Despite posting the strongest score of 2016 in December, the Architecture Billings Index (ABI) slipped in January to a score of 49.5 indicating a small decline in billings. The ABI is a leading indicator for future nonresidential construction spending and activity. The average lead time is nine months to a year between billings and construction spending. For the ABI, scores above 50 indicate an increase in billings and scores below 50 indicate a decrease.

With January’s score just below 50, we aren’t talking a huge decline in billings. We should also point out that the ABI score for January 2016 was below 50 and bounced right back up the next month and had six consecutive months of increased design activity.

On a more positive note, the new projects inquiry index for January was 60.0, up from December’s score of 57.6. The design contracts index, an indicator of future billings, also increased from 51.2 in December to 52.1 in January.

Three of the four regions were in the positive territory according to the latest three-month regional averages. The South increased from 53.8 in December to 54.2 in January. The Northeast had the second highest score with 53.0 in January after a score of 54.0 in December. The Midwest was also strong with a score of 52.4, down a bit from the 54.4 posted the previous month. The West region remained at a score of 48.8 in January.

The sectors were a mixed bag in January based on their three-month rolling averages. Half were positive and the other half fell back into negative territory. The Institutional sector led all sectors in January increasing to a score of 54.6 from 53.3 in December. Commercial/Industrial was next with a score of 53.4, down from 54.3 the month prior. Mixed Practice and Multi-Family Residential both had a score of 48.1 in January after posting positive scores in December of 51.9 and 50.6, respectively.