Volume 50, Issue 4 - April 2015

IndustryOutlook

Architecture Billings
Index Improves in Feb.

After its first negative score in ten months, the Architecture Billings Index (ABI) showed a nominal increase in design activity in February. The score has been positive ten out of the past 12 months. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lead time between architecture billings and construction spending.

The American Institute of Architects reported the February ABI score was 50.4, up slightly from a mark of 49.9 in January. This score reflects a minor increase in design services (any score above 50 indicates an increase in billings).

The new projects inquiry index was 56.6, down from a reading of 58.7 the previous month. The design contracts index was 50.0.
February 2014
February 2015
ABI Score
50.7
50.4
New Projects Inquiry Score
56.8
56.6


Dodge Momentum Index Rises in February

The Dodge Momentum Index increased to 126.3 (2000=100) in February, a gain of 4.3 percent from January’s 121.1, according to Dodge Data & Analytics. 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.

The Momentum Index has been exhibiting somewhat of a saw-tooth pattern of late, up in December, down in January, and now up in February, according to Dodge Data. Despite the volatility that is sometimes visible in planning data, the overall trend for the Index continues to be positive, painting the picture of a broad-based yet still moderate recovery for nonresidential building projects at the planning stage, according to the latest report.

The Index now stands 17 percent higher than one year ago.

Dodge attributes the increase for the Momentum Index in February to a rise in planning activity for both the commercial and institutional sectors. The institutional sector increased 6.0 percent, while the commercial sector rose by 3.3 percent.

Dodge Momentum Index (Year 2000=100)
  Jan. 2015 Feb. 2015 % Change Feb. 2014 Feb 2015
Dodge Monument Index 121.1 126.3 4.3% 116.5 126.3
Commercial Building 133.6 138.0 3.3% 114.9 138.0
Institutional Building 105.6 111.9 6.0% 118.5 111.9



Most States Add Construction Jobs over Past Year

Construction firms added jobs in 31 states from December to January, according to an analysis of Labor Department data by the Associated General Contractors of America. On a year-over-year basis, 43 states and the District of Columbia added jobs from January 2014 to January 2015.

Texas added more new construction jobs (49,600 jobs, 7.9 percent) between January 2014 and January 2015 than any other state, and North Dakota (13.4 percent, 4,300 jobs) added the highest percentage of new construction jobs during the past year.

Seven states shed construction jobs during the past 12 months, with Mississippi losing the highest percentage and total number of jobs (-6,600 jobs, -12.7 percent).

Thirty-one states added construction jobs between December and January. California (11,700 jobs, 1.7 percent) added the most jobs, while Arkansas (4.9 percent, 2,300 jobs) had the highest percentage increase for the month.

Nineteen states lost construction jobs for the month, while construction employment was unchanged in the District of Columbia. Louisiana (-4,100 jobs, -2.8 percent) lost the highest percentage and the most construction jobs between December and January.

Construction Employment Increases January 2014-January 2015
Texas 49,600
California 37,800
Florida 31,800
Washington 17,300
New York 16,400

CBI Dips in
2014 Final Quarter


The Construction Backlog Indicator (CBI) declined 1 percent, or 0.1 months, in the fourth quarter of 2014, according to the Associated Builders and Contractors (ABC). The backlog, however, ended the year at 8.7 months, still 4.4 percent higher than one year ago.

Sector-wise, average backlog in the commercial and institutional category was virtually unchanged over the past year, “suggesting the pace of recovery will remain moderate overall,” ABC’s report reads.

During the fourth quarter, backlog expanded for mid-sized companies with annual revenue ranging between $30 million-$100 million. These firms enjoyed approximately half a month expansion in their respective average backlogs during the fourth quarter.

Backlog for small firms (annual revenue less than $30 million) and very large firms (annual revenue greater than $100 million) declined 0.2 months and 0.5 months, respectively. Average backlog increased by nearly three months or by more than three months for all firm size categories since the fourth quarter of 2009.

Construction Materials Prices
See First Increase in Six Months


Nonresidential construction input prices rose 0.4 percent in February and were down 4.9 percent on a yearly basis, according to an Associated Builders and Contractors (ABC) analysis of the latest producer price index release.

Meanwhile, the largest monthly gain in petroleum prices in more than three years caused construction materials prices to expand 0.4 percent in February, ending a six-month streak when prices failed to rise. On a year-over-year basis, construction input prices fell 3.9 percent.

Seven of the 11 key construction inputs did not expand for the month, including prices for fabricated structural metal, which remained flat for the month and have expanded 1 percent on a year-over-year basis.

According to the Producer Price Index, flat glass prices fell 0.6 percent in February, following a slight 0.1-decrease in January and a spike of 1.8 percent in December.

The flat glass index sits at 122.4, and prices are up 1.9 percent from February 2014.

USG
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