Architecture Billings Index Shows Most Positive Signs in Over a Year

Nov. 20, 2009

Amidst a continued high level of inquiries for possible new projects, the Architecture Billings Index (ABI) has reached its highest mark since August 2008, just before the serious credit problems emerged in our economy. The ABI, which reflects the 9- to 12-month lag time between architecture billings and construction spending, is one of the leading economic indicators of construction activity.

The American Institute of Architects (AIA) reported that the October ABI rating was 46.1, up sharply from 43.1 in September, but still indicating a decline in demand for design services (any rating above 50 indicates an increase in billings). However, the new projects inquiry score was 58.5, a small decline from 59.1 in September.

“This news could prove to be an early signal towards a recovery for the design and construction industry,” says Kermit Baker, chief economist for AIA. “On the other hand, because we continue to get reports of architecture firms struggling in a competitive marketplace with a continued decline in commercial property values, it is far too early to think we’re out of the woods.”

The regional ABI average for the South was 46.1; for the Northeast, 44.3; for the Midwest, 43.0; and for the West, 42.8. The institutional sector reached a rating of 48.7, while the multifamily residential sector had a rating of 45.4. The commercial/industrial sector scored 41.7, and mixed-practice reached 39.1.

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