Volume 50, Issue 3 - March 2015

IndustryOutlook

ABI Softens in January

Following nine months of positive billings, the Architecture Billings Index (ABI) showed no increase in design activity in January. 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 January ABI score was 49.9, down from a mark of 52.7 in December, noting the score reflects a very modest decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.7, down from a reading of 59.1 the previous month.

Jan. 2014
Jan. 2015
ABI Score
48.5
49.9
New Projects Inquiry Score
59.2
58.7

Dodge Momentum Index Falls in January

The Dodge Momentum Index fell 4.8 percent in January to 121.1 (2000=100), down from a revised 127.2 in December, 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 lead construction spending for nonresidential buildings by a full year.

During the final three months of 2014, the Momentum Index had jumped 11.7 percent, so while January’s 4.8-percent drop showed decreased activity relative to December, it was still in line with the moderate, if at times hesitant, upward trend that’s been present over the past three years.

January’s decline for the Momentum Index relative to December was the result of decreased planning activity in both the commercial and institutional sectors, according to Dodge Data &
Analytics. The institutional sector fell 10.2 percent, while the commercial sector edged down 0.4 percent.

Dodge Momentum Index (Year 2000=100)
  Dec. 2014 Jan. 2015 % Change Jan. 2014 Jan 2015
Dodge Monument Index 127.2 121.1 -4.8% 121.1 121.1
Commercial Building 134.8 134.3 -0.4% 118.6 134.3
Institutional Building 116.6 104.8 -10.2& 124.3 104.8



Nonresidential Building Dips in December

December 2014 Monthly Construction Starts
Seasonally Adjusted Annual Rate, in Millions of Dollars
  Nov. 2014 Dec. 2014 % Change
Nonresidential Building $256,867 $196,595 -23
Residential Building 239,200 247,263 +3
Nonbuilding Construction 181,571 124,293 -32
Total Construction $677,638 $568,154 -16
Year to Date Construction Starts
Unadjusted Totals, in Millions of Dollars
  12 months 2013 12 months 2014 % Change
Nonresidential Building $208,218 $177,362 +17
Residential Building 210,325 227,820 +8
Nonbuilding Construction 139,230 148,755 -6
Total Construction $575,26 $536,442 +7

Nonresidential building in December fell 23 percent to $196.6 billion, following its 32-percent increase in the previous month, according to Dodge Data & Analytics. For 2014 as a whole, nonresidential building climbed 17 percent to $208.2 billion, following an 11-percent gain in 2013.

New construction starts in December dropped 16 percent to a seasonally adjusted annual rate of $568.2 billion, following a 13-percent increase in November. Through 2014, total construction starts climbed 7 percent to $575.3 billion. December produced a Dodge Index reading of 120, compared to 143 in November. For all of 2014, the Dodge Index came in at 122.

The 7-percent gain for total construction starts at the national level in 2014 was the result of greater activity in all five major regions. Leading the way was the South Central, up 14 percent, followed by the South Atlantic, up 11 percent; the West, up 7 percent; the Northeast, up 2 percent; and the Midwest, up 1 percent.


USG
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