ABI Backpedaling but Still in the Green

The AIA Architectural Billing Index (ABI) for November 2014 was clocked at 50.9, down from 53.7 in october and 55.2 in September. There's been a slow backslide for the past few months, but it is still above 50. 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. Here is the geographic and sector breakdowns:

Regional (three month moving) Averages for November 2014:

• Northeast: 46.7 (down from 47.0 in October, basically a wash)
• South: 57.9 (up from 58.4 in October. A downward move, but the South remains strong. A constant in the ABI)
• Midwest: 49.8 (versus 54.4 in October, a sharp decline and now contracting)
• West: 52.7 (versus 56.1 in October, a big move downward but still above 50. The West is a constant second place to the South)

The Northeast continues to be a drag and the Midwest has also slid to the contraction range. The above 50 scores for the nationwide ABI have been riding on the backs of the South and the West.

Sector Averages for November 2014:

• Multi-family Residential: 56.8 (versus 54.7 in October; this sector continues its ABI leadership and keeps getting stronger)
• Commercial/Industrial: 50.6 (versus 52.3 in October, a move downward)
• Mixed Practice: 52.6 (versus 56.9 in October, a worse move downward)
• Institutional: 51.3 (versus 54.4 in October, another move downward)

Project inquiries were down to 58.8 (down 62.7 in October and 64.8 in September). The Design Contracts Index (which, according to AIA highlights trends in new design contracts at architectural firms) was measured in at 54.9, down from 56.4 in October and 56.8 in September. 

The ABI is down overall and every sector, except for the steroid-injecting multi-family market, are down. However, every sector is above 50. The below-50 weakness is housed in the Northeast and Midwest. Hopefully the weakness remains contained there.