL (BLUE), INSTITUTIONAL (RED), MIXED-USE (GREEN).
“This small decrease in activity, taking into consideration strong readings in project inquiries and new design contracts, isn’t exactly a cause for concern,” said AIA Chief Economist Kermit Baker in a press release. “The fundamentals of a sound nonresidential design and construction market persist.”
Key January ABI highlights:
- Regional averages: South (54.2), Northeast (53.0), Midwest (52.4), West (48.8)
- Sector index breakdown: institutional (54.6), commercial / industrial (53.4), mixed practice (48.1), multi-family residential (48.1)
- Project inquiries index: 60.0
- Design contracts index: 52.1