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Architecture Billings Index Drops Two Points
Business conditions weakest in the West
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For Immediate Release |
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Washington, D.C., June 18,
2008 — Following a slight rise in April, the Architecture Billings
Index (ABI) fell two points in May, prolonging the downturn in
design activity at architecture firms. 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 May ABI rating was 43.4, down from the 45.5 mark in
April (any score above 50 indicates an increase in billings). The
inquiries for new projects score was 46.5.
“With the exception of the institutional sector –
projects like government buildings, schools and hospitals –
we’ve seen a dramatic contraction in design activity in recent
months,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA.
“Right now things are especially hard in the West and in the
commercial and multifamily residential sectors. This weakness in
design activity can be expected to produce a contraction in these
construction sectors later this year and into 2009.”
Key May ABI highlights:
• Regional averages: Midwest (51.9), South (47.0), Northeast
(41.7), West (36.3)
• Sector index breakdown: institutional (53.9), mixed practice
(45.3) commercial / industrial (39.7) multi-family residential
(36.8)
• Project inquiries index: 46.5
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. By using sustainable design practices, materials, and
techniques, AIA architects are uniquely poised to provide the
leadership and guidance needed to provide solutions to address
climate change. AIA architects walk the walk on sustainable design.
Visit www.aia.org/walkthewalk.
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