Volume 49, Issue 2 - February2014

IndustryOutlook

ABI Sees Consecutive Drop
Following consistently increasing demand for design services throughout most of 2013, the Architecture Billings Index (ABI) saw its first consecutive months of contraction since May and June of 2012. The ABI reflects the approximate nine to 12 month lead time between architecture billings and construction spending. The American Institute of Architects reported the December ABI score was 48.5, down from a mark of 49.8 in November. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.2, up from the reading of 57.8 the previous month.

The ABI sector index breakdown scores were: multi-family residential, 53.8; mixed practice 51.0; commercial/industrial 47.1; and institutional 44.8.

Nonresidential Construction Spending Returns to Normal
Nonresidential construction spending grew 0.6 percent on a monthly and yearly basis in November 2013, according to the January 2 release by the U.S. Census Bureau. In November, spending totaled $583.436 billion on a seasonally adjusted, annualized basis, according to information from the Associated Builders and Contractors (ABC). Commercial construction spending grew 4.5 percent in November and is up 17.4 percent on a yearly basis. Spending declined in nine nonresidential construction subsectors in November, including public safety-related construction spending, which fell 0.3 percent; amusement and recreation-related spending, which was down 0.6 percent on a monthly basis; conservation and development spending, which was down 4.7 percent for the month; lodging spending, which fell 0.2 percent; and health care-related construction spending, which was down 2.8 percent.

Dodge Momentum Index Increases in December
The Dodge Momentum Index rose 1.2 percent in December compared to the previous month, according to McGraw Hill Construction. 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.

Decemberís increase brought the index to 118.3 (2000=100), the highest reading since February 2009. Over the course of 2013, the Momentum Index showed steady improvement, with December up 32 percent compared to the same month a year ago. Despite the strong percentage growth during 2013, the index remains significantly below its December 2007 pre-recession peak of 191.3, according to the report.

Flat Glass Prices Fall
Flat glass prices fell .4 percent from November to December, according to the latest Producer Price Index report issued by the U.S. Labor Department. The decrease in prices marked the third time in four months that prices for flat glass dipped, the only exception being the 1.3 percent increase from October to November.

In other news, U.S. import prices for glass recorded no change in December, according to the U.S. Bureau of Labor Statistics, following declines of 0.9 percent in November and 0.6 percent in October.


USG
© Copyright 2014 Key Communications Inc. All rights reserved.
No reproduction of any type without expressed written permission.