ABI Sees Strong Start to 2019

Architecture firm billings growth strengthened in January according to a new report from the American Institute of Architects (AIA). AIA’s Architecture Billings Index (ABI) score for January was 55.3 compared to 51.0* in December.

“The government shutdown affected architecture firms but doesn’t appear to have created a slowdown in the profession,” says AIA chief economist Kermit Baker. “While AIA did hear from a few firms that were experiencing significant cash flow issues due to the shutdown, the data suggests that the majority of firms had no long-term impact.”

*Every January the AIA research department updates the seasonal factors
used to calculate the ABI, resulting in a revision of recent ABI values.

The value of new construction starts in January advanced 2 percent compared to December, reaching a seasonally adjusted annual rate of $722.5 billion, according to Dodge Data & Analytics. The slight gain followed the loss of momentum that was reported toward the end of 2018, with total construction declines of 7 percent in November and 10 percent in December.

Each of the three main construction sectors in January registered modest growth. Residential building climbed 4 percent, lifted by a rebound for multifamily housing. Nonresidential building edged up 1 percent, reflecting a stronger pace for its commercial building segment. Nonbuilding construction also edged up 1 percent.

On an unadjusted basis, total construction starts in January were $51.5 billion, down 12 percent from the same month a year ago. On a 12-month moving total basis, total construction starts for the 12 months ending January 2019 held steady with the corresponding amount for the 12 months ending January 2018.

The Dodge Momentum Index rose 4.7 percent in January to 157.7 (the year 2000 = 100) from the revised December reading of 150.6. The momentum index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for non-residential buildings by a full year. January’s increase reflected similar gains for the two components of the momentum index—institutional building, up 5.0 percent; and commercial building, up 4.6 percent.

The January increase essentially reverses December’s decline, and brings the overall momentum index back to November’s level. January’s reading is also consistent with the monthly average for the second half of 2018, and just slightly below the current expansion’s high mark set in July 2018.

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