Final Thoughts
ABI Down Again in December
Written by David Schollaert
January 26, 2023
Business conditions continued to contract at architecture firms in December, though slightly fewer firms reported a decline in billings, according to a report from The American Institute of Architects (AIA).
AIA said the pace of decline during December slowed from November, with an Architecture Billings Index (ABI) score of 46.5 vs. 46.6, respectively.
The ABI is an important advance indicator of construction activity, and the sector is a key end-market for steel.
Any score above 50 indicates increased billings, and any score below 50 indicates a decline, AIA noted.
Last month’s results highlight an ongoing softness in business conditions to close out 2022, as firm billings declined for the third consecutive month in December.
Regionally, billings were all contracting as well last month, though the Midwest posted the best reading at 49.4. The South was 48.5, the Northeast 46.5, and the West stood at 45.5 for the month.
In its sector breakdown, mixed practice, at 54.8, rose again from the previous month, as did commercial/industrial (45.2). Institutional (47.3) and multi-family residential (44.3) both showed decreases.
AIA notes that the regional and sector categories are calculated as a three-month moving average, while the national index, design contracts, and inquiries are monthly numbers.
Design contracts also recovered in December, accelerating to 49.4 last month from 46.9 in November.
“Despite strong revenue growth last year, architecture firms have modest expectations regarding business conditions this coming year,” AIA chief economist Kermit Baker said in a statement. “With ABI scores for the entire fourth quarter of 2022 in negative territory, a slowdown in construction activity is expected later this year, though the depth of the downturn remains unclear.”
By David Schollaert, david@steelmarketupdate.com
David Schollaert
Read more from David SchollaertLatest in Final Thoughts
Final Thoughts
And just like that, we’re wrapping up the last SMU newsletter of 2024. We’re closing out our 19th year and looking with wide-eyed anticipation to what 2025 will bring.
Final Thoughts
SMU looks back at stories from Decembers past, one, five, 10, and 100 years ago.
Final Thoughts
It's that time of year again. You know, that time when people wonder if those things are drones in New Jersey or if the aliens are ready to come onto the stage just in time for Inauguration Day. What will that do for steel price volatility? In any case, the SMU team finds itself in Pittsburgh this week.
Final Thoughts
The Community Chat last Wednesday with ITR economist Taylor St. Germain is worth listening to if you couldn’t tune in live. You can find the replay and Taylor’s slide deck here. You can also find SMU reporter Stephanie Ritenbaugh’s writeup of the webinar here. Taylor is Alan Beaulieu’s protégé at ITR. Many of you know Alan from his talks at SMU Steel Summit. I found Taylor’s analysis just as insightful as Alan’s.
Final Thoughts
Cracks have formed in what has been presented as the Biden administration’s united front against Nippon Steel’s play for U.S. Steel. A report from the Financial Times said parts of the administration are at odds on the deal.