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Architecture Billings Index Shows Robust Conditions Ahead for Construction Industry

Wednesday, October 22, 2014   (0 Comments)

Architecture Billings Index Shows Robust Conditions Ahead for Construction Industry

Demand for Institutional projects surges in second half of year

Des Moines, IA – October 22, 2014 – With all geographic regions and building project sectors showing positive conditions, there continues to be a heightened level of demand for design services signaled in the latest Architecture Billings Index (ABI).  As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending.  The American Institute of Architects (AIA) reported the September ABI score was 55.2, up from a mark of 53.0 in August.  This score reflects an increase in design activity (any score above 50 indicates an increase in billings).  The new projects inquiry index was 64.8, following a mark of 62.6 the previous month.

VIDEO: Click here for brief overview of recent ABI conditions from AIA Chief Economist

The AIA has added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings.  The score for design contracts in August was 56.8.

“It is exciting to see another consecutive month of an increase in the ABI,” said Jessica Reinert, Hon. AIA Iowa, CAE, IOM, Executive Director of AIA Iowa. “The strong demand for projects like apartment buildings and condominiums has been a main driver in the market but recently we are seeing a resurgent in the Institutional sector which is leading to broader growth for the industry.”

Key September ABI highlights:

  • Regional averages: South (55.3) , Midwest (55.1), West (54.2), Northeast (51.0)
  • Sector index breakdown: multi-family residential (55.3), institutional (54.9), mixed practice (53.8), commercial / industrial (50.8)
  • Project inquiries index: 64.8
  • Design contracts index: 56.8

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

About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is 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 as compared to the prior month, and the results are then compiled into the ABI.  These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the recently released White Paper, Designing the Construction Future: Reviewing the Performance and Extending the Applications of the AIA’s Architecture Billings Index on the AIA web site.

About The American Institute of Architects
Founded in 1857, members of the American Institute of Architects consistently work to create more valuable, healthy, secure, and sustainable buildings, neighborhoods, and communities. Through nearly 300 state and local chapters, the AIA advocates for public policies that promote economic vitality and public well being.  Members adhere to a code of ethics and conduct to ensure the highest professional standards. The AIA provides members with tools and resources to assist them in their careers and business as well as engaging civic and government leaders, and the public to find solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.

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For interviews please contact Jessica Reinert at AIA Iowa, (515) 244-7502, or e-mail her at jreinert@aiaiowa.org.

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