Uh oh…ABI Falls Nationwide but Increases in the West

Things go up, things go down...The AIA ABI figures for March 2014 were just posted and the nationwide number fell to 48.8, down from 50.7 in February. This is a pretty sharp fall, but like anything, the devil is in the details and I'll get to that soon. But, as any value greater than 50 means that architecture billings are increasing (and conversely, any value less than 50 means billings are decreasing), a fall from 50.7 to 48.8 is not good news. Architectural billings are a nine to 12 month leading indicator for construction activity. But most of the damage is in certain regions, which are shown below:

Regional Averages for March 2014:

• Northeast: 46.8 (down sharply from 48.3 in February and still below the threshold value of 50)
• South: 52.8 (same as February)
• Midwest: 46.6 (down from 47.6 in February and still below 50)
• West: 50.7 (up slightly from 50.5 in February)

The west continues to be strong, but as mentioned last month, the strength is concentrated in major metropolitan areas (San Francisco/San Jose is still very hot). This shows that even within large regions, there are pockets of strength AND weakness.

Sector Averages for March 2014:

• Multi-family Residential: 52.1 (down from 52.5 in February)
• Commercial/Industrial: 49.6 (down sharply from 51.9 in February)
• Mixed Practice: 47.6 (down from 46.6 in February)
• Institutional: 49.0 (up sharply from 46.6 in February)

The multi-family residential market continues to pace building construction, which has been an on-going trend. Yet, the slight decline will be worth watching. The decrease in commercial/industrial is also worthy of attention, as the recent drop is mildly troubling.

One bright spot in the new data: project inquiries increased to 57.9 from 56.8 in February.