The American Institute of Architects (AIA) reported the July ABI rating was 51.8 (any score above 50 indicates an increase in billings), just above the 49.2 mark in June.
The ABI is an economic indicator of nonresidential construction activity based on the approximately six to nine month lag time between architecture billings and construction spending.
The uptick can be attributed to growth at commercial/industrial architecture firms, according to AIA. The latest figures continue the pattern that suggests a strong outlook in the commercial construction market well into 2007.
“For the last few months the index has been close to the break-even point on both the positive and negative side,” says Kermit Baker, AIA chief economist. “We will continue to monitor for signs of a pending design slowdown, but for now these figures are in line with our long range outlook for a healthy nonresidential sector.”
Key July ABI highlights:
• Regional averages: West (52.7), Northeast (51.6), South (51.4), Midwest (48.2)
• Sector index breakdown: commercial / industrial (58.4), institutional (52.8), residential (46.8), mixed (45.2)
• Billings inquiries index: 64.0, up from the 56.7 score in June
“The July data is quite encouraging with respect to the health and sustainability of the nonresidential construction upcycle that is so important to many of our companies,” says Banc of America senior equity research analyst Robert McCarthy “In particular, we find the strong rebound in overall billing inquiries to above 60 an important positive data point as it is a vital leading indicator for continued nonresidential construction strength moving into 2007.”
The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group.
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.
