The Hanley Wood Data Studio reports that the monthly Architecture Billings Index (ABI) came in at a score of 49.5 in January, down 6.1 points from December's 55.6, according to an announcement made today by the American Institute of Architects (AIA).
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 represents an increase in billings from the previous month, while a score below 50, as seen in January, represents a contraction.
Following a strong reading in December, when architecture billings soared to a nine–year high, the ABI contracted in January, primarily due to a decrease in billings seen in the Northeast and Midwest. January's contraction does not come as a surprise, as the new project inquiries index, which is the most reliable indicator of future billings, eased in December. The new project inquiries index ticked up 2.4 points to a score of 60.0 in January, indicating that billings are likely to rebound in February.
“This small decrease in activity, taking into consideration strong readings in project inquiries and new design contracts, isn’t exactly a cause for concern,” said AIA chief economist Kermit Baker in a press release. “The fundamentals of a sound nonresidential design and construction market persist.”