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More Negative Conditions for Architecture Billings Index
Institutional market continues to be lone bright spot in non-residential sector
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For Immediate Release |
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Washington, D.C., September 17,
2008 — While conditions have improved somewhat for three consecutive
months, the Architecture Billings Index (ABI) continues to point to
unfavorable conditions for the nonresidential construction market.
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 August ABI rating was
47.6, up slightly from the 46.8 mark in July (any score above 50
indicates an increase in billings). The inquiries for new projects
score was 52.4. There is, however, continued demand for projects
such as schools, hospitals and government buildings with the
institutional category of the ABI remaining positive going all the
way back to 2004.
“The recent figures over the last quarter are no real surprise
given the overall state of the economy,” said AIA Chief
Economist Kermit Baker, PhD, Hon. AIA. “The news for
industries affected by the construction industry is that looking
back 12 to eighteen months, the numbers were extremely healthy.
That means many of those projects are currently in or entering the
construction phase so there should still be demand for labor and
building materials, and later on interiors, computer equipment and
the like.”
Key August ABI highlights:
• Regional averages: Midwest (49.4), West (49.2), Northeast
(45.2), South (45.0)
• Sector index breakdown: institutional (52.2), commercial /
industrial (47.5), mixed practice (44.8) multi-family residential
(40.8)
• Project inquiries index: 52.4
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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