With increasing demand for design services, the Architecture Billings Index (ABI) is continuing to strengthen. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the February ABI score was 54.9, up slightly from a mark of 54.2 in January. This score reflects a strong increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 64.8, higher than the reading of 63.2 the previous month – and its highest mark since January 2007.
Key February ABI highlights:
- Regional averages: Northeast (56.7), Midwest (54.7), West (54.7), South (52.7)
- Sector index breakdown: multi-family residential (60.9), mixed practice (56.9), commercial / industrial (53.3), institutional (50.7)
- Project inquiries index: 64.8
The regional and sector categories are calculated as a 3-month moving average, whereas the index and inquiries are monthly numbers.
Construction employment also on the rise
That’s not the only good news. According to data just released by the Associated General Contractors of America, construction employment increased in 145 out of 339 metropolitan areas between January 2012 and January 2013, declined in 141 and was stagnant in 53 metro areas. Association officials noted that after years of declining construction employment contractors in some metro areas are beginning to worry about the availability of skilled workers now that they have resumed hiring.
Pascagoula, Miss. added the highest percentage of new construction jobs (45 percent, 1,500 jobs) followed by Brownsville-Harlingen, Texas (19 percent, 600 jobs); Cheyenne, Wyo. (19 percent, 500 jobs) and Haverhill-North Andover-Amesbury, Mass.-N.H. (18 percent, 600 jobs). Dallas-Plano-Irving, Texas (10,100 jobs, 10 percent) added the most jobs. Other areas adding a large number of jobs included Los Angeles-Long Beach-Glendale, Calif. (9,600 jobs, 9 percent); Houston-Sugar Land-Baytown, Texas (8,700 jobs, 5 percent) and Phoenix-Mesa-Glendale, Ariz. (6,000 jobs, 7 percent).
The largest job losses were in Chicago-Joliet-Naperville, Ill. (-3,500 jobs, -3 percent) and Detroit-Livonia-Dearborn, Mich. (-3,500 jobs, -19 percent); followed by Northern Virginia (-3,200 jobs, -5 percent); and Charleston, W.V. (-2,900 jobs, -20 percent). Charleston, W.V. lost the highest percentage. Other areas experiencing large percentage declines in construction employment included Atlantic City-Hammonton, N.J. (-19 percent, -1,000 jobs); Detroit-Livonia-Dearborn, Mich.; Kankakee-Bradley, Ill. (-18 percent, -200 jobs) and Akron, Ohio (-17 percent, -1,800 jobs).
Association officials noted that after years of declining construction employment, many former construction workers have left for other industries or retired. They added that the industry’s dire conditions have deterred many graduates from pursuing careers in construction and as a result, the industry is likely to face a shortage of available skilled workers in some parts of the country if the industry continues to add jobs.