Paced by continued demand for projects such as new education and healthcare facilities, public safety and government buildings, the Architecture Billings Index (ABI) increased in June following fluctuations earlier this year.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lead-time between architecture billings and construction spending. The American Institute of Architects reported the June ABI score was 55.7, up substantially from a mark of 51.9 in May. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 63.4, up from a reading of 61.5 the previous month.
“The June numbers are likely showing some catch-up from slow growth earlier this year. This is the first month in 2015 that all regions are reporting positive business conditions and aside from the multifamily housing sector, all design project categories appear to be in good shape,” said AIA Chief Economist Kermit Baker. “The demand for new apartments and condominiums may have crested with index scores going down each month this year and reaching the lowest point since 2011.”
Key June ABI highlights:
• Regional averages: Midwest (57.2), South (54.9), West (50.7) Northeast (50.4).
• Sector index breakdown: institutional (59.1), mixed practice (54.7), commercial / industrial (51.6) multifamily (47.0).
• Project inquiries index: 63.4.
• Design contracts index: 52.5.