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Demand Softens, but Outlook for Architecture Billings Index Remains Positive

Wednesday, December 17, 2014   (0 Comments)

Demand Softens, but Outlook for Architecture Billings Index Remains Positive

Multi-family residential projects continue to set pace


Des Moines, Iowa – December 17, 2014 – Buoyed by sustained demand for apartments and condominiums, coupled with state and local governments moving ahead with delayed public projects, the Architecture Billings Index (ABI) has been positive for seven consecutive months.  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 November ABI score was 50.9, down from a mark of 53.7 in October. This score reflects a slight increase in design activity (any score above 50 indicates an increase in billings).  The new projects inquiry index was 58.8, following a mark of 62.7 the previous month.

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 November was 54.9.

“Demand for design services has somewhat slowed from the fast pace of the summer months but sectors are still seeing progress,” said AIA Iowa Executive Director, Jessica Reinert, Hon. AIA Iowa, CAE, IOM. “Firms are looking forward to 2015 and taking this time to find quality partners for projects and competent staff to assist with projects on the boards.”

Key November ABI highlights:

  • Regional averages: South (57.9), West (52.7), Midwest (49.8), Northeast (46.7)
  • Sector index breakdown: multi-family residential (56.8), mixed practice (52.6), institutional (51.3), commercial / industrial (50.6)
  • Project inquiries index: 58.8
  • Design contracts index: 54.9

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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