Architectural Billings Point to Improving Economic Conditions
Architectural billings accelerated to their strongest pace in nearly three years in October, with all U.S. regions logging positive growth for the first time since the start of the Great Recession, according to the American Institute of Architects (AIA) Architectural Billing Index (ABI).
AIA reported an October score of 52.8, up from 51.6 in September. Any score above 50 indicates an increase in billings.
With a score of 52.8, the South led all regions, followed by the Northeast (52.6), West (51.8), and Midwest (50.8). Both the Midwest and Northeast were in negative territory the previous month, with scores of 49.5 and 47.2, respectively.
Among market sectors, multi-family residential (59.6) continued to fare best, followed by mixed practice (52.4), institutional (51.4) and commercial/industrial (48.0). Only firms specializing in commercial/industrial reported weakness in October, according to AIA.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lag time between architectural billings and construction spending.
“With three straight monthly gains – and the past two being quite strong – it’s beginning to look like demand for design services has turned the corner,” says AIA Chief Economist, Kermit Baker. “With 2012 winding down on an upnote, and with the national elections finally behind us, there is a general sense of optimism.
“However, this is balanced by a tremendous amount of anxiety and uncertainty in the marketplace, which likely means that we’ll have a few more bumps before we enter a full-blown expansion,” says Baker.