It seems the U.S. Architecture Billings Index (ABI) has yet to recover from 2013’s end of the year decline. Though 2014 started with a “modest uptick,” the March ABI has reveals a share decrease in design services. As reported by the American Institute of Architects (AIA), the March ABI score was 48.8, down from a mark of 50.7 in February. Despite this, the new projects inquiry index was 57.9, up from the reading of 56.8 the previous month.
“This protracted softening in demand for design services is a bit of a surprise given the overall strength of the market the last year and a half,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Hopefully, some of this can be attributed to severe weather conditions over this past winter. We will have a better sense if there is a reason for more serious concern over the next couple of months.”
A breakdown of regional highlights, after the break...
- South (52.8)
- West (50.7)
- Northeast (46.8)
- Midwest (46.6)
Sector Index Breakdown:
- Multi-Family Residential (52.1)
- Commercial / Industrial (49.6)
- Institutional (49.0)
- Mixed practice (47.6)
Key March ABI Highlights:
- Project inquiries index: 57.9
- Design contracts index: 48.2
With this release, the AIA has added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contracts in March was 48.2.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. Regional and sector categories are calculated as a 3-month moving average, whereas the index and inquiries are monthly numbers. Any score above 50 reflects an increase in design services.