Architectural Billing Index is positive for first time in two years

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For the first time since January 2008, the Architecture Billings Index (ABI) indicated a growth in design activity in September, increasing for the fourth straight month. 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 September ABI score was 50.4, up from a reading of 48.2 the previous month. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was also up sharply, moving from 54.6 to 62.3 – the highest mark since July 2007.

“This is certainly encouraging news, but we will need to see consistent improvement over the next few months in order to feel comfortable about the state of the design and construction industry,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “While there has been increasing demand for design services, it is happening at a slow rate and there continue to be other obstacles that are preventing a more accelerated recovery. Still, the strong upturn in design activity in the commercial and industrial sector certainly suggests that this upturn can possibly be sustained.”

Key September highlights: 

— Regional averages: Northeast (56.7), Midwest (51.0), South (47.0), West (44.5)

— Sector index breakdown: commercial / industrial (56.3), institutional (47.9), multi-family residential (47.0), mixed practice (44.2)

— Project inquiries index: 62.3

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. Read More.

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