Architectural Billings Index
Architectural Billings Index: May’s ABI national overall score of 32.0 was up 2.5 points from April’s 29.5, but still under the expansionary zone, (>50). U.S. architecture firms specializing in commercial and industrial facilities reported an increase in design activity in May, coming on the heels of a significant downturn in April. Firms concentrating in the multi-family sector – either residential or institutional – reported gains in May.
The new design contracts index increased by 5.5 points to 33.1. Regional monthly scores were South 30.6, West 36.0, Midwest 29.7 and Northeast 25.1.
The Architecture Billings Index (ABI), is a leading economic indicator that provides an approximately nine- to 12-month glimpse into the future of nonresidential construction spending activity. The results are seasonally adjusted to allow for comparison to prior months. Scores above 50 indicate an aggregate increase in billings, and scores below 50 indicating a decline.
Figure 1 lists the overall ABI and all its sub-indexes. It presents and compares monthly and 3MMA data, showing percentage point change on both a three and 12-month basis, as well as momentum. Green denotes positive change, while red indicates negative growth. National momentum, (3-month y/y subtract 12-month y/y) was -25.6% while design contract momentum was -30.9%. Regionally, all zones posted negative momentum ranging from -16.9% in the Midwest to -23.5% in the South. Multi-family residential, commercial / industrial, and institutional all recorded negative momentum.
At Gerdau we follow the ABI because it is a leading indicator of non-residential construction activity with an approximate 12-month lead-time to ground-breaking. The ABI has a proven track record and as such it is useful for business planning purposes.