WASHINGTON, DC-Dashing briefly raised hopes of an uptick in construction activity, the Architecture Billings Index dropped nearly two points in October. The American Institute of Architects has reported that the October ABI score was 48.7, down from a reading of 50.4 the previous month. The new projects inquiry index was 61.7, down from a nearly three-year high mark of 62.3 in September.
The ABI is a leading economic indicator for construction activity, reflecting an approximate nine to 12 months lag time between architecture billings and construction spending. A score over 50 indicates an increase in billings. The ABI had been flirting with 50 in previous measures, AIA chief economist Kermit Baker, tells
GlobeSt.com, so this month’s score is a let down. “The index has been on a slow, tortured path,” he says. “For the entire year it has been trending up but there were false starts as well, such as in spring and September.” As for the coming months, Baker says, “We won’t have a strong, robust recovery in design activity for several more months.”
The ABI flies in the face of real estate industry metrics that point to an increase in investment and pricing. That is to be expected, Baker says, as construction and investment move in entirely separate directions. Investment may be improving, “but I haven’t seen anything that is consistently optimistic on the construction side.”
Other highlights from the October score:
Regional averages: Northeast (54.5), Midwest (51.8), South (48.6), West (44.3)
Sector index breakdown: commercial/industrial (54.5), institutional (50.8), multifamily residential (49.1), mixed-practice (43.2)
Project inquiries index: 61.7
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