The monthly Architecture Billings Index (ABI) came in at a score of 50.7 in February, up 1.2 points from January's 49.5, 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 represents an increase in billings from the previous month, while a score below 50, as seen in January, represents a contraction.
January's reading was a disappointment following December's strong 55.6 point reading, when architecture billings soared to a nine–year high. February's rebound does not come as a surprise, as the new project inquiries index— the most reliable indicator of future billings—ticked up to a score of 60.0 in January. It is expected that architecture billings will continue to grow in March, as the new project inquiries index increased 1.5 points to a score of 61.5 in February.
“The sluggish start to the year in architecture firm billings should give way to stronger design activity as the year progresses,” said AIA chief economist Kermit Baker, Hon. AIA, in a press release. “New project inquiries have been very strong through the first two months of the year, and in February new design contracts at architecture firms posted their largest monthly gain in over two years.”
The design contract portion of the index increased 2.6 points to a score of 54.7 in February, marking the fifth consecutive month of growth.
Regional billings, which, unlike the national score, are calculated as a three-month moving average, decreased in all four regions during February. The South saw the largest contraction in February, decreasing 2.7 points to 50.5 from January's reading of 53.2. February marks the first time in 13 months that the South has not recorded the highest billings of any region, eclipsed by the Midwest. Despite a contraction of 0.5 points, the Midwest posted the strongest reading in February, 52.4. Billings also decreased marginally in the Northeast and the West with scores of 50.0 and 47.4, respectively. Despite the contraction seen in all four regions, billings stayed in positive territory in February, with a score of 50 or higher.
Architecture billings in the residential, mixed-use, and commercial/industrial sector fell below the 50–point threshold in February, posting scores of 49.3, 49.2, and 48.9, respectively. Billings also eased in the institutional sector in February, but stayed in positive territory, dipping 1.2 points to 51.8. (Results of the sectors and regions are calculated as a moving average of the past three months.)