Architecture Billings Index Shows Nominal Increase

AIAThe first two months of 2011 were not as strong as the final quarter of 2010, according to the Architecture Billings Index (ABI). 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 February ABI score was 50.6, up slightly from a reading of 50.0 the previous month. This score reflects a modest increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.4, compared to a mark of 56.5 in December.

“Overall demand for design services seems to be treading water over the last two months,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “We’ve been preaching patience and cautious optimism for a full recovery because there continues to be a wide range of business conditions for architecture firms that are also influenced by firm size, practice specialties and regional location. We still expect the road to recovery to move at a slow, but steady pace.”

Key February ABI highlights:

  • Regional averages: Midwest (55.3), South (50.1), West (49.1), Northeast (46.4)
  • Sector index breakdown: commercial / industrial (55.0), mixed practice (51.3), multi-family residential (49.7), institutional (48.9)
  • Project inquiries index: 56.4

ABI Jumps Two Points in December

Architecture Billings IndexThe Architecture Billings Index (ABI) jumped more than two points in December, making this the third month out of the last four that the ABI has risen. The American Institute of Architects (AIA) reported the December ABI score was 54.2, up from a reading of 52.0 the previous month. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 62.6, up slightly from a mark of 61.4 in November.

“This is more promising news that the design and construction industry is continuing to move toward a recovery,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Historically December is the most unpredictable month from a business standpoint, and therefore the most difficult month from which to interpret a trend. The coming quarter will give us a much better sense of the strength of the apparent upturn in design activity.”

Key December ABI highlights:

  • Regional averages: Northeast – 55.3, South – 54.8, Midwest – 52.9, West – 48.4
  • Sector index breakdown: multi-family residential – 60.1, commercial / industrial – 52.7, institutional – 50.6, mixed practice – 47.8
  • Project inquiries index: 62.6