Volume 50, Issue 7 - July 2015

IndustryOutlook

ABI Increases in May after Dip in April

The Architectural Billings Index (ABI) was back up in May after its second monthly drop of the year.

According to the American Institute of Architects, May’s ABI score was 51.9, up from 48.8 in April. The ABI reflects the approximate nine- to 12-month lead time between architecture billings and construction spending.

AIA attributes the increase to a growing demand for new schools, hospitals, cultural facilities and municipal buildings. The new projects inquiry index was 61.5, up from a reading of 60.1 the previous month.

“As has been the case for the past several years, while the design and construction industry has been in a recovery phase, we continue to receive mixed signals on business conditions in the marketplace,” says Dr. Kermit Baker, chief economist at AIA.
May 2014
May 2015
ABI Score
52.6
51.9
New Projects Inquiry Score
63.2
61.5


Dodge Momentum Index Unchanged in May 

The Dodge Momentum Index held steady at 122.3 (2000=100) in May, according to Dodge Data and 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.
After rising over the course of 2014, the Index has been basically flat in 2015, consistent with other measures highlighting sluggish economic conditions, according to the latest report. Even with this near-term pause, the Index in May was still up 6.1 percent compared to the same month a year ago. Several factors are expected to help the Index move beyond its current plateau later this year, including further improvement in market fundamentals for commercial real estate and the increased funding support for construction projects coming from state and local governments.

Dodge Momentum Index (Year 2000=100)
  April 2015 May 2015 % Change May 2014 May 2015
Dodge Monument Index 122.3 122.3 0.0% 125.2 122.3
Commercial Building 133.2 130.3 -2.2% 133.9 130.3
Institutional Building 108.9 112.3 +3.1% 114.4 112.3
Source: Dodge Data & Analytics


New Construction Starts Advance in April

The value of new construction starts in April increased 10 percent from March to a seasonally adjusted annual rate of $698.7 billion, according to Dodge Data & Analytics. The April statistics raised the Dodge Index to 148, compared to 134 the month before. For the full year in 2014, the Dodge Index averaged 124.

Nonresidential building in April jumped 58 percent to $288.9 billion (annual rate). The commercial building sector grew 11 percent, rebounding from a 10-percent decline in March.

Through the first four months of 2015, total construction starts on an unadjusted basis were $208.2 billion, up 24 percent from the same period a year ago.

The office building category surged 50 percent, reflecting $1 billion for the office portion of a $1.2 billion high-rise at the Hudson Yards development in New York City.

Multifamily housing in April eased back 2 percent, retreating slightly for the second straight month after a 40-percent surge in February.

Monthly Construction Starts
Seasonally Adjusted Annual Rates, In Millions of Dollars
  March 2015 April 2015 % Change
Nonresidential Building $183,269 $288,862 +58
Residential Building 253,403 245,140 -3
Nonbuilding Construction 197,553 164,744 -17
Total Construction $634,225 $698,746 +10


Year-to-Date Construction Starts
Unadjusted Totals, In Millions of Dollars
  4 Mos. 2014 4 Mos. 2015 % Change
Nonresidential Building $57,907 $64,754 +12
Residential Building 68,762 76,905 +12
Nonbuilding Construction 40,976 66,505 +62
Total Construction $167,645 $208,164 +24
Source:Dodge Data & Analytics

USG
Copyright 2015 Key Communications Inc. All rights reserved.
No reproduction of any type without expressed written permission.