Architecture Billings Sees Slight Decrease In August

After two strong months of increases in design services, the Architecture Billings Index (ABI) for August took a small step backwards, dropping to a score of 49.1 after seeing its two highest months in June (55.7) and July (54.7). (Scores above 50 indicate an increase in billings and scores below 50 indicate a decrease.) This is only the third time this year we’ve seen a decrease in design services, but we are talking about major decreases in billings. In January the score was 49.9 and in April it was 48.8, nothing to be concerned about based on the growth we’ve seen the rest of the year. The ABI acts as a barometer for future nonresidential construction spending since the lead time between billings and construction spending is between nine and twelve months.

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The scores for the design contracts index and the new projects inquiry index both showed growth. The new project inquiries index was at 61.8 for August and the design contracts index increased from 54.5 in July to 55.3.

The three-month regional averages for all regions had increases with the exception of the Northeast. After two consecutive months above 50, the Northeast dropped down to 46.8. The Midwest led all regions with a score of 56.1 followed by the South at 53.8 and the West at 50.2.

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Looking at the sector index breakdown, Multi-family Residential (49.5) and Commercial/Industrial (49.7) were both hovering just below the 50 mark. The Institutional and Mixed Practice sectors remained in growth mode with scores of 53.7 and 52.8, respectively.

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After the stellar months that architectures billings saw in June and July, it’s not all that surprising to see a slight dip like we did this month. As a whole, the construction industry is doing well and construction spending has been robust this year so a hiccup here and there is no cause for alarm.

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