Architecture Billings Index Bounces Back in October
Following consecutive months of shrinking demand for design services, the Architecture Billings Index (ABI) saw a slight increase in October with a score of 50.8. (Scores above 50 indicate an increase in billings and scores below 50 indicate a decrease.) The ABI acts as a barometer for future nonresidential construction spending and activity with the average lead time between billings and construction spending typically running around nine months to a year.
While the increase in design services was small, it was still good to see after scores of 49.7 and 48.4 in August and September, respectively. The last time the ABI posted two consecutive months of contracting demand was back in the summer of 2012.
The new projects inquiry index for October was 55.4, a significant drop from the 59.4 in September. The design contracts index for October fared even worse, dropping from 51.4 in September to 48.7.
The three-month rolling averages were all in negative territory in October with the exception of the South which rose slightly from 53.4 to 53.7. The Midwest dropped from 50.1 to 46.8 and the West inched up from 49.5 to 49.7. The Northeast, which had fallen to a score of 44.0, saw some improvement, climbing to 47.3.
The only sector above 50 in October was Multi-Family Residential which rose from 48.8 in September to 51.2. All other sectors hovered just below 50 in October. Commercial/Industrial decreased from 50.4 to 49.8. Mixed Practice went down slightly from 49.8 to 49.5 and Institutional inched up from 49.0 to 49.1 in October.