After a fall rebound from a summer slowdown, the Architecture Billings Index (ABI) recorded another healthy score in December. As an indicator of construction activity, the ABI shows an approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the December ABI rating was 55.4, up a fraction from the 55.3 mark in November (any score above 50 indicates an increase in billings), and inquiries for new projects was 58.1.
The stretch of 34 straight months with a positive score is the longest run in the history of the survey that began in 1995, eclipsing the positive scores that continued from April 1998 to December 2000.
“As the country braces for a possible recession in 2008, there will likely be an easing in demand for design services.” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “While that is a natural reaction, it is important to note that with positive conditions for architecture billings going back over two years nonresidential construction is expected to one of the sources of strength in an otherwise uneven economy.”
Key December ABI highlights:
Regional averages: Northeast (63.6), South (57.1), Midwest (51.5), West (51.3)
Sector index breakdown: commercial / industrial (62.1), mixed practice (58.7), institutional (53.8), multi-family residential (46.2)
Billings inquiries index: 58.1
About the AIA Architecture Billings Index
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. The diffusion indexes contained in the full report are derived from a monthly survey 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. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.
About The American Institute of Architects
For over 150 years, members of The American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. AIA members have access to the right people, knowledge, and tools to create better design, and through such resources and access, they help clients and communities make their visions real. www.aia.org