ABI Sees Continued Growth in February

Demand for design services in February grew slightly over January, according to a new report from the American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for February was 51.3, up from a score of 51.0 in January. Any score above 50 indicates an increase in billings. Firms reported both project inquiries and design contracts remained positive in February, but while project inquiries increased to 62.5 from 61.9 in January, design contracts decreased to 55.2 from 56.1.

Dodge Momentum Index Recovers in February

The Dodge Momentum Index increased 4% in February to 158.2 (2000=100), from the revised January reading of 151.9. The Momentum Index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

The Dodge Momentum Index rebounded from three consecutive monthly declines that followed a 14-year high in October 2021. Much of February’s gain was due to a sizeable jump in the institutional component as more education and healthcare projects entered planning. Commercial planning remained solid thanks to office and warehouse projects. Compared to February 2021, the overall Momentum Index was 11% higher in February 2022. The institutional component was up 37%, while the commercial component was down 1% on a year-over-year basis.

February’s increase suggests that the construction sector continues to weather the storm of higher material prices and labor scarcity and is looking past the pandemic’s unique issues for projects such as schools and offices.

Total Construction Starts Increase in February

Total construction starts rose 9% in February to a seasonally-adjusted annual rate of $1.013 trillion, according to Dodge Construction Network. Due to the start of three large manufacturing facilities, nonresidential building starts swelled 32%. By contrast, residential starts fell 3%, and nonbuilding starts fell by less than 1%. Without the three large manufacturing projects, total construction would have declined 6% in February.

Year-to-date, total construction was 14% higher in the first two months of 2022 than in the same period of 2021. Nonresidential building starts jumped 39%, and residential starts gained 5%. For the 12 months ending February 2022, total construction starts were 16% above the 12 months ending February 2021. Nonresidential starts were 23% higher and residential starts gained 19%.

Nonresidential building starts jumped 32% in February to a seasonally-adjusted annual rate of $385.6 billion. In February, commercial starts fell 8%, and institutional starts lost 22%.

For the 12 months ending February 2022, nonresidential building starts were 23% higher than in the 12 months ending February 2021. Commercial starts were up 17%, institutional starts rose 12% and manufacturing starts advanced 143% on a 12-month rolling sum basis.

In February, residential building starts fell 3% to a seasonally-adjusted annual rate of $429 billion. Single-family starts lost 4%, but multifamily starts increased 2%.

For the 12 months ending February 2022, residential starts improved 19% from the 12 months ending February 2021. Single-family starts were 14% higher, while multifamily starts were  31% stronger on a 12-month rolling sum basis.

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