Architecture Billings Index Turns Positive After 20 Months of Decline
The Architecture Billings Index (ABI) saw a modest increase in October, marking the first positive score after 20 months of decline, as reported by the American Institute of Architects (AIA) and software provider Deltek on November 20.
The ABI, which predicts nonresidential construction activity 9 to 12 months ahead, rose to 50.3 in October. A score above 50 indicates an increase in billings from the previous month, while a score below 50 reflects a decline.
“Billings have finally stabilized this month, and firms are feeling more optimistic about revenue projections for 2025,” said Kermit Baker, AIA’s chief economist, in a statement.
For 2024, 41% of AIA-surveyed firms expect their net revenue to increase compared to last year, with an average projected growth of 0.4%. However, 36% of firms anticipate a decrease in revenue. Looking ahead to 2025, more firms are optimistic. Those projecting growth for next year expect a stronger increase, averaging 1%. These firms cite falling interest rates, a more favorable lending environment, and strong backlogs and new project inquiries as key factors. Only 26% of firms expect a revenue decline for 2025, according to the survey.
“Overall, 41% of firm leaders anticipate net revenue growth from 2024 to 2025, with 32% expecting growth between 5% and 9%,” Baker added.
Regionally, the South was the only region to report a positive billings score in October, at 52.1. The West and Midwest showed improvements from September, rising to 47.6 and 46.9, respectively, while the Northeast saw a slight dip to 45.6.
In terms of sectors, firms focused on institutional work had the highest billings score at 50.5. Billings for firms specializing in commercial/industrial work and multifamily residential also improved from September, but remained weak, with scores of 47.0 and 45.6, respectively.
Reference
Leggate J. (2024) Architecture Billings Index Turns Positive After 20 Months of Decline . Engineering News Record. November 20.
Construction Industry Adds 8,000 Jobs in October 2024
Construction sector employment rose by 8,000 jobs in October following a small increase in spending in September as the industry hiked hourly wages at a faster rate than other industries, according to an analysis of new government data the Associated General Contractors of America released.
Association officials said employment gains for the month were likely impacted by hurricanes hitting fast growing regions and the ongoing impacts of construction labor shortages.
“The job gains in construction occurred even though hurricanes in the Southeast probably dragged down hiring in previously fast-growing states,” said Ken Simonson, the association’s chief economist. “Contractors are hiring and raising hourly pay at above-average rates in an effort to keep projects on track.”
Construction employment in October totaled 8,310,000, seasonally adjusted, an increase of 8,000 from September. The sector has added 223,000 jobs or 2.8% during the past 12 months, double the 1.4% increase for total nonfarm employment. Over the past 12 months, nonresidential contractors added 178,400 employees (3.7%), while residential construction firms added 44,500 workers (1.3%).
A separate government report showed construction spending totaled $2.15 trillion at a seasonally adjusted annual rate in September. That was an increase of 0.1% from the August rate and 4.6% from September 2023.
Spending rose for data centers and most infrastructure segments, Simonson noted. Data center construction increased 0.6% for the month and 48% over 12 months. Highway and street construction climbed 0.4% and 1.5%, respectively, and investment in transportation projects such as airports and rail rose 0.8%and 7.2%, respectively. But spending on multifamily housing and most private nonresidential segments other than data centers declined in September, Simonson added.
Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—climbed by 4.5% over the year to $36.23 per hour. The increase topped the gain in overall private sector pay for production workers, which rose 4.1% over 12 months to $30.48 per hour. That difference in hourly pay meant that construction workers earned a wage “premium” of 18.9% compared to the overall private sector.
Association officials said construction employment should continue to grow, especially as parts of the country rebuild from hurricane damages. But they said the industry would continue to struggle to find enough workers until federal officials boost funding for construction education and training programs. And they continued to urge Congress and the administration to expand the number of visas available to skilled people willing to work in needed construction jobs.
“Hurricane season will end, but labor shortages aren’t going to go away just because we turned a page on the calendar,” said Jeffrey D. Shoaf, the association’s chief executive officer.
View the construction employment data (https://bit.ly/4i1ek7t).
Builder Confidence Moves Higher as Election Uncertainty is Lifted
Builder sentiment improved for the third straight month and builders expect market conditions will continue to improve with Republicans winning control of the White House and Congress.
Builder confidence in the market for newly built single-family homes was 46 in November, up three points from October, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released in November.
“With the elections now in the rearview mirror, builders are expressing increasing confidence that Republicans gaining all the levers of power in Washington will result in significant regulatory relief for the industry that will lead to the construction of more homes and apartments,” said NAHB Chair Carl Harris, a custom home builder from Wichita, Kansas. “This is reflected in a huge jump in builder sales expectations over the next six months.”
“While builder confidence is improving, the industry still faces many headwinds such as an ongoing shortage of labor and buildable lots along with elevated building material prices,” said NAHB Chief Economist Robert Dietz. “Moreover, while the stock market cheered the election result, the bond market has concerns, as indicated by a rise for long-term interest rates. There is also policy uncertainty in front of the business sector and housing market as the executive branch changes hands.”
The latest HMI survey also revealed that 31% of builders cut home prices in November. This share has remained essentially unchanged since July, hovering between 31% and 33%. Meanwhile, the average price reduction was 5%, slightly below the 6% rate posted in October. The use of sales incentives was 60% in November, slightly down from 62% in October.
Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three HMI sub-indices were up in November. The index charting current sales conditions rose two points to 49, the component measuring sales expectations in the next six months increased seven points to 64 and the gauge charting traffic of prospective buyers posted a three-point gain to 32.
Looking at the three-month moving averages for regional HMI scores, the Northeast increased four points to 55, the Midwest moved three points higher to 44, the South edged up one point to 42 and the West held steady at 41.
HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at Housing Economics PLUS.
Revealed: The Industries with the Best Employee Benefits
According to recent data, 78% of employees say they’re more likely to stay at a job based on the benefits offered (https://unitedinsurance.net/publications/5-critical-statistics-about-benefits-and-employee-retention/). Furthermore, the cost of replacing an employee can be between one-half and two times the departing employee’s salary (www.lano.io/blog/the-true-cost-of-employee-turnover).
To discover which industries offer the most comprehensive employee packages, international telecom provider TollFreeForwarding.com gathered new data to rank 16 industries on their employee benefits. Each industry was ranked across 20 different benefits based on the average number of businesses in the sector that offer each perk.
Based on the findings, the finance and insurance industry has the best benefits, as the industry earned the highest overall score of 92.33 out of a possible 100. This industry scored highly for all 20 benefits, ranking either first or second for 14 of the 20 included in the study. Benefits that finance and insurance ranked best for include access to wellness programs (79%), access to employee assistance programs (84%), and access to student loan repayment (12%).
The complete rankings are available in Table 1.
TollFreeForwarding.com also looked at which benefits are offered most overall across industries. The results are in Table 2
.
Jason O’Brien, COO of TollFreeForwarding.com, said this of the findings: “While it’s interesting to see how employee benefits compare across different industries, it can’t be overstated just how important it is, for both employers and employees, that businesses offer competitive benefit packages. Studies show how significant employee benefits are to attracting and retaining workers, but even businesses with comprehensive offerings can’t be static.
We’ve found that younger employees don’t necessarily want the same benefits that were appealing to their parents’ generations. Therefore, business leaders need to continuously be learning what their employees want, as well as what else is being offered by others.”
No matter what industry you may be in, comprehensive benefits packages are beneficial to employers and employees alike. Not only do benefits enable employees to have more balance in their lives, but it also ensures businesses can retain their workers, preventing unneeded costs.
