November 19, 2014 – Headed by the continued
strength in the multi-family residential market and the emerging growth for
institutional projects, demand for design services continues to be healthy as
exhibited 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 October ABI
score was 53.7, down from a mark of 55.2 in September. This score reflects an
increase in design activity (any score above 50 indicates an increase in
billings). The new projects inquiry index was 62.7, following a mark of 64.8
the previous month.
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 October was 56.4.
“Though it has been slow in emerging, we’re finally
seeing some momentum develop in design activity for nonprofits and municipal
governments, and as such we’re seeing a new round of activity in the
institutional sector,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD.
“It will be interesting to see if and how the results of the mid-term Congressional
and gubernatorial elections impact this developing momentum.”
Key October ABI highlights:
• Regional averages: South (58.4), West (56.1), Midwest
(54.4), Northeast (47.0)
• Sector index breakdown: mixed practice (56.9),
multi-family residential (54.7), institutional (54.4), commercial / industrial
(52.3)
• Project inquiries index: 62.7
• Design contracts index: 56.4
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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