Wow, it's been a full nine months since I last wrote a post. Part of that is due to the fact that I've been super busy. When I'm super busy, that typically means the construction industry is super busy. It doesn't take a genius to recognize that the industry has been white hot in Northern California, particularly the Bay Area, for some time now. How long will the party last? How good is the construction industry in the rest of the country? Let's look at the data, particularly the American Institute of Architects Architecture Billings Index (ABI). Because it's been a while, 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.
The composite October ABI figure was 53.1, down from 53.7 in September, but still clearly above the 50 threshold. Not too shabby. Similarly, the new project inquiry index clocked in at 58.5 in October, down from 61.0 in September, a slight downturn but still strongly above 50.
Drilling down, we can look at how things are looking from a regional perspective based on the October 2015 data:
Everywhere seems to be humming along except the Northeast. I'm a little surprised because New York City is supposed to be booming right now. That is a good reminder that these regional values are just that: regional. Please don't apply them directly to cities within those regions.
Sector Averages for October 2015: