Following a strong close to 2015, the AIA’s monthly Architecture Billings Index (ABI) dipped back into negative territory for January with a score of 49.6. The ABI is a leading economic indicator of construction activity in the U.S. that reflects the nine- to 12-month lead time between architecture billings and construction spending nationally and regionally as well as by project type. Marks above 50 indicate growth in billings for the period while those below reflect a contraction. Among the regions, the West, Northeast, and South came in just above the divide at 50.8, 50.4, and 50.3, respectively, for the month of January, while the Midwest came in below at 48.9.
Additionally, project inquiries nationwide came in at 55.3 for January, down from 60.5 in December 2015, while design contracts dipped to 50.9 from 52.2 for the same period.
In a press release today, AIA chief economist Kermit Baker cited falling oil prices, global economic uncertainty, and plummeting stock market valuations worldwide for the sluggish start to 2016. However, the commercial design and construction market is “mostly sound,” he said, and multifamily residential is rebounding from a slow 2015.
January’s slight contraction follows other reports on the architecture and construction sector for the month. Last week, the AIA’s semi-annual Consensus Construction Forecast projected a continued climb in spending on nonresidential projects in 2016 with a slight slowdown in 2017, while the monthly reports from payroll processing company ADP and partner Moody’s Analytics (here) and the Bureau of Labor Statistics (here) started the year by slowing down from 2015's strong close and each forecast an increase in hiring for 2016, with the strongest gains in businesses with fewer than 500 employees. The ABI also showed strength, particularly in the West, Northwest, and South, as well as in the multifamily residential and commercial/industrial sectors.