Architecture Billings Index Slips, Overall Outlook Remains Positive

by Jonathan McGaha | September 20, 2016 12:00 am

On the heels ofsix out of seven months of increasing levels of demand for design services, the Architecture Billings Index[1] (ABI) fell just below the positive mark. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects[2] (AIA) reported the August ABI score was 49.7, down from the mark of 51.5 in the previous month. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 61.8, up sharply from a reading of 57.5 the previous month.

“This is only the second month this year where demand for architectural services has declined and it is only by a fraction of a point,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Given the solid numbers for new design contracts and project inquiries, it doesn’t appear that this is the beginning of a broader downturn in the design and construction industry.”

Key August ABI highlights:

• Regional averages: South (55.2), Midwest (52.8), West (49.0), Northeast (44.9)
• Sector index breakdown: mixed practice (51.8), multifamily residential (50.9), commercial/industrial (50.8), institutional (50.7)
• Project inquiries index: 61.8
• Design contracts index: 52.7

The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

Source URL: https://www.metalarchitecture.com/news/industry-news/architecture-billings-index-slips-overall-outlook-remains-positive/

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