Architectural Billings Index: December 2020 ABI national overall score of 42.6 was down 3.7 points from November’s 46.3, which is under the expansionary zone, (>50). U.S. architecture firms specializing in commercial and industrial facilities likewise reported a decrease in design activity in December, coming on the heels of a significant downturn in November. Firms concentrating in the multifamily declined in December.

The new design contracts index decreased by 0.1 points to 48.5. Regional monthly scores were South 46.8, West 43.4, Midwest 43.6 and Northeast 38.8.

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) decreased 16.9% while design contract momentum declined 6.5%. Regionally, all zones posted increased momentum, ranging from 3.5% in the South to 9.1% in the Northeast. Multi-family residential and commercial/ industrial posted an upward momentum; institutional 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.