As has been the case a few times this year, the Architecture Billings Index (ABI) dipped in November.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the November ABI score was 49.3, down from the mark of 53.1 in the previous month. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.6, up just a nudge from a reading of 58.5 the previous month.
“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,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “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.”
Key November ABI highlights:
- Regional averages: South (55.4), West (54.5), Midwest (47.8), Northeast (46.2)
- Sector index breakdown: multi-family residential (53.8), institutional (51.4), commercial / industrial (55.1), mixed practice (54.9)
- Project inquiries index: 58.6
- Design contracts index: 53.5
The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.