The monthly Architecture Billings Index (ABI) came in at a score of 55.0 in November, up 3.3 points from October's score of 51.7, the AIA announced today.
The ABI is a leading economic indicator of construction activity in the U.S., and reflects a nine- to 12-month lead time between architecture billings and construction spending nationally, and regionally, as well as by project type. A score above 50, as seen this month, represents an increase in billings from the previous month, while a score below 50 represents a contraction.
Demand for design services picked up in November, with national billings reaching a score of 55.0. This reading marks the highest demand seen in 2017, and is a dramatic turnaround from September's report when the index posted its first decline in seven months. New project inquiries—considered to be the most reliable indicator of future billings—increased 0.9 points in November to a score of 61.1, indicating that billings will likely continue to rise in December.
“Not only are design billings overall seeing their strongest growth of the year, the strength is reflected in all major regions and construction sectors,” said AIA chief economist Kermit Baker, Hon. AIA, in a press release. “The construction industry continues to show surprising momentum heading into 2018.”
Design contracts remained relatively unchanged in November, with a score of 53.2—a 0.4-point increase from October's score of 52.8. This portion of the index has has fluctuated less than one point for the past three months, but design contracts have stayed above the 50-point threshold every month in 2017—a sign that momentum is strong in the market, despite minute fluctuations in pace month-to-month.
Regional billings, which, unlike the national score, are calculated as a three-month moving average, increased in three of four regions in November. The Northeast was the only region to post a lower score than a month prior, dropping 1.2 points from October's score of 54.0, to a score of 52.8. However, all four regions posted a score above 50, indicating design services increased in each region compared to a month prior. Design services accelerated most significantly in the West, with a score of 54.8—a 3.1-point increase from its score of 51.7 in October. The South (52.8) and Midwest (50.4) reported marginal gains in November, with a 0.9- and 0.4-point increase in design services from a month prior, respectively.
All four building sectors experienced increased demand for design services in November. Additionally, all sectors posted scores above 50, marking the 10th consecutive month of growth. Demand for residential design services was strongest in November, with a score of 53.9—a 1.5-point increase from October's score of 52.4. However, the pace of design activity increased most month-to-month in the mixed use sector, jumping 2.3 points from a score of 51.3 in October, to 53.6 in November. Demand in the commercial/industrial sector (53.3) and institutional sector (52.4) picked up pace slightly in November, reporting an 0.9- and 0.5-point increase in billings, respectively. (Results of sectors are also calculated as a three-month moving average.)