Architectural Billings Index: July ABI national overall score of 40.0 remained flat from June’s 40.0, which is under the expansionary zone, (>50). U.S. architecture firms specializing in commercial and industrial facilities reported a slight increase in design activity in July, coming on the heels of a significant upturn in June. Firms concentrating in the multifamily – either residential or institutional sector – reported small gains in July.

The new design contracts index decreased by 4.0 points to 40.0. Regional monthly scores were South 40.7, West 40.9, Midwest 40.1 and Northeast 36.8.

The Architecture Billings Index (ABI) is a leading economic indicator that provides an approximately nine to twelve-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 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 -11.8% while Design contract momentum was -8.8%. Regionally, all zones posted negative momentum ranging from -12.7% in the Midwest to -18.2% 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.