Architecture Billings Index Rebounds Slightly from Downturn
After consecutive months of decline, the Architecture Billings Index (ABI) is up just over two points compared to its previous mark.
The October ABI rating was 53.2, up from 51.1 in September, and inquiries for new projects was 58.1, according to the American Institute of Architects’ (AIA) report.
The ABI shows an approximate nine to twelve month lag time between architecture billings and construction spending. A score above 50 indicates an increase in billings.
“The adverse ripple effect from the tightening national credit market seems to have stabilized,” says Kermit Baker, AIA chief economist. Though the situation will still need monitoring, Baker says the increase in demand for design services is good news.
Growth is uneven across the country. “Billings growth continued to slow at firms in the Northeast and South, while business conditions have fallen for two consecutive months in the West for first time in nearly three years,” Baker says. “Billings growth picked up slightly in the Midwest, continuing to rebound from a late summer slowdown.”
Key October ABI highlights:
Regional averages: Midwest (53.3), Northeast (52.3), South (51.6), West (48.4).
Sector index breakdown: commercial / industrial (55.1), institutional (52.5), mixed practice (52.3), multi-family residential (47.0).
Billings inquiries index: 58.1.
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.