For the eight consecutive month, the Architecture Billings Index (ABI) is reflecting a steady upturn in design activity. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. Although the American Institute of Architects (AIA) reported the March ABI score was 51.9, down from a mark of 54.9 in February, this score still reflects an increase in demand for design services (any score above 50 indicates an increase in billings). In addition, the new projects inquiry index was 60.1, down from the reading of 64.8 the previous month.
“Business conditions in the construction industry have generally been improving over the last several months,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “But as we have continued to report, the recovery has been uneven across the major construction sectors so it’s not a big surprise that there was some easing in the pace of growth in March compared to previous months.”
Key ABI highlights and details indicating higher employment rates for intern architects after the break…
An increasing demand for design services in the United States continues to strengthen the Architecture Billings Index (ABI). As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) has reported the February ABI score as 54.9, up slightly from a mark of 54.2 in January. This score reflects a strong increase in demand for design services (any score above 50 indicates an increase in billings). In addition, the new projects inquiry index was 64.8, higher than the reading of 63.2 the previous month and its highest mark since January 2007.
“Conditions have been strengthening in all regions and construction sectors for the last several months,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Still, we also continue to hear a mix of business conditions in the marketplace as this hesitant recovery continues to unfold.”
Key February ABI highlights:
The numbers are in and the American Institute of Architects’ November Architecture Billings Index (ABI) has revealed positive business conditions for all building sectors for the fourth consecutive month.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. Understanding this, the AIA is pleased to report that November has reached a five-year high with a score of 53.2, slightly up from 52.8 in October. Since August, the national billings index has continued to increased above 50.0 – the break-even point between contraction and growth – reflecting a steady rise in demand for design services. The West seems to be the only region in contraction, coming in at a score of 49.6.
Additionally, November also sees the Project Inquiry Index at 59.6, marking the 47th straight month in which inquiries into architectural services has been increasing.
“These are the strongest business conditions we have seen since the end of 2007 before the construction market collapse,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The real question now is if the federal budget situation gets cleared up which will likely lead to the green lighting of numerous projects currently on hold. If we do end up going off the ‘fiscal cliff’ then we can expect a significant setback for the entire design and construction industry.”
View the ABI highlights in greater detail, after the break…
We are happy to share on the beginning of this working week that the Architecture Billings Index has moved into positive territory for the first time in five months! The drastic three-point leap has launched the ABI to 50.2, up from last month’s 48.4, and the new project inquiry index moved to 57.2, up from mark of 56.3. As we have reported previously, the ABI is our profession’s economic indicator and any score above 50 indicates an increase in billings. Regionally, the South leads with 52.2, followed by the West with 51.2, Northeast at 45.5, and Midwest at 45.3. In terms of architectural sectors, multi-family residential and institutional place above 50 while institutional, commercial/industrial, and mixed practice all remain above 46. “Until the economy is on firmer ground, there aren’t likely to be strong increases in demand for design services,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “In the meantime, we can expect to see design activity alternate between modest growth and modest decline.”
We hope this positive score will let your Monday be a little bit merrier.
In continuing our coverage of the Architecture Billings Index, we share this past month’s score of 48.7 While such a mark still falls in negative territory (any score under 50 indicates a decline in billings), July’s activity was a considerable jump from June’s meager 45.9. And, even better, July’s new projects inquiry index moved up almost two full points to 56.3. Regionally, the South is surprisingly leading the averages with 52.7, followed by the Midwest with 46.7, the West with 45.3, and lastly, the Northeast region capping out at 44.3. In terms of the sector breakdown, multi-family residential remains strong with 51.4 followed by commercial/industrial projects and institutional projects. AIA Chief Economist, Kermit Baker, PhD, Hon. AIA, explained, “Even though architecture firm billings nationally were down again in July, the downturn moderated substantially. As long as overall economic conditions continue to show improvement, modest declines should shift over to growth in design activity over the coming months.”
Hopefully, we can hold on to this slight momentum upward and push toward higher numbers as we approach the Fall.
The June ABI has proven that we still have not been able to shake the weak activity of May - the score capped out at 45.9 from 45.8, marking the third month in negative territory. The market continues to show a drop in demand across all design services, in all regions. The poor conditions suggest upcoming weakness in spending on nonresidential construction projects, as each sector of construction shows negative growth commercial/industrial 46.9, institutional 46.0, and mixed practice 45.9. “The downturn in design activity that began in April and accelerated in May has continued into June, likely extending the weak market conditions we’ve seen in nonresidential building activity ,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “While not all firms are experiencing negative conditions, a large share is still coping with a sluggish and erratic marketplace.”
Sorry for such harsh news to start the work week – but if it is any consolation, there’s always next month….and, the Olympics begin Friday.
And, we are back with our monthly updates of the Architecture Billings Index. Last month looked promising as March marked the fifth consecutive positive rating. However, April’s index has been calculated as 48.4 – a drop from March’s 50.4. The index has been a roller coaster ride of slight positive trends followed by negative setbacks, and AIA Chief Economist, Kermit Baker, explains, “Considering the continued volatility in the overall economy, this decline in demand for design services isn’t terribly surprising. Also, favorable conditions during the winter months may have accelerated design billings, producing a pause in projects that have moved ahead faster than expected.”
More about April’s index after the break.
Last month, our reporting of the Architecture Billings Index was a little pessimistic, as the slight upward movement was no sure sign of a stable recovery. Yet, February marks the fourth month the Billings Index has remained in positive territory (a score of 50 or more indicates as such), and while we are cautious to mark the volatile index’s movement as a trend, we sure hope it is! February reported a score of 51.0 and a significant jump was reached in the new project inquiry index (up from 61.2 to 63.4). In fact, the 63.4 score is the highest inquires for new projects since July of 2007. “This is more good news for the design and construction industry that continues to see improving business conditions,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The factors that are preventing a more accelerated recovery are persistent caution from clients to move ahead with new projects, and a continued difficulty in accessing financing for projects that developers have decided to pursue.” Breaking the index down regionally, the Midwest leads with 56.0, followed by the South, Northeast and finally the West with scores of 51.3, 51.0, 45.6, respectively.
Star architect, Frank Gehry, attempts to survive the decline of U.S. growth by turning to Asia. The Architecture Billings Index illustrates the decreased demand for design serves in America by plunging from 51.4 in August to 46.9 in September. According to the American Institute of Architects, a score less than 50 indicates a decline in billings.
Continue reading for more detailed information.
The statistics are in for the ABI July, and as we shared in our coverage for June, the numbers are quite bleak. After June’s 46.3, July measured in more than a full point lower at 45.1. The new projects inquiry index dropped dramatically from 58.1 in June down to 53.7.“Business conditions for architecture firms have turned down sharply,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Late last year and in the first couple of months of this year there was a sense that we were slowly pulling out of the downturn, but now the concern is that we haven’t yet reached the bottom of the cycle. Current high levels of uncertainly in the economy don’t point to an immediate turnaround.” Regional averages include the South at 46.9, West at 46.6, Northeast at 46.4, and the Midwest at 44.9. Hopefully, for our coverage of the ABI August, we’ll have more positive data to share.