Architecture Billings Index slips consecutive months for first time since 2012

“This recent backslide should act as a warning signal,” said AIA Chief Economist, Kermit Baker.

October 19, 2016 |

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For the first time since the summer of 2012, the Architecture Billings Index (ABI) posted consecutive months of a decline in demand for design services. 

The American Institute of Architects (AIA) reported the September ABI score was 48.4, down from the mark of 49.7 in the previous month. This score reflects a decrease in design services (any score above 50 indicates an increase in billings).  The new projects inquiry index was 59.4, down from a reading of 61.8 the previous month.

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. 

“This recent backslide should act as a warning signal,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD.  “But this drop-off in demand could be continued hesitancy in the marketplace to move forward on projects until the presidential election is decided. The fact that new work coming into architecture continues to slowly increase suggests that billings will resume their growth in the coming months”

Key September ABI highlights:
• Regional averages: South (53.4), Midwest (50.1), West (49.5), Northeast (44.0)
• Sector index breakdown:  commercial / industrial (50.4), mixed practice (49.8), institutional (49.0), multifamily residential (48.8)
• Project inquiries index: 59.4
• Design contracts index: 51.4

The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

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