Demand for design services in all major construction sectors continues to grow, according to the latest Architecture Billings Index (ABI) released by the AIA today. The October ABI score was 53.1, slipping marginally from a mark of 53.7 in September, yet up from August’s value of 49.1. The project inquiries index also decreased 2.5 points but remains firmly in positive territory at 58.5. The design contracts index followed the trend of the nation-wide measurements and dipped from 53.2 in September to 51.7 in October. Scores above 50 indicate growth in billings, whereas those below 50 reflect a contraction.
"Allowing for the possibility of occasional and minor backsliding, we expect healthy business conditions for the design and construction industry to persist moving into next year," said AIA chief economist Kermit Baker, Hon. AIA, said in a press release.
In a press conference earlier this month, Baker joined economists from the Associated Builders and Contractors (ABC) and the National Association of Home Builders (NAHB) to discuss predictions for the construction industry's growth in 2016. The economists expect the markets for single-family and multifamily housing, home improvements, and commercial and industrial construction to gain momentum going into next year.
"The construction industry has benefited from increased stability" in federal budgeting and monetary policy, but "a lack of appropriately skilled labor will remain a challenge for contractors," ABC chief economist Anirban Basu noted in the press conference, echoing concerns Baker raised in the September ABI report.
Below are the national, regional, and sector breakdowns for the October ABI report.
National Billings: At 53.1, this nation-wide measurement is up from this year's monthly average of 51.9.
Project Inquiries: This index indicated a 2.5-point drop from 61 in September to 58.5 in October.
Design Contracts: Dropping to 51.7 from 53.2 the previous month, the October value is about one point under this year's monthly average.
Northeast: The region’s business
conditions continue a four-month streak of contracting figures. The October value of 49.2 is up from 46 in September.
Midwest: October’s score of 52.6 is marginally below that of September (52.8) and marks seven months in positive territory.
South: The South, which has remained in positive territory for more than three years, received the highest regional score in today’s report. October’s value of 56.2 is an increase from September's value of 54.8.
West: In positive territory since March, the West also experienced a boost. Its October score was 54.4, about two points above September's value of 52.3.
Residential: Following a seven-month streak of contractions, the sector's index is in its second consecutive month of growth. October's score of 52.5 is an increase from September's value of 51.2.
Commercial/Industrial: This sector's index jumped up more than three points from September (52) to October (55.1).
Institutional: The sector flatlined from September to October, remaining at 51.4.
Mixed Practice: The mixed practice category saw a jump in demand. Its October score of 54.9 is two points above that of September.
Source: AIA Architecture Billings Index