Following nine consecutive months of growth, the Architecture Billings Index (ABI) shows that the market for design services contracted to kick off 2015, following an upward turn in the index in December. The January ABI score was 49.9, down from December’s mark of 52.6, upwardly revised this month from the original report of 52.2 last month. Any score above 50 indicates an increase in billings, whereas a mark below 50 means contraction.
Though the national billings index indicates a modest decrease in demand for design services, the category that tracks design contracts rose from December's 50.2 to 51.3 in January, possibly pointing to the market again returning to growth in upcoming months. The new projects inquiry index was 58.7, down slightly from December’s 59.1.
“This easing in demand for design services is a bit of a surprise given the overall strength of the market over the past nine months,” said AIA chief economist Kermit Baker, Hon. AIA, in the Institute's press release. “Likely some of this can be attributed to severe weather conditions in January. We will have a better sense if there is a reason for more serious concern over the next couple of months.”
Here are the national and sector breakdowns for the January ABI report.
National Billings: January’s score of 49.9 is 2.8 points below December’s 52.7 and represents the first monthly contraction since March 2014.
Project inquiries: The lowest score since March 2014, January’s 58.7 fell from December’s 59.1. The score for this category has now declined for four consecutive months.
Design Contracts: Last month, this category took an upward turn, rising from 50.2 in December to 51.3 in January.
Northeast: The Northeast region is in its fifth
consecutive month of contraction, with January's 46.0 falling just below
that of December’s 46.4.
Midwest: Last month, the Midwest was the only region to experience an increased score, from December (50.4) to January (50.8).
South: Now in its second year of consistent monthly growth, the South received the highest regional score last month, although January’s 54.8 falls slightly under December’s 55.7.
West: This region dipped into the red for the first time since May 2014, January’s score slipping to 49.3 from December’s 50.2.
Multifamily Residential: This sector, which has experienced consistent growth for more than three years, fell from 53.5 in December to 51.4 in January.
Commercial/Industrial: The values in this sector dropped a marginal amount, from 51.1 in December to 50.9 in January.
Institutional: January’s 53.0 rose one point from December, and this sector is the only one to experience an increased score in this report.
Mixed Practice: For the third straight month, this, once again, is the only sector to contract. January’s score of 46.9 is slightly below that of December (47.8).
Charts: Maggie Goldstone
Source: AIA Architecture Billings Index