Dive Brief:
- The Architecture Billings Index swung back in February, coming in at a score of 50.7, ahead of January's score of 49.5, the American Institute of Architects reported Wednesday.
- Within the index, the institutional segment posted the highest score for the second-consecutive month at 51.8, followed by multifamily residential at 49.3, mixed-practice close behind at 49.2, and commercial/industrial at 48.9.
- The new projects inquiry index climbed to 61.5, up slightly from a score of 60.0 in January. The ABI is an indicator of future construction spending — with a lead time of nine to 12 months — as design services typically lead to new projects. Any ABI score above 50 indicates a rise in billings.
Dive Insight:
February's rise over the 50-mark signals the index's return to a positive increase in billings. Despite slow growth in the first two months of 2017, analysts predict that there could be an uptick in design activity in the coming months — particularly on the backs of new project inquiries. AIA Chief Economist Kermit Baker said in a release that February's new design contracts showed their largest monthly increase in more than two years, which should come as a sign of optimism for architecture firms.
However, a steady downturn in construction spending could be hampering future growth in the index and lengthening the time it takes to see a significant boost in design activity. Despite seeing an eight-year high in November's spending, the industry has seen a steady dip in the segment since December.
Still, big-ticket projects including construction of the U.S.–Mexico border wall and the Keystone XL and Dakota Access pipelines could propel growth in the industry in the coming months and years. President Donald Trump's $1 trillion infrastructure proposal and his directive to fast-track the nation's infrastructure needs has only brightened industry outlook for those hoping to see a much-needed resurgence of construction projects, but he must first deliver on those promises.
