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Positive Trend Continues for National Architecture Billings Index

By Eric Jay Toll for Arizona Builder’s Exchange

West Declines for Second Straight Month

ABIJuly2013Amid some cautionary reports of retail sales and a slowdown in CRE, the American Institute of Architects Architecture Billings Index (ABI) saw more than a full point jump in July over June. This can mean good news in the construction industry nine to 12 months down the road. However, the three month moving averages for the regions were all down.

The July ABI climbed to 52.7 from 51.6 in June, almost reaching its May index of 52.9. In the ABI, any reading over 50 shows increasing activity.

Although not tracked regionally, new project inquiries were up to a whopping 66.7, more than four points over the 62.6 in June and dramatically higher than May’s 59.1.

Despite the seemingly good news, AIA Chief Economist, Kermit Baker says that firms’ reports are mixed. “We hear a wide mix of business conditions all over the country, ranging from outstanding and booming to slowly improving to flat. In fact, plenty of architecture firms are reporting very weak business conditions as well,” he said.

Three Regions Lower; Midwest Up but Flat

In the west—which includes Arizona—the index declined for the second consecutive month, this time just a hair, down from June, 51.2 to 51.1 in July. In May, the West index stood at 52.1 for the region.

For the second month in a row, the Northeast had the highest index, 54.3, but that was down 1.3 points from June’s 55.6. The region was higher in July than its 53.7 mark in May. The South also declined to 54.2 from 54.8 in June, but was up from May’s 50.9. The Midwest was the only region with two months of positive movement growing to a 50.8 index in July, up nearly three points from its 47.5 in June and up 1.4 points from the 49.4 in May.

Three Sector Indices Skid

Sector indices moved up and down for the month of July with mixed practice topping the sector chart with a jump to 56.9 (52.4, June; 51.0, May). The commercial/industrial sector showed positive growth at 54.2, but that was down from 54.7 in June. The sector was still significantly higher than its 47.5 index in May. Multifamily is also on a roller coaster with a 53.3 index in July, down from 54.0 in June, but up from 52.8 in May. Institutional billing continued its slide, down almost one point to a barely positive 50.6 in July (51.8, June; 52.2, May).