ABI Stays Strong, but Likely to Slow

Strong demand for design services continued in July 2022, according to a report from the American Institute of Architects (AIA). The report states the July Architecture Billings Index (ABI) score was 51.0, which is down from June’s score of 53.2.

Despite the lower mark, July’s score indicates that business conditions remain stable for architecture firms. That’s because any score above 50 indicates an increase in billings from the prior month. July’s score was the 18th consecutive month that architecture firms reported increasing demand for design services.

Most of the regional averages hovered above 50 — the Northeast was the lone region to score under 50 with a score of 48.4. The South scored 53.6, the Midwest 52.2 and the West 51.7.

The sector index breakdown shows that all but institutional services (49.6) resided above 50. Multi-family residential scored 52.8, commercial/industrial scored 52.2 and mixed practice scored 52.1.

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

Momentum Index Improves in July Thanks to Nonresidential Projects

The Dodge Momentum Index (DMI) increased 2.9% to 178.7 in July thanks to an increase in data center, office and warehouse projects, says the Dodge Construction Network.

The DMI is a monthly measure for nonresidential building projects in planning. According to the Dodge Construction Network, the DMI is shown to lead construction spending for nonresidential buildings by a full year. In July, the commercial component of the Momentum Index rose 5.5%, while the institutional component fell 2.0%.

Fourteen projects in July were either planned or entered planning with a value of more than $100 million.

Construction Starts Surge in July Thanks to Mega Projects

Total construction starts surged 48% in July to a seasonally adjusted annual rate of $1.36 trillion thanks to the start of three large manufacturing plants and two LNG export facilities, the Dodge Construction Network reports. Year-to-date, total construction was 11% higher in the first seven months of 2022 compared to the same period of 2021. Nonresidential building starts rose 22% over the year, residential starts were 1% higher and non-building starts were up 16%.

Nonresidential building starts rose 79% in July to a seasonally adjusted annual rate of $530.5 billion. Additionally, institutional starts rose 28% during the month due to a solid gain for healthcare starts, while commercial starts lost 11%.

Residential building starts fell 8% in July to a seasonally adjusted annual rate of $391.9 billion. Single-family starts lost 9% and multifamily starts shrunk by 5%. Residential starts were 1% higher than than this time in 2021.

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