ABI Remains Positive in June After Earlier Decline

The Architecture Billings Index (ABI) remained positive again in June after the first decline in ten months in April.  As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending.  The American Institute of Architects (AIA) reported the June ABI score was 51.6, down from a mark of 52.9 in May.  This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings).  The new projects inquiry index was 62.6, up sharply from the reading of 59.1 the previous month.

W“With steady demand for design work in all major nonresidential building categories, the construction sector seems to be stabilizing,” says Dr. Kermit Baker, the AIA’s chief economist.  “Threats to a sustained recovery include construction costs and labor availability, inability to access financing for real estate projects and possible adverse effects in the coming months from sequestration and the looming federal debt ceiling debate.”

Key June ABI highlights include regional averages in the Northeast (55.6), South (54.8), West (51.2) and Midwest (48.3); sector index breakdown in commercial / industrial (54.7), multi-family residential (54.0), mixed practice (52.4) and institutional (51.8); and a project inquiries index of 62.6.

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