Volume 49, Issue 4 - April 2014

IndustryOutlook

After starting out the year on a positive note, there was another minor increase in the Architecture Billings Index (ABI) in February, according to the latest report from the American Institute of Architects (AIA). The ABI reflects the approximate nine- to 12-month lead time between architecture billings and construction spending.

The AIA reported that the February ABI score was 50.7, up slightly from a mark of 50.4 in January. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.8, down from the reading of 58.5 the previous month.

 

February 2013
February 2014
ABI Score
54.9
50.7
New-Projects Inquiry Index
64.8
58.5

 

Dodge Momentum Index Slips in February
The Dodge Momentum Index fell 2.6 percent in February compared to the previous month, according to McGraw Hill Construction, a division of McGraw Hill Financial. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

February’s decline brought the Momentum Index to 116.5 (2000=100), down from January’s revised119.7 but still nearly 20 percent above the year-earlier (February 2012) reading of 97.4, according to McGraw Hill. The construction group predicts that the latest month’s retreat is expected to be a brief pause in a broader upward trend.

The February Momentum Index saw contraction in both its main components. New plans for commercial buildings, usually the more cyclically sensitive sector, dropped 1.7 percent while institutional building fell back by 3.7 percent. On the commercial side, declines were reported across all of the major building types.



Dodge Momentum Index (Year 2000=100)
Jan. 2014 Feb. 2014 % Change Feb. 2013 Feb. 2014
Dodge Momentum Index 119.7 116.5 -2.6 102.9 116.5
Commercial Building 116.9 114.9 -1.7 101.3 114.9
Institutional Building 123.1 118.5 -3.7 104.9 118.5

Source: McGraw Hill Construction Dodge

Construction Backlog Indicator Hits Post-Recession High

The Associated Builders and Contractors’ (ABC) Construction Backlog Indicator (CBI) hit a post-recession high in the fourth quarter of 2013, growing from 8.2 months to 8.3 months (1.3 percent). Compared to a year ago, the CBI is 3.9 percent higher—up from 8 months at the end of 2012.

Construction Spending Posts Big Increase
Total construction spending in January posted the steepest year-over-year increase since 2006, with growth in public construction as well as private residential and nonresidential spending, according to an analysis of new Census Bureau data by the Associated General Contractors of America (AGC).

Construction put in place totaled $943 billion in January, 0.1 percent higher than the December total, which was revised up $12 billion from the initial estimate. The January mark was 9.3 percent higher than in January 2013.

Private Residential Construction Spending: Up 11% for January Up 15% over 12 months

Private Nonresidential Spending: Down 0.2% for January Up 9.7% over 12 months

Public Construction Spending: Down 0.8% for January Up 2.5% over 12 months


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