October’s ABI national overall score of 52.0 was up 2.3 points from September’s 49.7, which is slightly over the expansionary zone, (>50). U.S. architecture firms specializing in commercial and industrial facilities likewise reported a drop in design activity in October, coming on the heels of a significant upturn in September. Firms concentrating in the multifamily either residential or institutional sector reported some modest gains in Ocotober.
The new design contracts index decreased by 1.5 points to 52.9. Regional monthly scores were South 55.5, West 51.3, Midwest 49.9 and Northeast 47.2.
The Architecture Billings Index (ABI), is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The results are seasonally adjusted to allow for comparison to prior months. Scores above 50 indicate an aggregate increase in billings, and scores below 50 indicating a decline.
Figure 1 lists the overall ABI and all of its sub-indexes. It presents and compares monthly and 3MMA data, showing percentage point change on both three and 12-month basis, as well as momentum. Green denotes positive change, while red indicates negative growth. National momentum, (3 month y/y subtract 12 month y/y) was negative 1.1% while Design contract momentum was positive 1.1%. Regionally, two zones posted positive momentum ranging from 1.6% in the South to 5.1% in the West. Multi-family residential recorded a positive momentum, Commercial / Industrial and Institutional all recorded negative momentum.
At Gerdau we follow the ABI because it is a leading indicator of non-residential construction activity with an approximate 12 month lead-time to ground-breaking. The ABI has a proven track record and as such it is useful for business planning purposes.