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Architecture Billings Index Drops to All Time Low
For the second month in a row, the Architecture Billings Index (ABI) posted its lowest level since the survey began in 1995.
The November ABI rating was 34.7, down from the 36.2 mark in October, according to the American Institute of Architects’ (AIA) report. The inquiries for new projects score was 38.3, also a historic low point. Any score above 50 indicates an increase in billings.
As an economic indicator of construction activity, the ABI shows an approximate nine to twelve month lag time between architecture billings and construction spending.
“With mounting job losses, declines in retail sales, and travel cut-backs the need for new commercial facilities has dropped considerably recently,” says Kermit Baker, AIA chief economist. “What’s just as troubling is that the institutional sector --schools, hospitals and public buildings -- is also beginning to react to tighter credit conditions and a weakening economy.”
Key November ABI highlights:
Regional averages: Northeast (39.5), South (36.8), West (33.5), Midwest (31.4)
Sector index breakdown: mixed practice (44.5), institutional (40.8), multi-family residential (30.0), commercial / industrial (26.7)
Project inquiries index: 38.3
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.