I am a firm believer in looking as far upstream as possible to see where business patterns are probably going to go. While I am still in search of the “Source of the Nile”, as it relates to construction, the AIA Billing Index (ABI) is the best leading indicator I can find.
The May report highlights are:
- Regional averages: Northeast (53.7), West (52.1), South (50.9), Midwest (47.5)
- Sector index breakdown: multi-family residential (52.8), institutional (52.2), mixed practice (51.0), commercial / industrial (47.5)
- Project inquiries index: 59.1
Anything above 50 indicates a positive growth pattern
The ABI, produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms.
While this is nonresidential billing inquiries and not home construction, business aren’t planning to build unless the consumer is spending. This is just one more sign that the economy is on a positive slope.
Here is a link to the full report: