Architecture Billings Continue to Grow in 2022

Architecture firms began 2022 with a slight improvement in business conditions, according to The American Institute of Architects (AIA). The AIA’s Architecture Billings Index (ABI) score for January was 51.0 (any score over 50 indicates billings growth). Inquiries into new work and the value of new design contracts both remained strong, with scores of 61.9 and 56.1, respectively.

“Architecture billings, while remaining at very healthy levels in recent months, have slowed considerably from the middle of last year,” says AIA chief economist, Kermit Baker. “This no doubt reflects delays in the construction sector caused by supply challenges for both labor and materials, as well as ongoing staffing constraints at architecture firms.”

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

Dodge Momentum Index Falls in January

The Dodge Momentum Index declined 7% in January to a four-month low of 152.9 (2000=100), from the revised December reading of 163.7. 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. Commercial planning fell 9% in January, and institutional planning slipped 1%.

The Dodge Momentum Index had a stellar 2021, rising 23% from 2020 and reaching levels not seen in nearly 14 years. However, the recent string of declines may be blamed on rising costs, logistical problems, and shortages of skilled labor. Still, even as it has decreased, the dollar value of projects in planning remains exceptionally strong, especially for education, warehouse and healthcare projects.

Total Construction Starts Up to Begin 2022

Total construction starts increased 4% in January to a seasonally adjusted annual rate of $923.4 billion, according to Dodge Construction Network. Nonresidential building starts increased 4%, while residential starts fell 1%.

Total construction was 8% higher in January 2022 than in January 2021. Nonresidential building starts were up 14% and residential starts gained 2%. For the 12 months ending January 2022, total construction starts were 13% above the 12 months ending January 2021. Nonresidential starts were 14% higher and residential starts gained 19%.

Nonresidential building starts rose 4% in January to a seasonally adjusted annual rate of $293.7 billion. The commercial sector moved 8% higher due to an increase in retail, office and warehouse starts. Institutional building starts gained 10% in healthcare, transportation and recreation starts. Manufacturing starts fell 42%.

Regionally, total construction starts in January rose in the Northeast, South Central and West, but fell in the Midwest and South Atlantic.

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