ABI loses some mojo in October but still expanding

It has been a while…busy semester. But here's some news worth reporting: the AIA Architectural Billing Index (ABI) for October 2014 was clocked at 53.7, down from 55.2 in September. Not particularly great news, but if you are looking at the big picture, it is still above 50. Any value greater than 50 means that architecture billings are increasing; conversely, any value less than 50 means billings are decreasing. The ABI is a leading indicator of commercial building construction by approximately nine to 12 months. Here is the geographic and sector breakdowns:

Regional (three month moving) Averages for October 2014:

• Northeast: 47.0 (down from 51.0 in September, a pretty sharp drop)
• South: 58.4 (up from 55.3 in September. The South remains strong)
• Midwest: 54.4 (versus 55.1 in September, a decline but still pretty strong)
• West: 56.1 (versus 54.2 in September, a nice second place finish to the South in terms of increase and overall strength)

So it looks like the Northeast is the drag. This is a leading indicator, so the crazy snow storm in Buffalo over the past few days is not the cause...

Sector Averages for October 2014:

• Multi-family Residential: 54.7 (versus 55.3 in September; this sector continues to exhibit strength)
• Commercial/Industrial: 52.3 (versus 50.8 in September, a nice move upward)
• Mixed Practice: 56.9 (versus 53.8 in September, also a nice move upward)
• Institutional: 54.4 (versus 54.9 in September, basically a wash)

Project inquiries were down to 62.7 (from 64.8 in September). The newer measure, Design Contracts Index (which, according to AIA highlights trends in new design contracts at architectural firms) was measured in at 56.4 in October (close to the 56.8 September figure). 


So again, the truth is in the details. Billings seems strong overall, with some weak pockets. And of course, the regional indices may not accurately represent widespread strength within those regions, but billings are expanding nonetheless over the majority of the geographic United States.