Architectural Billings Are Down But Not Really

The American Institute of Architects (AIA) Architecture Billings Index (ABI) clocked in at 56.5 in April, which is down from 58 in March. I report that with two huge caveats. First, 56.5 is historically pretty good, way above the 10+ year average of 51. Secondly, and more importantly (yet statistically confusing), all of the individual ABI measures were up from last month. I am not sure how that can happen (statistical anomaly? Voodoo?), but the net takeaway is that the design sector for buildings is pretty strong. This is good news for builders as the ABI is a nine-to-12 month leading indicator of commercial construction activity, with values greater than 50 signifying increasing design billings and values less than 50 signifying a decrease. The details are below but I have a few observations:

• Multi-practice hit a 10-year + 5-month high (the duration I have been tracking he ABI).
• Commercial/Industrial, at 60.7, is almost at its 10+ year high (61).
• Aside from the overall ABI, the only other decliners from March to April were Project Inquiries and Design Contracts, with the latter's 8.5% retreat being the only really dour news.
• On a year-over-year basis, the overall ABI is up and the only specific sector measure that is down is Institutional billing.
• Project Inquiries and Design Contracts are down year-over-year, likely goosed by the March to April declines.

So yes, the overall ABI is down but on the balance, the design sector is healthy which is good news for builders. In spite of the rough several weeks for the stock market and poor news regarding the general economy (inflation, etc.), the AEC world looks pretty strong.