Architecture Billings Index Shows Robust Conditions Ahead
for Construction Industry
Washington, D.C. – October 22, 2014 – With all
geographic regions and building project sectors showing positive conditions,
there continues to be a heightened level of demand for design services signaled
in the latest Architecture Billings Index (ABI). 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 (AIA) reported the September ABI score was
55.2, up from a mark of 53.0 in August. This score reflects an increase in
design activity (any score above 50 indicates an increase in billings). The new
projects inquiry index was 64.8, following a mark of 62.6 the previous month.
VIDEO: Click here for brief overview of recent ABI conditions from AIA Chief Economist
The AIA has added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contracts in September was 56.8.
“Strong demand for apartment buildings and condominiums has been one of the main drivers in helping to keep the design and construction market afloat in recent years,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “There continues to be a healthy market for those types of design projects, but the recently resurgent Institutional sector is leading to broader growth for the entire construction industry.”
Key September ABI highlights:
• Regional averages: South (55.3) , Midwest (55.1), West
(54.2), Northeast (51.0)
• Sector index breakdown: multi-family residential
(55.3), institutional (54.9), mixed practice (53.8), commercial / industrial
(50.8)
• Project inquiries index: 64.8
• Design contracts index: 56.8
The regional and sector categories are calculated
as a 3-month moving average, whereas the national index, design contracts and
inquiries are monthly numbers.
About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics
& Market Research Group, is a leading economic indicator that provides
an approximately nine to twelve month glimpse into the future of nonresidential
construction spending activity. The diffusion indexes contained in the full
report are derived from a monthly “Work-on-the-Boards” survey that is sent to a
panel of AIA member-owned firms. Participants are asked whether their billings
increased, decreased, or stayed the same in the month that just ended as
compared to the prior month, and the results are then compiled into the
ABI. These monthly results are also seasonally adjusted to allow for
comparison to prior months. The monthly ABI index scores are centered around
50, with scores above 50 indicating an aggregate increase in billings, and
scores below 50 indicating a decline. The regional and sector data are
formulated using a three-month moving average. More information on the ABI and
the analysis of its relationship to construction activity can be found in the
recently released White Paper, Designing the Construction Future:
Reviewing the Performance and Extending the Applications of the AIA’s
Architecture Billings Index on the AIA
web site.
About The American Institute of Architects
Founded in 1857, members of the American Institute of
Architects consistently work to create more valuable, healthy, secure, and
sustainable buildings, neighborhoods, and communities. Through nearly 300 state
and local chapters, the AIA advocates for public policies that promote economic
vitality and public well being. Members adhere to a code of ethics and
conduct to ensure the highest professional standards. The AIA provides members
with tools and resources to assist them in their careers and business as well
as engaging civic and government leaders, and the public to find solutions to
pressing issues facing our communities, institutions, nation and world. Visit www.aia.org
Source: AIA
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