Volume 50, Issue 9 - September 2015

IndustryOutlook

Strong Showing
for the ABI


The Architecture Billings Index (ABI) is reflecting healthy and sustained demand for design services in nearly all nonresidential project types. 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 July ABI score was 54.7, down a point from a mark of 55.7 in June. This score still reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 63.7, up slightly from a reading of 63.4 the previous month.

July 2014 July 2015
ABI Score
55.8 54.7
New Projects Inquiry Score
66.0 63.7


Dodge Index Shows Gains in July

The Dodge Momentum Index increased to 125.3 in July, up 5.4 percent from its June reading of 118.9, according to Dodge Data & Analytics. The report notes that strong gains in institutional and commercial planning helped spur the growth.

The Momentum Index is a monthly measure of the first report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

The institutional sector saw a 6.0-percent increase, followed by commercial planning at 4.9 percent. A total of 13 projects entering planning in July had a value exceeding $100 million—seven commercial and six institutional.

Dodge Momentum Index (Year 2000=100)
  June 2015 July 2015 % Change July 2014 July 2015
Dodge Momentum index 118.9 125.3 +5.4% 121.4 125.3
Commercial building 126.3 132.5 +4.9% 132.3 132.5
Institutional building 109.7 116.3 +6.0% 107.9 116.3


New Construction Down in June but Up for First Half of Year

New construction starts in June dropped 15 percent from May to a seasonally adjusted annual rate of $620.2 billion, according to Dodge Data & Analytics. Meanwhile, during the first six months of 2015, total construction starts on an unadjusted basis were reported at $336.0 billion, up 23 percent from the same period a year ago.

June’s data lowered the Dodge Index to 131, down from 154 a month before. Through the first six months of 2015, the Dodge Index averaged 144, helped by strong readings in February, April and May.

Nonresidential building, at $190.6 billion (annual rate), dipped 8 percent in June. The commercial building group fell 13 percent, following a 17-percent increase in May. Office construction in June ran counter to the other commercial categories, advancing 11 percent from the previous month.

The commercial building group held steady with its year-ago pace, aided by a 41-percent increase for hotel construction but dampened by declines for stores, down 3 percent; office buildings, down 8 percent; and warehouses, down 12 percent.

Monthly Construction Starts
Seasonally adjusted annual rates, in millions of U.S. dollars
  May 2015 June 2015 % Change
Nonresidential building $206,668 $190,586 -8
Residential building 261,527 267,124 +2
Nonbuilding construction 261,574 162,466 -38
Total construction $729,769 $620,176 -15

Year-to-date construction starts
Unadjusted totals, in millions of dollars
  6 Mos. 2014 6 Mos. 2015 % Change
Nonresidential building $99,376 $103,051 +4
Residential building 110,005 128,767 +17
Nonbuilding construction 64,311 104,133 +62
Total construction $273,692 $335,951 +23


USG
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