The Architecture Billings Index (ABI) bounced back in February with a score of 50.4 to show an increase in design activity. This comes on the heels of a decrease in activity in January which recorded a score of 49.9. (Any score above 50 reflects an increase in design activity and scores below 50 indicate a decrease.) January’s score of 49.9 was the first time the ABI had dropped below 50 since April 2014.
We saw a similar trend last year where we saw an increase in design activity in January and February after two months of decreased activity. Those two months of increased activity to start last year were followed by two consecutive months of decreased activity. Architecture billings then saw eight consecutive months of growth to finish out the year strong. Hopefully 2015 will have a similar outcome to last year’s billings.
The three-month regional averages are similar to what we saw last month with the Midwest (50.2) and the South (52.5) both staying above the 50 mark and indicating increased design activity. The West (46.7) continues its skid with this being the second straight month the three-month average has been below 50. The Northeast (48.0) has been below 50 for several months, but is slowly inching toward the 50 mark and showing an increase in design activity.
The three-month average for the Commercial/Industrial (51.4) Institutional (52.2) sectors remained strong. Multi-family Residential (48.9) dropped below 50 for the first time in over three years. This is the third month in a row that the three-month average for Mixed Practice (45.3) design has been below 50.
The ABI is always worth keeping an eye on since it is a strong indicator of how the construction industry will perform in the months ahead. Construction activity routinely follows design activity by about 9 to 12 months, so the ABI is a precursor of things to come. Again, there’s no immediate cause for alarm as we saw some ups and downs in the ABI last year before we saw consecutive months of positive output and 2015 should be no different.