AIA Billings Index up in February. Following a drop of nearly three points, the Architecture Billings Index (ABI) nudged up almost two points in February. 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 rating was 44.8, up from a reading of 42.5 in January. This score indicates a continued decline in demand for design services, as any score above 50 indicates an increase in billings. The new projects inquiry score was 52 points.
“We continue to hear that funding dedicated for construction projects in the stimulus package has not yet been awarded, resulting in a bottleneck of potential projects that could help jump-start the economy,” said AIA Chief Economist Kermit Baker. “That, coupled with a persistently rigid credit market for private sector projects, is a key reason why the design and construction industry continue to suffer at near-historic levels in terms of job losses.”
PMI Index slips in February. Economic activity in the manufacturing sector expanded in February for the seventh consecutive month, and the overall economy grew for the 10th consecutive month, according to the Institute for Supply Management, Tempe, Ariz.
However, ISM’s benchmark Purchasing Managers Index, a monthly survey of purchasing managers, declined 1.9 points, from 58.4 points to 56.5 points. Any reading over 50 points indicates the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
“While new orders and production were not as strong as they were in January, they still show significant month-over-month growth,” said Norbert Ore, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee. “Additionally, the Employment Index is very encouraging, as it is up 2.8 percentage points for the month to 56.1 percent, the third consecutive month of growth in the Employment Index.”
Leading Indicators Index still looks strong. The Conference Board’s Leading Economic Index (LEI) for the U.S. increased 0.1 percent in February, following a 0.3 percent gain in January, and a 1.2 percent rise in December. Said Ataman Ozyildirim, an economist at the Conference Board, “The LEI for the U.S. has risen rapidly for almost a year now and it has reached its highest level. But, the sharp pick-up in the LEI appears to be stabilizing. As the U.S. economy moves from recovery into early phases of an expansion, the leading economic index points to moderately improving economic conditions in the near term.”