Architecture Billings Are a Mixed Bag, But At Least They Are Performing Better Than the Stock Market
It has been two months since I have posted regarding the American Institute of Architects' (AIA) Architectural Billings Index (ABI). In that two months, the Dow and S&P 500 are down over 9% and the NASDAQ is down over 6%, with the bulk of these drops in the form of market convulsions based on the Fed raising interest rates. Layer this on top of 40-year high inflation and the sundry labor and supply chain issues and you have a cocktail for malaise. However, over that same period of time, the ABI is actually up, albeit by less than 1%. The August ABI registered at 53.3, versus 51 in July and 53.2 in June. But up is up, so keep that in mind before the other shoe drops. Recall that measures above 50 mean billings are increasing, while those below 50 connotate a decline in billings. The ABI is a nine-to-twelve-month leading indicator of commercial building construction activity.
As for that other shoe...there is a lot of negative numbers, both from month-over-month ABI data and year-over-year. The details are as follows, but first a few notes:
Per usual, it will be important to watch the ABI and other metrics (e.g. construction material costs and labor rates) as the economy continues to navigate choppy waters. I suspect the measures will decline more next month given the sense of pessimism on Wall Street, but I hope I am wrong. There is a bit of distance between Wall Street and market demand.