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Architecture Billings Index Posts Fourth Consecutive Positive Score

The August score for the American Institute of Architects (AIA) Architecture Billings Index (ABI) was 53.8, which was released on September 18, 2013 by the AIA.  This was the fourth consecutive score above 50 and the highest score since February of 2013.  The new projects inquiry index was 63.0, which decreased from the previous month.  The AIA’s press release is available here.

Given the last four months, the prospects for the construction industry look positive, and it currently appears that a full recovery is underway, as indicated by the AIA’s Chief Economist, Kermit Baker.  As mentioned last month, the positive economic news inherent in the ABI does not mean it is translating to your construction company.  Also, this index does not measure the profitability of the work that may be in process or available to bid on.  In other words, there may be more projects to bid on, but not at the margins the industry grew accustom to before the recession.  Another item of particular concern is the prospect that there may be increases in interest rates.  This could have an adverse affect on the construction industry’s recovery.  That being said, take this positive news in stride and continue employing the business practices developed during the recession until a more sustained and comprehensive recovery is felt by the industry.

Architecture Billings Index Positive for Month of June

There appears to be some more consistency in commercial construction market given the most recent Architecture Billings Index (ABI) score of 51.6.  Despite the decrease from the previous month’s score of 52.9 and the negative score in April, the consistency is seen in the period before in which there were 8 consecutive months of positive scores from August 2012 through March 2013.  This streak then coupled with 2 positive scores following the negative score in April reinforces the appearance of a stabilizing market.  What is even more encouraging from the American Institute of Architects’s (AIA) June ABI press release is that the new projects inquiry increased from the previous month to 62.6.  This reading presents the prospect for more construction work in the future.  The report did not however that there have been decreases in billings related to institutional construction.

The AIA also released it’s Consensus Construction Forecast this month, which reflected slower than expected activity for the 2013, but increases in projected activity in 2014.  When reading this report it is important to remember what the ABI represents, which is a 9 – 12 month lead indicator for construction spending.  The 8 months of consecutive positive scores above, and the positive scores for the last 2 months means there could be more spending in the last quarter of 2013 and first 2 quarters of 2014.  Any revisions in current spending and projections could have been identified last year when ABI produced negative scores below 50 for the period from March 2012 – July 2012.

What the stabilizing market means for your construction company is that it will be easier to plan for the year ahead.  It may be easier to project project volume and labor requirements, determine what insurance policies are best suited for the Company, determine what the company’s bonding capacity will be,  and determine any financing requirements.

Architecture Billings Index Produces a Negative April Score

The April slow down in architecture billings was significant enough to result in a negative score for the Architecture Billings Index (ABI), released by The American Institute of Architects (AIA) on May 22, 2013.  The April score of 48.6 was the lowest in almost a year.  The new projects inquiry index score was 58.5.

The negative April reading should cause contractors to pause and evaluate backlog, especially since the decrease in the ABI score may possibly be a result of financing concerns, as noted by Kermit Baker, AIA Chief Economist.  The next couple month’s scores will provide a better barometer for which way construction spending may go, and will provide your company the information it needs for short and longer term business planning.

To learn more about the most recent ABI score please read the AIA’s May 22nd press release.

Health Care Reform Issues for Construction Contractors with Aronson LLC

The passage of the Patient Protection and Affordable Care Act, commonly known as Obamacare or Health Care Reform, has created many questions for employers throughout the construction industry.

Join Aronson LLC and Independent Benefit Services on May 8, 2013 for an informative presentation on the various provisions of healthcare reform that will have a profound impact on how healthcare is delivered and funded in the United States. Our experts will cover the major changes for 2013 and 2014, including new W2 reporting requirements, the Summary of Benefits and Coverage, The Employer Mandate, The Individual Mandate, and The Exchange.

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Architecture Billings Index Maintains Positive Score in March

The March Architecture Billings Index (ABI) score released by the American Institute of Architects (AIA) on April 23, 2013 reflected another month of increases in design activity with a score of 51.9, however the rate of growth has decelerated.   The new projects inquiry index score was 60.1, which also reflected a decrease from the previous month.

Despite the decrease in March, the fact that the score remains positive should be encouraging news to construction contractors, as this may indicate more work to bid on in the future.

To learn more about the most recent ABI score please read the AIA’s April 23rd press release.

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