Volume 50, Issue 6 - June 2015
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.
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.
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.