Architecture Billings Index Hits 8-Year High In June

In June, the Architecture Billings Index (ABI) recorded its highest score, 55.7, in eight years to end the first half of an up and down year on a huge upswing. Prior to this, May’s score of 51.9 had been the highest score for 2015 after seeing drops in both January and April where the ABI score fell below 50. (All scores above 50 indicate an increase in billings.) June’s big increase in design services coupled with recent construction spending and employment numbers are all pointing to a strong finish to the year for the commercial construction industry.

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Both the design contracts index and new projects inquiry index continued to show increases. The project inquiries index was up to 63.4 in June over May’s 61.5. The design contracts index didn’t see as much of an increase with a score of 52.5 in June following May’s score of 53.4, but any score over 50 does indicate an increase.

Taking a look at the three-month regional averages, we finally had all regions with scores above 50. The Midwest (57.2) and the Northeast (50.4) both saw the biggest increases in June over their May scores of 52.3 and 45.2, respectively. The South (54.9), which usually leads all regions, had the second highest score in June and the West (50.7) took a small step forward to get above the 50 mark over last month’s 49.9.

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With the exception of Multi-family Residential (47.0), all sectors were above 50 for June. This was led by big demand for Institutional (59.1) and Mixed Practice (54.7) design services. Commercial/Industrial (51.6) saw an increase after two consecutive months of decline.

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The ABI is an early indicator of future construction activity since construction spending typically follows architectural billings by nine to twelve months.

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