Architectural Billings Index
Architectural Billings Index: January 2021’s national overall ABI score of 44.9 was down 2.6 points from December’s 42.3, 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 January, coming on the heels of a significant downturn in December. Firms concentrating in the multifamily declined in January.
The new design contracts index increased by 1.0 points to 48.8. Regional monthly scores were South 47.4, West 42.8, Midwest 42.2 and Northeast 41.9.
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 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 minus 12-month y/y) was up 3.3% while Design contract momentum was up 7.2%. Regionally, all zones posted a positive momentum, ranging from 0.3% in the West to 7.7% in the Northeast. Multi-family residential and Commercial Industrial posted a positive 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.