AIA reports drop in Architectural Billings Index

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Following the first negative reading in five months, the Architecture Billings Index (ABI) has had a significant drop in May.  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 American Institute of Architects (AIA) reported the May ABI score was 45.8, following a mark of 48.4 in April.  This score reflects a sharp decrease in demand for design services (any score above 50 indicates an increase in billings).  The new projects inquiry index was 54.0, down slightly from mark of 54.4 the previous month.

“For the second year in a row, we’re seeing declines in springtime design activity after a healthy first quarter.  Given the ongoing uncertainly in the economic outlook, particularly the weak job growth numbers in recent months, this should be an alarm bell going off for the design and construction industry,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA.

“The commercial/industrial sector is the only one recording gains in design activity at present, and even this sector has slowed significantly. Construction forecasters will have to reassess what conditions will look like moving forward.”

Key May ABI highlights:

      • Regional averages: Northeast (48.6), West (47.6), Midwest (46.8), South (46.1)
      • Sector index breakdown: commercial / industrial (50.7), multi-family residential (48.9),
      • institutional (45.6), mixed practice (41.5)
      •   Project inquiries index: 54.0

The regional and sector categories are calculated as a 3-month moving average, whereas the index and inquiries are monthly numbers.  Read More.

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