AIA architectural index suggest shaky recovery

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The American Institute of Architects (AIA) reports the Architecture Billings Index (ABI) rose almost two full points in July. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending.

The July ABI score was 47.9, up from a reading of 46.0 the previous month. This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index dropped substantially from 57.7 to 53.1.

“Business conditions at design firms remain quite volatile,” said AIA Chief Economist Kermit Baker. “While this recent uptick is encouraging, this state of the industry is likely to persist for a while as we continue to receive a mixed bag of feedback on the condition of the design market from improving to flat to being paralyzed by uncertainty.”

◦Regional averages: South (47.9), Northeast (47.2), Midwest (46.7), West (45.2)

◦Sector index breakdown: commercial / industrial (50.4), institutional (47.9), multi-family residential (47.5), mixed practice (42.9)

◦Project inquiries index: 53.1

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.

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