The monthly Architecture Billings Index (ABI) came in at a score of 54.2 in June, up 1.2 points from May's 53.0, the AIA announced today.
The ABI is a leading economic indicator of construction activity in the U.S., and reflects a nine- to 12-month lead time between architecture billings and construction spending nationally, and regionally, as well as by project type. A score above 50, as seen each month since February, represents an increase in billings from the previous month, while a score below 50 represents a contraction.
May's positive reading marks the fifth consecutive month of growth in design services since January's marginal decline. The new project inquiries index—the most reliable indicator of future billings—increased in May, making June's 1.2 gain in billings unsurprising. The new project inquiries index was recorded at 58.6 in June, down 3.8 points from May's 62.4. However, June's score still indicates that billings will likely rise again in July.
“So far this year, new activity coming into architecture firms has generally exceeded their ability to complete ongoing projects,” said AIA chief economist Kermit Baker, Hon. AIA, in a press release. "Now, firms seem to be ramping up enough to manage these growing workloads.”
The design contracts portion of the index dipped 1.1 points from May's score of 54.8, to a still healthy score of 53.7 in June. Both inquiries and design contracts have stayed above the 50-point threshold every month in 2017, a sign that momentum is strong in the market despite fluctuations in pace month to month.
Regional billings, which, unlike the national score, are calculated as a three-month moving average, increased in three of four regions in June. For the past two months, the Northeast was the only region to see billings fall below the 50-point growth threshold, but the region moved into positive territory in June with a score of 51.5. The South was the only region to post a decline in billings month to month, but stayed above 50 with a score of 54.8, indicating design services increased, albeit at a slower pace than in May. Design services accelerated most significantly in the West, with a score of 53.1—a 1.2 increase from its score of 51.9 a month prior. The Midwest posted a marginal 0.3 gain to a score of 51.9.
For the fifth consecutive month, all four sectors posted scores above 50, indicating an increase in design services. Additionally, each sector saw an increase in pace in June, albeit a marginal increase of up to 0.3 points in the commercial/industrial, institutional, and mixed practice sectors. The mixed practice sector posted the strongest score of any sector from March through May, but activity in the residential sector eclipsed that of mixed practices in June, with a 4-point gain from May's score of 53.1, to a score of 57.1. (Results of sectors are also calculated as a three-month moving average.)