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Architecture Billings Index Points to Major Downturn in Commercial Construction
Falls to lowest level since 2001 with nearly 9-point drop off
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For Immediate Release |
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Washington, D.C., March 19,
2008 — Reflecting the deteriorating conditions in the housing market
and overall economy, the Architecture Billings Index (ABI) tumbled
almost nine points in February. As a leading economic indicator of
construction activity, the ABI shows an approximate nine to twelve
month lag time between architecture billings and construction
spending. The American Institute of Architects (AIA) reported the
February ABI rating fell to 41.8, its lowest level since October
2001, and down dramatically from the 50.7 mark in January (any
score above 50 indicates an increase in billings). The inquiries
for new projects score was 54.3.
“This is a clear indication that there could be tougher times
ahead for design firms and a noticeable slowdown in commercial
construction projects coming online in the foreseeable
future,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA.
“Interestingly enough, we have also had some survey members
reporting that their business is in great shape from a billings and
demand standpoint. The one bright spot continues to be the
institutional sector with continued positive conditions for
construction projects such as schools, hospitals and government
buildings.”
Key February ABI highlights:
• Regional averages: Northeast (51.5), South (48.3), West
(46.3), Midwest (42.6)
• Sector index breakdown: institutional (54.9), multi-family
residential (46.6), mixed practice (43.9), commercial / industrial
(40.6)
• Billings inquiries index: 54.3
About the AIA Architecture Billings
Index
The Architecture Billings Index is derived from a monthly
“Work-on-the-Boards” survey and produced by the AIA
Economics & Market Research Group. Based on a comparison of
data compiled since the survey’s inception in 1995 with
figures from the Department of Commerce on Construction Put in
Place, the findings amount to a leading economic indicator that
provides an approximately nine to twelve month glimpse into the
future of nonresidential construction activity. 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.
About The American Institute of
Architects
For over 150 years, members of The American Institute of Architects
have worked with each other and their communities to create more
valuable, healthy, secure, and sustainable buildings and
cityscapes. AIA members have access to the right people, knowledge,
and tools to create better design, and through such resources and
access, they help clients and communities make their visions real.
www.aia.org
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