ABI Jumps 3 Points; Returns to Positive Territory

WASHINGTON, DC—Watching the Architecture Billings Index toggle back and forth between positive and negative territory can be dizzying—but this particular month, rewarding. The leading economic indicator jumped three points and returned to positive territory in May, reaching 52.6 from 49.6 in April.

As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending, with any score above 50 indicating an increase in billings. The new projects inquiry index was 63.2, up from 59.1 the previous month.

In addition, AIA has added a new indicator measuring the trends in new design contracts at architecture firms that is meant to signal of the direction of future architecture billings. The score for design contracts in May was 52.5.

Still there is no guarantee the index won't swing back to negative territory. "Volatility continues to be the watchword in the design and construction markets, with firms in some regions of the country, and serving some sectors of the industry, reporting strong growth, while others are indicating continued weakness," according to AIA Chief Economist Kermit Baker.

That said, he continues, it does appear that activity has recovered from the winter slump, "and design professions should see more positive than negative numbers in the coming months.”

Also from the report:

• Regional averages: South (58.1), Midwest (51.3), Northeast (47.6) , West (46.9);

• Sector index breakdown: multi-family residential (58.2), commercial / industrial (53.6), mixed practice (50.4), institutional (47.3);

• Project inquiries index: 63.2;

• Design contracts index: 52.5.