Volume 48, Issue 11- November 2013
ABI Continued to Soar in September
Showing a steady increase in the demand for design services, the Architecture Billings Index (ABI) continued to accelerate, as it reached its second highest level of the year, according to the latest report from the American Institute of Architects (AIA). The ABI reflects the approximate nine- to 12-month lead time between architecture billings and construction spending. The September ABI score was 54.3, up from a mark of 53.8 in August, according to the AIA.
This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.6, down from 63.0 the previous month.
Construction Segment Adds 20,000 Jobs in September; Unemployment Hits Six-Year Low
Construction employment was up by 20,000 in September and the industry’s unemployment rate fell to a six-year low of 8.5 percent; construction spending increased for the fifth consecutive month in August, according to reports from the Associated General Contractors of America (AGC). Ken Simonson, the association’s chief economist, says the reports show the industry was doing relatively well prior to the government shutdown, which forced many firms to hit the pause button.
The industry’s unemployment rate dropped sharply over the past year, from 11.9 percent in September 2012 to 8.5 percent in September 2013—the lowest September rate since 2007.
Dodge Momentum Advances in September
The Dodge Momentum Index advanced 2.9 percent in September to 118.3 (2000=100) according to McGraw Hill Construction, a division of McGraw Hill Financial. After a brief pause in June 2013, the Momentum Index resumed its upward trend in the most recent three months. Since the end of 2012, the index has risen 31 percent, and in September reached its highest level since the first quarter of 2009.
The commercial component of the index jumped 8.5 percent in September thanks to increased plans for new office development.
The Momentum Index is a monthly measure of the first (or initial) report for non-residential building projects in planning, which have been shown to lead construction spending for non-residential buildings by one year.
Nonresidential Spending Inches Up
Total construction spending, as reported by the Census Bureau, climbed 0.6 percent in August from an upwardly revised July figure and 7.1 percent from August 2012. n