Modest Rebound in Architecture Billings Index
Following a drop of nearly three points, the Architecture Billings Index (ABI) nudged up almost two points in February. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the February ABI rating was 44.8, up from a reading of 42.5 in January. This score indicates a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 52.0.
“We continue to hear that funding dedicated for construction projects in the stimulus package has not yet been awarded, resulting in a bottleneck of potential projects that could help jumpstart the economy,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “That, coupled with a persistently rigid credit market for private sector projects, is a key reason why the design and construction industry continue to suffer at near historic levels in terms of job losses.”
Key February ABI highlights:
Regional averages: Midwest (49.4), Northeast (44.1), West (43.6), South (40.7)
Sector index breakdown: multi-family residential (47.3), institutional (44.2), mixed practice (43.3), commercial / industrial (43.2)
Project inquiries index: 52.0
The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity.