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US: After Some Encouraging Signs, Architecture Billings Index Drops Substantially Print E-mail
Wednesday, 16 December 2009 11:50

High level of inquires for new projects, but competitive marketplace is adversely impacting billings.

Following its highest mark since August 2008, the Architecture Billings Index (ABI) dropped more than three points in November. 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) reported the November ABI rating was 42.8, down from 46.1 in October.  This score indicates a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 58.5, the same mark as in October.

“There continues to be a lot of uncertainty in the construction industry that likely will delay new projects in the near future,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Perhaps the President’s plan calling for loans for small business, funding for infrastructure projects and rebates for homeowners making energy efficient improvements will help speed a recovery in the construction industry.”
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Key November ABI highlights:

Regional averages: South (46.4), Northeast (45.0),  Midwest (43.7), West (41.1)
Sector index breakdown: institutional (47.0), multi-family residential (45.8), mixed practice (42.8), commercial / industrial (40.7),
Project inquiries index: 58.5

About the AIA Architecture Billings Index
The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. The diffusion indexes contained in the full report are derived from a monthly survey sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month. The regional and sector data is formulated using a three-month moving average.

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Last Updated on Thursday, 26 May 2011 10:50
 
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