After a slight dip into negative territory in January, the Architecture Billings Index (ABI) saw an increase in design services in February with a score 50.3. This should be a positive sign as we head into the warmer months of spring. Design and construction activity should start picking up over the next couple of months. The ABI works as a barometer for future nonresidential construction spending and activity with the average lead time between billings and construction spending typically being nine to twelve months.
Another positive sign is the new project inquiry index which jumped from 55.3 in January to 59.5 in February. The design contracts index also saw a bit of an uptick from 50.9 in January to 51.7 in February.
The three-month regional averages saw a bit of convergence in February. The South was the only region to stay above 50, climbing up from 50.3 to 51.1. All the other regions were close to the 50 mark, but they all declined from the previous month. The West dropped to 49.9 after being at 50.8 in January. The Northeast, which had finally managed to get above 50 in January, dropped to 49.5 and the West fell from 49.8 to 49.3 in February.
The three-month sector averages were a mixed bag in February. Multi-family Residential (53.0) and Commercial/Industrial (52.3) were both in positive territory and also increased from their previous months scores of 51.9 and 50.5, respectively. Institutional dropped again, going from 49.9 to 48.1. Mixed Practice, which had moved up to a score of 49.0 last month after a three-month average of 46.5 in December, slid back further with a score of 47.7 for February.
Last month we mentioned the fact that the January 2016 ABI score was nearly identical to the January 2015 score and both showed a decrease in design activity coming off a strong December. We are seeing nearly identical results in February 2016 as we did the previous year. In 2015, we saw billing decrease in January to 49.9 only to inch back into positive terrain in February with a score of 50.4. This year January dipped to 49.6 only to bounce back in February with a score of 50.3. We’ll have to wait and see if March’s score can continue the upward trend like it did in 2015.