Architectural Billings Index: February 2021’s Architectural Billings Index of 53.3 was up 8.4 points from January’s 44.9, which is within the expansionary zone, (+50). U.S. architecture firms specializing in commercial/industrial facilities likewise reported an increase in design activity in February, coming on the heels of a downturn last month. Firms concentrating in the multifamily residential and institutional sectors declined in February.

The new design contracts sub-index increased by 2.8 points to 51.6. Regional monthly scores were – South: 52.4, West: 49.5, Midwest: 49.3 and Northeast: 46.9.

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 indicate a decline.

Figure 1 lists the overall ABI and its sub-indexes. It presents and compares monthly and three-month moving average (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. National momentum, (3-month y/y minus 12-month y/y), was 7.3% while design contract momentum increased 8.7%. Regionally, all zones posted a positive momentum, ranging from 1.7% in the West and Midwest to 12.6% in the Northeast. The commercial / industrial sector posted a positive momentum, while the multifamily residential and institutional sectors recorded negative momentum.

At Gerdau we follow the ABI because it is a leading indicator of nonresidential construction activity, with up to a one-year lead time to groundbreaking. The ABI has a proven track record and, as such, it is useful for business planning purposes.