July’s ABI national overall score of 50.1 was up 1.0 point from June’s 49.1, which is slightly over the expansionary zone, (>50). U.S. architecture firms reported increasing firm billings for the month is just slightly higher than the share that reported decreasing billings. Overall, this six-month stretch is one of the longest periods of essentially flat billings since the end of the Great Recession.
The new design contracts index decreased by 1.3 points to 49.0. Regional monthly scores were South 48.3, West 51.2, Midwest 48.9 and Northeast 48.3.
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 1.4% while Design contract momentum was negative 4.6%. Regionally, one zone posted positive momentum with 5.7% in the West. Commercial/ Industrial posted positive 2.6 % momentum. Multi-family residential 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.