Originally published in Interiors & Sources

06/30/2010

Architecture Billings Index Falls Back After Three Months of Improving Conditions

The American Institute of Architects (AIA) reported the May ABI rating was 45.8, down substantially from a reading of 48.4 the previous month

 

After three straight months of improving conditions, the Architecture Billings Index (ABI) fell nearly three points. As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported that the May ABI rating was 45.8, down substantially from a reading of 48.4 the previous month.  This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings), and comes on the heels of the highest score since January 2008, when revenue at architecture firms headed into recession. The new projects inquiry index was 55.5.

 

“This dip is somewhat of a surprise since it appeared that conditions were pointing toward a recovery,” says AIA Chief Economist Kermit Baker. “The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects that apparently would be successful in this economic environment.”

 

He added, “An amendment has passed the House that would help lenders and borrowers as they attempt to work out their loans under terms that are mutually acceptable, avoid large numbers of commercial foreclosures, and free up credit that can be used more constructively. If this passes the in Senate then some much needed relief will available for the struggling design and construction industry.”

 

Key May ABI highlights:

 

•          Regional averages: Northeast (50.6), Midwest (48.5), South (45.9), West (42.9)

•          Sector index breakdown: commercial/industrial (51.3), multi-family residential (46.9), mixed practice (46.8), institutional (43.4)

•          Project inquiries index: 59.6

 


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Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.

Bluebeam® Revu® simplifies digital facilities document management from design review to leveraging as-builts, maintenance manuals and O&Ms submittals.

 


 
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