Architectural Billings Index: July’s 2023 national Architectural Billings Index of 50.0 was down 0.1 points from June’s 50.1, which is above the expansionary zone, (>50). U.S. architecture firms specializing in Commercial / Industrial and Institutional all reported an increase in design activity in July.

The design contracts sub-index decreased by 2.7 points to 50.0. Regional monthly scores were – South: 48.9, West: 49.6, Midwest: 51.6 and Northeast 49.3.

The Architectural Billings Index (ABI) is a leading economic indicator that provides an approximately nine to 12-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 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 up 3.3% while design contract momentum increased 5.1%. Regionally, Northeast, and West, posted a negative momentum, ranging from 1.0% in the Northeast to 5.0% in the West. Institutional and Multi-Family Residential facilities also posted a negative momentum.

At Gerdau, we follow the ABI because it is a leading indicator of non-residential construction activity with an approximate nine to 12-month lead time to groundbreaking. The ABI has a proven track record and, as such, it is useful for business planning purposes.