Thursday, March 25, 2010

AIA Billing Index Shows Slight Increase in Demand

According to the American Institute of Architects, the Architecture Billings Index (ABI) moved slightly higher in February. The index for last month was 44.8, compared to 42.5 in January. The February index indicates a continued decline in demand for design services. Any reading above 50 indicates an increase in billings.

The ABI is widely viewed as a leading economic indicator of construction activity. The ABI tyoically reflects an approximate nine to 12 month lag time between architecture billings and construction spending.

"We continue to hear that funding dedicated for construction projects in the stimulus package has not yet been awarded, resulting in a bottleneck of potential projects that could help jump-start the economy," said Kermit Baker, PhD, Hon. AIA, chief economist at the American Institute of Architects, which compiles the ABI. "That, coupled with a persistently rigid credit market for private sector projects, is a key reason why the design and construction industry continue to suffer at near historic levels in terms of job losses." The AIA conducts a monthly survey of architectural firms to build the index.

Key February 2010 ABI highlights:

Regional averages: Midwest (49.4), Northeast (44.1), West (43.6), South (40.7)

Sector index breakdown: multi-family residential (47.3), institutional (44.2), mixed practice (43.3), commercial / industrial (43.2)

About the Architecture Billings Index

The Architecture Billings Index (ABI) is a diffusion index derived from the monthly Work-on-the-Boards survey, conducted by the AIA Economics & Market Research Group. The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months. The indexes are developed from the monthly Work-on-the-Boards survey panel where participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.


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