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Institutional Sector Drives ABI Higher07-27-15 | News

Institutional Sector Drives ABI Higher

The Architecture Billings Index barely moved above its benchmark of 50 in May, and then shot up to 55.7 in June. The ABI is one of the leading indicators of construction activity in the nation, according to the American Institute of Architects.

The Architecture Billings Index for the month of June is at its highest level since 2007, the American Institute of Architects reports.

June's ABI jumped to 55.7, driven in large part by the institutional sector. New projects such as education and healthcare facilities, public safety and government buildings are in the early stages of development.

Each ABI uses the number 50 as its benchmark. Scores above that level show an aggregate increase in billings, and anything below 50 points to a decline.
April's ABI was at 48.8. Then in May, it moved to 51.9.
The ABI reflects the approximate 9-to-12 months typically necessary between architectural billings and construction spending. It is considered a leading indicator of construction activity, the AIA said.
The new projects inquiry index for June stands at 63.4, up from 61.5 the previous month, while the design contracts index for June is at 52.5.
"June's numbers are likely showing some catch-up from slow growth earlier this year," Kermit Baker, chief economist for the AIA, said.
"This is the first month in 2015 that all regions are reporting positive business conditions," Baker said. "Aside from the multi-family housing sector, all design project categories appear to be in good shape."

Regional averages are as follows:
• Midwest, 57.2
• South, 54.9
• West, 50.7
• Northeast, 50.4

Sector averages are as follows:
• Institutional, 59.1
• Mixed practice, 54.7
• Commercial and industrial, 51.6
• Multi-family residential, 47.0