The American Institute of Architects monthly Architecture Billings Index came in at 49.3 in January, a 0.9-point rise from December’s revised score of 48.4. The ABI is a leading economic indicator of construction activity in the U.S. and reflects a nine- to 12-month lead time between architecture billings and construction spending nationally, regionally, and by project type. A score above 50 represents an increase in billings from the previous month, while a score below 50 represents a contraction. Each January, AIA revises recent ABI values based on applicable seasonal factors.
“The billings index is just another data set in the broader economy that makes understanding trends difficult,” says Ali Wolf, the chief economist of ARCHITECT’s parent company, Zonda. “The overall index is still in contractionary territory but there’s notable strength in inquiries into new projects. We will be watching how the next few months look to see whether these improvements hold or shift down again.”
The scores for both project inquiries and design contracts eased in January. New project inquiries came in at 55.2, rising 2.6 points from December’s revised score of 52.6. Design contracts also strengthened this month with a score of 53.4, up 3.4 points from December’s revised score of 50.0.
“While the downturn in design activity extended to four months in January, there are signs of easing,” said AIA chief economist, Kermit Baker, Hon. AIA, in a press release from the organization. “In particular, architecture firms reported that new project work has begun to increase, signifying that this decline in billings may reverse in coming months.”
The month-to-month changes in scores for regional billings—which, unlike the national score, are calculated as three-month moving averages—largely remained above 50.0 in January. Billings in the Midwest increased 2.2 points to a score of 51.6, while billings in the West rose 5.8 points to a score of 51.3. Billings in the South fell 1.7 points to a score of 46.9, and billings in the Northeast rose 4.4 points to a score of 50.9.
The scores January’s sector billings remained contracted. The commercial/industrial sector increased 1.6 points to a score of 46.8; the institutional sector increased 1.3 points to a score of 48.6. The multifamily residential score rose 1.6 points to a score of 45.9, and the mixed practice sector increased 1.2 points to a score of 56.0. Like the regional billings scores, sector billings scores are also calculated as three-month moving averages.
Read more business news: Decline Slows for December Billings | Billings Slow Again in November | Moderated September billings reflect pressures in housing market