Architecture Billings Index Shows No Significant Improvement

June 25, 2009

The Architecture Billings Index (ABI), which reflects the nine to 12 month lag time between architecture billings and construction spending, currently shows that an economic recovery has stalled, despite the recent moderation in the downturn in design services billings.

“The design and construction marketplace is extremely competitive right now,” says Kermit Baker, chief economist at the American Institute of Architects (AIA). “Prospective clients are casting a wider net, causing numerous firms to bid for the same project, which is why the high level of inquires is not necessarily translating into additional billings for project work at many firms.”

The AIA reported that in May, the ABI rating was 42.9, nearly identical to the 42.8 mark in April, and which still indicates an overall decline in demand for design services (scores below 50 indicate decreases in billings). Additionally, the new projects inquiry score was 55.2, the third straight month with a score in the mid-50s.

The May ABI also showed regional averages for the Northeast at 48.3, for the Midwest at 41.5, for the South at 41.3, and for the West at 39.4. Multi-family residential had a rating of 45.5, mixed practice 44.5, commercial/industrial 43.1, and institutional was at 38.0.

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