Volume 50, Issue 6 - June 2015

IndustryOutlook

Architecture Billings Stuck in Winter Slowdown

After increasing levels of demand for 13 out of the last 15 months, the Architecture Billings Index (ABI) dropped in April for the second month this year. 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 April ABI score was 48.8, a sharp drop from 51.7 in March. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 60.1, up from a reading of 58.2 the previous month.

April 2014
April 2015
ABI Score
49.6
48.8
New Projects Inquiry Score
59.1
60.1

Dodge Momentum Index Increases in April 

The Dodge Momentum Index rose 0.8 percent in April to 122.6 (2000=100) from March’s 121.6, 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. April’s slight rise shows planning activity beginning to edge up once again after retreating 2.5 percent in March. Although the planning statistics essentially plateaued in early 2015, the level of activity continues to be higher than a year ago, enabling the latest month’s Momentum Index to be up 8.5 percent compared to April 2014. With the commercial sector still helped by improving occupancies and rents, while the institutional sector is benefitting from the passage of recent bond measures, it’s expected that the Momentum Index will see a more sustained upward trend as 2015 progresses, according to the release.

Dodge Momentum Index (Year 2000=100)
  March 2015 April 2015 % Change April 2014 April 2015
Dodge Monument Index 121.6 122.6 +0.8% 123.0 122.6
Commercial Building 133.3 134.0 +0.5% 126.4 134.0
Institutional Building 107.2 108.5 +1.2% 118.7 108.5
Source: Dodge Data & Analytics


New Construction Starts Drop 13 Percent in March

New construction starts in March dropped 13 percent from the previous month to a seasonally adjusted annual rate of $633.3 billion, according to Dodge Data & Analytics. The decline followed strong gains in January (up 9 percent) and February (up 17 percent), according to the latest Dodge Data & Analytics report.

By major sector, March showed diminished activity for nonresidential building and nonbuilding construction, while residential building held steady. For the first three months of 2015, total construction starts on an unadjusted basis were up 28 percent from the same period a year ago. If projects in excess of $1 billion are excluded, the result for total construction starts would be a 4-percent gain in March on a seasonally adjusted basis relative to February, and an 11-percent gain for the first three months of 2015 on an unadjusted basis relative to the same period a year ago, according to the report.

March data produced a 134 reading for the Dodge Index (2000=100).

Monthly Construction Starts
Seasonally Adjusted Annual Rates, In Millions of Dollars
  Feb. 2015 Mar. 2015 % Change
Nonresidential Building $225,212 $183,495 -19
Residential Building 252,289 251,371 0
Nonbuilding Construction 253,180 198,465 -22
Total Construction $730,681 $633,331 -13


Year-to-Date Construction Starts
Unadjusted Totals, In Millions of Dollars
  3 Mos. 2014 3 Mos. 2015 % Change
Nonresidential Building $36,903 $40,497 +10
Residential Building 47,928 53,912 +12
Nonbuilding Construction 30,221 52,646 +74
Total Construction $115,052 $147,055 +28
Source:Dodge Data & Analytics

USG
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