This will likely be the last post of the year and the news is good-ish. The good lies in that architectural billings increased in November, as the American Institute of Architects (AIA) Architecture Billings Index (ABI) for November came in at 51. A value greater than 50 means that architecture billings are increasing, while a value less than 50 means billings are decreasing. We care about this because the ABI is a nine-to-12 month leading indicator of commercial construction activity. Spoiler alert: construction will remain largely busy for the next year. The caveat lies in that the ABI has declined two months in a row and has been on a downward trend since July. This is no reason to panic. In fact, a *moderate* slowdown may be a welcome change from the frenetic pace the AEC industry has been on for most of 2021. Also, this may be the industry adjusting from some serious economic headwinds, chiefly a represented by abnormally high inflation in materials and wages and a woeful supply of skilled labor. Usually that cocktail would lead to a dramatic slowdown, yet we are persevering. The questions is for how long? Similar the the overall ABI number, the regional ABI readings all declined. But since this is the holiday season, let's stay positive: three of the four regional values clocked in above 50.
The story is similar for industry sectors in that all ABI values declined from the previous month, yet all are still above 50. This means the billings are growing across the board, albeit at a slower rate than the previous month. All in all, this is good news.
Project inquiries and design contracts also fell from October, but both are well above 50 and their 199-month averages, so we will finish on that positive note. I hope everyone has happy and safe holidays!
0 Comments
Leave a Reply. |
Archives
March 2023
Categories |