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October ABI Score Rebounds

2016-abi-scores

 

After two consecutive months of declines in the demand for design services, October’s Architecture Billings Index (ABI*) saw a modest increase in the demand. The American Institute of Architects (AIA) reported the October ABI score was 50.8, up from 48.4 in September. The drop in the two prior months was the first time on four years that demand had been down for two months in a row.

 

Key October ABI Score highlights:

Regional averages: South (53.7), West (49.7), Northeast (47.3) Midwest (46.8)

Sector index breakdown:  multi-family residential (51.2) commercial / industrial (49.8), mixed practice (49.5), institutional (49.1)

Project inquiries index: 55.4

Design contracts index: 48.7

The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

 

AIA Chief Economist, Kermit Baker, Hon. AIA, PhD attributes the declines in August and September to uncertainty surrounding the presidential election. “Hopefully we’ll get a sense of what direction we will be headed once we get a clearer read on how the new administration’s policies might impact the overall economy as well as the construction industry.” Now that the race is over, he hopes the industry will have a more clearly defined direction as the incoming Trump administration’s potential impact on the economy and construction become more clear. However, October’s rebound cannot be entirely attributed to the presidential election, as the election results did not become final until November.

 

*The ABI (Architectural Billing Index) is an economic indicator of construction activity. The score is derived from results of a monthly survey asking AIA firms whether their billings increased, decreased or stayed the same from prior month. Anything about a score of 50 indicates an increase in billings; below a 50 indicates a decline. The score is also a predictor of construction spending with a nine to twelve-month gap between architectural spending and construction spending. ABI news is broken out on a monthly and quarterly basis.

Katie Craven
Katie Craven is Marketing, Communication and Brand Manager at Watchdog Real Estate Project Managers, a real-estate consulting firm that provides owner’s representation and project management services. More about Watchdog Real Estate Project Managers as well as additional blog posts can be found here.
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