US Jan architectural index hits 5-year high; outlook improving

21 February 2013 20:05  [Source: ICIS news]

HOUSTON (ICIS)--An index of future US construction activity increased sharply for January to its highest level since late 2007 and remained in positive territory for the sixth straight month, the American Institute of Architects (AIA) said on Thursday.

The AIA’s January Architecture Billings Index (ABI) was at 54.2, up from a seasonally adjusted 51.2 in December. Any score above 50 indicates an increase in demand for architectural design services.

“We have been pointing in this direction for the last several months, but this is the strongest indication that there will be an upturn in construction activity in the coming months,” AIA chief economist Kermit Baker said.

In November 2007, as the recession loomed, the ABI was 54.9. One year ago, the score was 50.4, indicating positive but limited growth.

Baker’s optimism about the January ABI, however, was tempered by concern about lenders, of which he said “a continued reservation by lending institutions to supply financing for construction projects is preventing a more widespread recovery in the industry".

He added on Thursday that recent results from the Federal Reserve Board’s Senior Loan Office Survey “already point to a bit of easing in lending standard by banks".

The ABI results reflect a lag of 9-12 months between architecture billings and construction spending, according to the AIA.

The project-inquiries score for January increased to 63.2, also significantly higher than the seasonally adjusted December project-inquiries score of 57.9.

In the construction categories, January saw its strongest gain in the multi-family residential sector, rising nearly 8%, while mixed-practice sector growth was marginal. Declines were also marginal in the commercial/industrial and the institutional categories.

Regionally, the AIA survey indicated gains in the west and south, and declines in the northeast and Midwest.

Every $1,000 spent on non-residential construction generates $160-230 (€120-173) worth of consumable chemicals and derivatives, according to the American Chemistry Council.

($1 = €0.75)

By: Larry Terry
1 713 525 2653

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