Construction Starts Slipped 6% In January, ABI Falls 4 Points
Data DiGest reports that "The value of new construction starts retreated 6% in January at a seasonally adjusted annual rate, according to McGraw-Hill Construction (MHC), based on data it collected. 'The decline came as the result of a pullback for nonresidential building after a strong December, combined with a loss of momentum for residential building.
At the same time, the nonbuilding construction sector showed further growth in January on top of its elevated December pace, aided by several large public works projects. On an unadjusted basis, total construction starts in January were…down 4% from the same month a year ago….Nonresidential building in January dropped 13%..., following December’s strong 27% gain...
[Residential building] dropped 7% in January after showing modest improvement during the previous five months. Single family housing held steady in January [but there was a] 35% decline for multifamily housing, which retreated after the gains witnessed at the end of 2010….Nonbuilding construction in January advanced 2%...
Additional perspective can be obtained by looking at 12-month moving totals, in this case the 12 months ending January 2011 versus the 12 months ending January 2010, which lessens the volatility present in one-month comparisons. For the 12 months ending January 2011, total construction was down 2%, due to this pattern by sector – nonresidential building, down 10%; residential building, up 5%; and nonbuilding construction, up 3%.'
The Architecture Billings Index (ABI) slipped to 50 in January, seasonally adjusted, the American Institute of Architects (AIA) reported on Wednesday, indicating an equal number of respondents to a 700-firm survey reported their billings had risen or fallen from the month before.
Following routine annual revisions to seasonal adjustment factors, the ABI was at 54 in December and 52 in November, following nearly three years of sub-50 readings. 'This slowdown is indicative of what is likely to be a very gradual improvement in business conditions at architecture firms for the better part of this year,' said AIA Chief Economist, Kermit Baker.
'We’ve been taking a cautiously optimistic approach for the last several months and there is no reason at this point to change that outlook. There are still too many firms that continue to see weak market conditions to expect a dramatic increase in the demand for services in the design and construction industry. '"