Architecture Billings Index Shows Minimal Improvement

10/26/2009 |

As the nonresidential construction industry continues to struggle, the Architecture Billings Index (ABI), which reflects the approximate 9 to 12 month lag time between architecture billings and construction spending, showed a nominal improvement last month. The American Institute of Architects (AIA) reported the September ABI rating was 43.1, up slightly from 41.7 in August. This score, which is a leading economic indicator of construction activity, indicates a decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 59.1, its highest level since September 2007.

“The fact that inquires for new project are so high is an encouraging sign that we may be seeing new construction activity entering the design phase,” says AIA Chief Economist Kermit Baker. “But that optimism has to be tempered by the fact that the marketplace is so competitive that firms are broadening their search for new projects, thereby inflating the number of inquiries that they are reporting. However, some larger stimulus-funded building activity should be coming online over the next several months, partially offsetting the steep decline in private commercial construction.”

Other September highlights include a regional ABI of 47.2 for the Northeast, 43.0 for the Midwest, 42.7 for the South, and 36.0 for the West. Multifamily residential had a September ABI of 45.1; institutional, 43.9; commercial/industrial, 39.0; and mixed-practice, 36.3.

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