AIA ABI Still Hanging ON and Design Work Accelerating

I'm about a week late with this, but the AIA Architectural Billing Index (ABI) is still moderately strong even though it's down from last month's blowout results. If this is your first time at this blog, here's some background: the ABI records architectural billings on commercial building projects. 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. Without further ado, here are the results:

Regional (three month moving) Averages for July 2014:

• Northeast: 53.0 (down from 55.5 in July but strongly above 50)
• South: 55.1 (a wash from July's figure. The South keeps trucking along)
• Midwest: 52.5 (versus 54.1 in July, a decline I'm watching because the Midwest has been weak)
• West: 51.0 (versus 53.5 in July, a strong downward move that concerns me due to where I live and my students find work)

Three out of four declined. Ouch, but not unexpected after last month's huge increases.

Sector Averages for July 2014:

• Multi-family Residential: 58.1 (versus 56.5 in July; this sector continues to lead the ABI and seems unstoppable)
• Commercial/Industrial: 50.4 (versus 51.2 in July)
• Mixed Practice: 57.1 (versus 61.0 in July, an unhealthy move downward)
• Institutional: 54.0 (versus 53.3 in July, the only moderate bright spot outside of multi-family)

Project inquiries were down to 62.6 (from an astonishing 66.0 in July). The new measure, Design Contracts Index (which, according to AIA highlights trends in new design contracts at architectural firms) clocked in at 56.9 in August (up strongly from 54.9 in July). According to Kermit Baker, AIA's chief economist, "One of the key triggers for accelerating growth at architectural firms is that long-stalled construction projects are starting to come back to life in many areas across the country." If those moth-balled projects require additional design, that could explain the increase in new design contracts among declines in many of the other data points. The declines should not induce panic. The numbers are still overall pretty good and we're above 50 across the board, so things are improving.