Strong architecture billings point to construction's momentum

Dive Brief:

Demand for design services continued its climb in November, coming in at 55 on the American Institute of Architects' latest Architecture Billings Index — the highest number on the monthly index so far this year. The ABI is an indicator of future construction spending with a nine- to 12-month lead time. The figures were 51.7 in October and 49.1 in September.
Within the index, the commercial/industrial sector rose to 53.3 last month, up from 51.2 in October. The institutional sector inched up, increasing from 50.7 in October to 52.4 in November, while the multifamily segment also increased, rising from 50.7 to 53.9 for the period. Mixed-practice climbed from 50.7 to 53.6 month-over-month.
The sub-index tracking new project inquiries increased modestly in November, rising from 60.2 in October to 61.1 for the month. New design contracts remained relatively stable month-over-month, rising from 52.8 to 53.2.

Dive Insight:

November's figure marks the strongest monthly growth so far this year, and spells a positive outlook for the industry moving into next year.

Growth in employment figures and construction spending, too, point to construction's momentum in the coming months. The industry added another 24,000 net new jobs in November, with specialty trade contractors in the residential and nonresidential sectors once again fueling that growth. Though the heavy and civil engineering segment lost nearly 8,000 jobs during the period, the report follows long-term trends and indicates a stable economy, according to the Associated Builders and Contractors.

Spending reports over the past few months also suggest continued growth. The measure grew month-over-month in September and October, breaking from spending's downward trend seen throughout much of the past year. Construction spending will likely continue to expand with rebuilding efforts in California and across the South following damage caused by recent wildfires and hurricanes.

Industry activity is slated to end 2017 on a high note, with Dodge Data & Analytics economists predicting a 4% increase in starts values this year to $746 billion. Starts had been pacing at an annual rate of $728.1 billion as of July.