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Washington, D.C. – Oct. 22, 2014 – With all geographic regions and building project sectors showing positive conditions, there continues to be a heightened level of demand for design services signaled in the latest Architecture Billings Index (ABI).
As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lead time between architecture billings and construction spending.
The American Institute of Architects (AIA) reported that the September ABI score was 55.2, up from a mark of 53.0 in August. This score reflects an increase in design activity (any score above 50 indicates an increase in billings). The new projects inquiry index was 64.8, following a mark of 62.6 the previous month.
“Strong demand for apartment buildings and condominiums has been one of the main drivers in helping to keep the design and construction market afloat in recent years,” said AIA Chief Economist Kermit Baker. "There continues to be a healthy market for those types of design projects, but the recently resurgent institutional sector is leading to broader growth for the entire construction industry.”
Here are some key September ABI highlights:
• Regional averages: South (55.3), Midwest (55.1), West (54.2), Northeast (51.0).
• Sector index breakdown: multi-family residential (55.3), institutional (54.9), mixed practice (53.8), commercial/industrial (50.8).
• Project inquiries index: 64.8.
• Design contracts index: 56.8.
The regional and sector categories are calculated as a three-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 nine- 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.