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Architecture Billings Index Drops Nearly Five Points
January decline could indicate sustained downturn in nonresidential market
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For Immediate Release |
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Washington, D.C., February 20,
2008 — Following a stretch of 3 months with an increase in demand for
design services, the Architecture Billings Index (ABI) dropped
precipitously in January. 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
January ABI rating was 50.7, down sharply from the 55.0* mark in
December (any score above 50 indicates an increase in billings),
and inquiries for new projects was 59.5.
* Every January the AIA research department uses a formula from
the Department of Commerce that re-estimates ABI data based on
seasonal factors resulting in a recalibration of recent
figures.
“Given the concerns about condition of the overall economy,
coupled with a suffering housing market, it is not surprising to
see a falloff in demand for architectural services.” said AIA
Chief Economist Kermit Baker, PhD, Hon. AIA. “This is likely
to affect firms that specialize in commercial and industrial
projects the most because businesses are expressing growing anxiety
over a potential recession and are cutting back on plans for
expansion.”
Key January ABI highlights:
• Regional averages: Northeast (63.0), South (53.9), West
(51.3), Midwest (49.3)
• Sector index breakdown: multi-family residential (55.4),
commercial / industrial (54.5), institutional (51.7), mixed
practice (51.3)
• Billings inquiries index: 59.5
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. 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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