Demand for Design Services Accelerates

The American Institute of Architects (AIA) reported demand for design services in March rose sharply from February. AIA’s Architecture Billings Index (ABI) score for March was 58.0, up from February’s score of 51.3. Any score above 50 indicates an increase in billings. During March, scoring for both new project inquiries and design contracts expanded, posting scores of 63.9 and 60.5, respectively.

A sector index breakdown shows increases across the board. Mixed practice led with 58.2. Multi-family residential wasn’t far behind, with 57.2. Commercial/industrial is solidly positive with 55.3 and institutional stayed this side of positive with 50.5.

The regional and sector categories are calculated as a three-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

Dodge Momentum Index Increases in March

The Dodge Momentum Index moved 4% higher in March to 166.9 (2000=100), up from the revised February reading of 160.3. 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. In March, the commercial component of the Momentum Index rose 7%, while the institutional component fell by less than one percent.

Commercial planning in March was just slightly lower than the all-time high set in October 2021. However, commercial planning has been much more volatile than institutional planning due to the presence, or absence, of large projects month-to-month. The institutional component has also been trending upward but remains 25% below the record set in December 2007. Compared to March 2021, the overall Momentum Index was 17% higher in March 2022.

March Sees Decline in Construction Starts

The Dodge Construction Network reported that total construction starts fell 12% in March to a seasonally adjusted annual rate of $903.8 billion. Non-residential building starts dropped 29%, according to the report, indicating it was in part due to the start of three large manufacturing facilities in the prior month. Removing those three large projects from the equation, nonresidential starts in March would have risen 10%. Residential starts also fell 3%.

Total construction was 9% higher in the first three months of 2022 than in the same period of 2021. Non-residential building starts rose 26% and residential starts gained 3%. For the 12 months ending March 2022, total construction starts were 15% above the 12 months ending March 2021. Nonresidential starts were 25% higher and residential starts gained 15%.

To view the laid-in version of this article in our digital edition, CLICK HERE.