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Architecture Billings Index Rebounds to End 2014 on Solid Footing


 

Washington, D.C. — Jan. 21, 2015 — There were 10 out of 12 months of increasing demand for design services in 2014, and the Architecture Billings Index (ABI) points to a healthy outlook for the nonresidential construction industry.

As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the December ABI score was 52.2, up from a mark of 50.9 in November. This score reflects an increase in design activity (any score above 50 indicates an increase in billings).

The new projects inquiry index was 58.2, following a mark of 58.8 the previous month. Design contracts posted a mark of 49.9, after a 54.9 score in November.

“Business conditions continue to be the strongest at architecture firms in the South and the Western regions,” said AIA Chief Economist Kermit Baker. “Particularly encouraging is the continued solid upturn in design activity at institutional firms, since public sector facilities were the last nonresidential building project type to recover from the downturn.”

Some key December ABI highlights:

• Regional averages: South (56.8), West (52.9), Midwest (50.8), Northeast (45.5)

• Sector index breakdown: multi-family residential (55.7), institutional (52.5), commercial / industrial (51.2), mixed practice (45.8)

• Project inquiries index: 58.2

• Design contracts index: 49.9

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

The ABI, produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately 9- to 12-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.

 





Contact FacilitiesNet Editorial Staff »   posted on: 1/28/2015


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