The Architecture Billings Index (ABI) is an indicator for commercial and industrial building activity. The Work-on-the-Boards survey is given to architecture firms each month to report how billing activity performed in the previous month. The ABI is a reliable tool for firms to track architectural movements in the market. Readings above 50 indicates rising levels of construction for non-residential buildings while readings below 50 indicate contraction.
Billings were down to 49.1 in June, down 3.50% from May’s reading of 50.9. The index is down 7.10% from June of 2018, when the index was 53.1.
Architecture billings tend to only have an economic effect 9-12 months in after that month’s index is released because of time lag between planning for construction and starting construction. Because architecture billings are a leading economic indicator it would seem to indicate a contraction of the construction sector within the next year; but keeping in mind that it is residential construction, not commercial construction that makes up the majority of building, the recent slowdown in ABI should not be used as a strong indication as to the growth of construction as a whole. Strong demand and investment continue for residential construction, which will continue to drive success in the industry in the near future.
July 17, 2019