After slipping below 50 in November, the Architecture Billings Index (ABI) finished out the year back in positive territory with a score of 50.9 for December. This past year was definitely up and down for design demand often with decreases in demand coming on the heels of consecutive months of strong score. The average ABI score for 2015 was 51.6, which was slightly lower than 2014’s average of 62.2 which was one of the strongest years in recent history. Based on the scores from last year we should see healthy growth in construction in 2016. The ABI acts as a barometer for future nonresidential construction spending and is a leading indicator of future construction activity with the average lead time between billings and construction spending is around nine months to a year.
The new project inquiry index continued its rise in December going from 58.6 in November to 60.2. The design contracts index stayed above 50 with a score of 51.0 which was down 2 ½ points from November’s score of 53.5.
For the regional averages, the West and the South remained strong despite both dropping a bit from the previous three-month average. The West slid down from 54.5 to 53.7 and the South dropped from 55.4 in November to 53.3 in December. The Midwest and the Northeast continued to be the trouble spots in December. The Midwest average dropped from 47.8 to 46.1 and the Northeast moved up half a point from 46.2 to 46.7.
Looking at the three-month averages for sectors, Institutional was the only area with an increase, going from 51.5 to 52.2. Commercial/Industrial and Mixed Practice both took a big nosedive in December with both dropping well below 50. Commercial/Industrial went from 55.1 to 47.3 and Mixed Practice dropped from 54.9 to 46.5. Multi-family Residential stayed above 50 but saw a decrease from 53.8 to 52.9.