The Architecture Billings Index (ABI) continued to show signs of growth in the month of January, continuing a modest year-end rally into the first quarter of 2020.
The latest ABI report from the American Institute of Architects (AIA) shows that the construction industry is continuing to grow at a modest clip this year, fueling hopes that the late-stage economic expansion that has been fueling increased building activity over the last decade will continue to take shape over the coming year.
January's billings score of 52.2 represents a slight step up from January's score of 52.1, and follows similar growth shown in December (52.5), November (51.9), and October (52.0).
For January, project inquiries were slightly down relative to December, when the score was 58.7, while remaining firmly within the positive range. Design contract executions were up 2.6 points in January, however, from December's 53.4 score. These two factors indicate that more clients are inquiring about work and of those that do, a growing number are actually paying for additional design services. The fact that both the project inquiries and design contracts indexes have shown consistent growth since October indicates that firms are likely to see modest growth in coming months as inquiries become contracts and contracts lead to billings.
Regarding the latest report, AIA Chief Economist, Kermit Baker, Hon. AIA, PhD wrote in a statement, “Despite the continued presence of volatility in the economy, design activity has begun to accelerate in recent months. Even with the ongoing challenges facing the nonresidential construction sector, this upturn points to at least modest growth over the coming year.”
Editor's Note: Archinect originally reported a January ABI score of 52.6, but the figure was recently revised downwardly due to an annual reassessment the AIA research department undertakes to "update the seasonal factors used to calculate the ABI."
Speaking in terms of economic regions, growth patterns remained consistent in January with December's findings, which is to say that the South and West markets are leading national growth with the Midwest experiencing slightly less growth, and the Northeast contracting once again. This month, the South and West have swapped places, with the southern market showing the highest growth rate in the country. January's score for the Northeast sector, 45.3, is higher, however, than December's score of 44.0.
The latest survey indicates that growth in the Commercial / Industrial sector slowed down last month. In December, this sector had the highest growth level with a score of 54.0; In January, it was tied for the lowest growth rate with the Institutional sector. The Institutional market itself, however posted a slightly higher score in January (51.1) than it did in December (50.8). Multi-family residential growth remained slightly higher following a large year-end uptick in apartment construction felt around the country. Mixed practice projects scored the highest growth rate at 51.6.
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