ABI Encounters Minor Setback in January
Market Remains Fundamentally Strong
Architecture firms reported that their billings were essentially flat to start off 2017, as the Architecture Billings Index (ABI) dropped into negative territory in January, the first monthly decline since September of last year.
The American Institute of Architects (AIA), the association that monitors the ABI, said the index was at 49.5, down from 55.6 in December.
Kermit Baker, chief economist for the AIA, said: "This small decrease in activity, taking into consideration strong readings in project inquiries and new design contracts, isn't exactly a cause for concern. The fundamentals of a sound nonresidential design and construction market persist."
The AIA's new projects inquiry index was at 60.0, up from a reading of 57.6 the previous month, and its design contracts index was at 52.1. Both indices show there is "still plenty of new work in the pipeline," Baker said. "The future looks more positive overall."
Each ABI provides an approximate nine to twelve month glimpse into the future of nonresidential construction spending activity. Participating architecture firms are asked whether their billings increased, decreased or stayed the same, and the results are compiled into the ABI, which is seasonally adjusted. ABI scores are centered on 50: numbers above 50 indicate an aggregate increase in billings, and scores below 50 point to a decline.
Regional ABIs are formulated using a three-month moving average: South, 54.2; Northeast, 53.0; Midwest, 52.4; and West, 48.8. With the exception of firms in the West, business conditions improved at architecture firms in all regions of the country in January, the AIA noted.