ABI Turns Positive After Four Monthly Declines

On the heels of a period of weakness in design activity, the Architecture Billings Index (ABI) took a sudden upturn in August.
September 23, 2011

 

On the heels of a period of weakness in design activity, the Architecture Billings Index (ABI) took a sudden upturn in August. 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 August ABI score was 51.4, following a very weak score of 45.1 in July. 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 56.9, up sharply from a reading of 53.7 the previous month.
 
"Based on the poor economic conditions over the last several months, this turnaround in demand for design services is a surprise," said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. "Many firms are still struggling, and continue to report that clients are having difficulty getting financing for viable projects, but it's possible we've reached the bottom of the down cycle."
Key August ABI highlights:
  • Regional averages: Midwest (49.0), South (47.4), West (47.4), Northeast (46.5)
  • Sector index breakdown: mixed practice (50.9), institutional (48.5), commercial / industrial (46.0),  multi-family residential (44.8)
  • Project inquiries index: 56.9 BD+C 
         
 

Comments on: "ABI turns positive after four monthly declines"

Comments

I wonder how much of this up

I wonder how much of this up turn in the index can be associated with Government end of year spending? Every August and September in my firm we see a big upturn in project deliveries as well as fee proposal due to Government end of year spending. Any upturn is good news but the timing of this one seems suspicious.