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Negative Conditions Remain in Architecture Billings Index
Despite nearly three-point rise, project demand well below positive level
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For Immediate Release |
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Washington, D.C., July 23,
2008 — The Architecture Billings Index (ABI) rebounded almost three
points in June, after dropping two points the previous month.
However, this is the fifth straight month that the index has
remained below the 50 threshold, indicating that business levels at
U.S architecture firms continue to deteriorate. 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 June ABI rating was 46.1, up from the
43.4 mark in May (any score above 50 indicates an increase in
billings). The inquiries for new projects score was 51.8.
“Very recently, the Midwest has been showing the best regional
conditions,” said AIA Chief Economist Kermit Baker, PhD, Hon.
AIA. “But otherwise, these numbers are a continuation of weak
conditions in the nonresidential construction sector. Given that
inquiries for new project work have not seen much improvement,
it’s likely we are several months away from a
turnaround.”
Key June ABI highlights:
• Regional averages: Midwest (51.0), South (49.9), Northeast
(40.7), West (36.1)
• Sector index breakdown: institutional (51.6), commercial /
industrial (45.8), mixed practice (44.1) multi-family residential
(37.9)
• Project inquiries index: 51.8
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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