Architecture Billings hold steady after two months of improving conditions
For immediate release: Washington, D.C. – February 23, 2011 – After showing positive momentum during the fourth quarter of 2010, the Architecture Billings Index (ABI) slipped almost four points in January. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the January ABI score was 50.0, down from a reading of 53.9 the previous month. This score reflects stable demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.5, down sharply from a mark of 61.6 in December.
* Every January the AIA research department updates the seasonal factors used to calculate the ABI, resulting in a recalibration of recent ABI values.
“This slowdown is indicative of what is likely to be a very gradual improvement in business conditions at architecture firms for the better part of this year,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “We’ve been taking a cautiously optimistic approach for the last several months and there is no reason at this point to change that outlook. There are still too many firms that continue to see weak market conditions to expect a dramatic increase in the demand for services in the design and construction industry. ”
Key January ABI highlights:
- Regional averages: Midwest (56.4), South (51.5), Northeast (50.4), West (47.3)
- Sector index breakdown: commercial / industrial (54.6), multi-family residential (53.7), institutional (51.3), mixed practice (48.7)
- Project inquiries index: 61.6
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 White Paper Architecture Billings as a Leading Indicator of Construction: Analysis of the Relationship Between a Billings Index and Construction Spending on the AIA web site.
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. By using sustainable design practices, materials, and techniques, AIA architects are uniquely poised to provide the leadership and guidance needed to provide solutions to address climate change. AIA architects walk the walk on sustainable design. Visit www.aia.org. Twitter: https://twitter.com/AIA_Media