Industry Outlook

July Architecture Firm Billings Remain Positive Despite Growth Slowing

Architecture firm billings growth slowed again in July but remained positive overall for the tenth consecutive month, according to a new report from the American Institute of Architects (AIA).

AlA’s Architecture Billings Index (ABI) score for July was 50.7 compared to 51.3 in June. Any score over 50 represents billings growth. While JuIy’s ABI shows that aggregate demand for architecture firm services continues to increase, much of that growth came from one region: the South.

Dodge Momentum Index Increases in July

The Dodge Momentum Index moved 1.4-percent higher in July to 169.8 (the year 2000= 100) from the revised June reading of 167.3. The momentum index is a monthly measure of the first report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

In July, the commercial component of the momentum index grew by 3.3 percent. while the institutional component fell 1.5 percent.

New Construction Starts Slide 9 Percent in July

At a seasonally adjusted annual rate of $817.4 billion, new construction starts in July fell 9 percent from the elevated pace reported in June, according to Dodge Data & Analytics. The latest month’s decline followed strong gains for total construction starts during the previous two months, with May up 14 percent and June up 11 percent.

By major sector, nonresidential building dropped 22 percent after soaring 59 percent in June, which had been lifted by the start of two massive manufacturing plants and two massive office buildings. While July did see several large manufacturing and office projects reach groundbreaking, they were not the same magnitude as what took place in June.

The other two major sectors in July held close to their June amounts, with residential building up 2 percent and nonbuilding construction unchanged. During the first seven months of 2018, total construction starts on an unadjusted basis were $471.4 billion, up 2 percent from the same period a year ago. If the volatile electric utility/gas plant category is excluded, total construction starts during the January-July period of 2018 would be up 5 percent compared to last year.

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