The AIA announced yesterday that the June ABI score was positive for the fifth consecutive month. Increasing demand on all project types and through all sectors contribute to the consistent positive scores throughout 2016. The June ABI score was 52.6. This score was down from May, which came in at 53.1, but reflects an overall increase in demand for design services.*
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
The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.
The new projects inquiry index came in strong at 58.6. AIA Chief Economist, Kermit Baker, Hon. AIA, PHD said that the “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.”
While most results reported were positive, there is one area of concern. The value of design contracts dipped into negative territory in June for the first time in more than two years. Further tracking ABI scores will indicate if we should expect to see a sizable decrease in the value of design contracts over the coming months.
*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.
For more information on ABI scores, click here.
Related- April 2016 ABI Score