Architectural Billings Index

Architectural Billings Index: September ABI national overall score of 47.0 was up 7.0 from August’s 40.0, which is under the expansionary zone, (>50). U.S. architecture firms specializing in commercial and industrial facilities likewise reported an increase design activity in September, coming on the heels of a significant upturn in July. Firms concentrating in the multifamily either residential or institutional sector reported gains in September.

The new design contracts index increased by 2.9 points to 48.9. Regional monthly scores were South 43.7, West 45.6, Midwest 45.6 and Northeast 41.5.

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 positive 0.1% while Design contract momentum was positive 3.4%. Regionally, All zones posted negative momentum, but the Midwest (4.5%), ranging from 1.0% in the Northeast to 7.7% in the West. Multi-family residential posted a positive momentum, 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.

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