After a Year of Decline, Architecture Billings Index Reaches Positive Mark

A new report from the American Institute of Architects (AIA) shows that the nearly three-point bump in January carried the Architecture Billings Index (ABI) to its first positive mark since February 2020. AIA’s ABI score for February was 53.3 compared to 44.9 in January. Any score above 50 indicates an increase in billings. February 2021 also marked the first time the design contract score was recorded in the positive territory since the pandemic began, with a score of 51.6 compared to 48.8 in January. The new project inquiries score for February reached a 22-month high water mark with a score of 61.2 compared to 56.8 in January.

Dodge Momentum Index Sees Strong Gain in February

The Dodge Momentum Index rose 7.1% in February to 149.0 (the year 2000 = 100) from the revised January reading of 139.1. The institutional component of the Momentum Index jumped 26.3% during the month, while the commercial component was essentially flat.

February’s Momentum Index marked the highest levels in nearly three years as a result of a surge in large projects that entered planning. Institutional planning projects in February were concentrated in large hospitals and labs, while commercial planning projects primarily included data centers, warehouses and office projects. Compared to a year ago, the overall Momentum Index was up 9.2%; the commercial component was 15.2% higher, while the institutional component was down 3.3%.

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 nonresidential buildings by a full year.

National Construction Starts Continue to Drop in February

Total construction starts fell 2% in February, putting them at a seasonally adjusted annual rate of $797.3 billion, according to Dodge Data & Analytics’ latest Construction Starts release. While nonbuilding starts posted a solid gain, residential and nonresidential building starts declined, leading to an overall pullback in activity. The Dodge Index fell 2% in February, to 169 from January’s 171.

Nonresidential building starts fell 7% to a seasonally adjusted annual rate of $208.1 billion. Institutional starts dropped 8% during the month despite a strong pickup in healthcare, and warehouse starts also fell back during the month following a robust January. Those drops offset gains in office and hotel starts, bringing the overall commercial sector down by 8%.

For the 12 months ending February 2021, nonresidential building starts dropped 28% compared to the 12 months ending February 2020. Commercial starts declined 30%, institutional starts were down 19%, and manufacturing starts slid 58% in the 12 months ending February 2021.

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