Volume 50, Issue 1 - January 2015
ABI Outlook Remains Positive
Buoyed by sustained demand for apartments and condominiums, coupled with state and local governments moving ahead with delayed public projects, the Architecture Billings Index (ABI) has been positive for seven consecutive 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 (AIA) reported the November ABI score was 50.9, reflecting a slight increase in design activity (any score above 50 indicates an increase in billings), though down from a mark of 53.7 in October. The new projects inquiry index was 58.8, following a mark of 62.7 the previous month.
Dodge Momentum Hits Highest Point Since 2009
After retreating from July through September, the Dodge Momentum Index has registered gains for two consecutive months, and is now 14 percent above the same month a year ago. It is at its highest level since early 2009. The Index increased to 125.0 in November, up 0.6 percent from October, 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 November increase in the index was the result of greater planning activity in the commercial sector, which rose 4 percent for the month. The increase for the overall Index was held back, however, by a 3.8-percent drop in planning activity for the institutional sector.
Construction Starts Recede 4 Percent
The value of new construction starts settled back 4 percent in October to a seasonally adjusted annual rate of $589.8 billion, according to Dodge Data & Analytics. The decline followed the 10 percent increase reported in September, which was the strongest month for total construction starts so far in 2014. Both nonresidential building and nonbuilding construction lost momentum in October, while residential building posted a moderate gain given further growth for multifamily housing. During the first ten months of 2014, total construction starts on an unadjusted basis were $475.8 billion, up 5 percent from the same period a year ago.