As the prognosis for the design and construction industry continues to improve, the Architecture Billings Index (ABI) is reflecting its strongest growth since November 2007. As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending.
The American Institute of Architects reported the January ABI score was 54.2, up sharply from a mark of 51.2 in December. This score reflects a strong increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 63.2, much higher than the reading of 57.9 the previous month.
“We have been pointing in this direction for the last several months, but this is the strongest indication that there will be an upturn in construction activity in the coming months,” said AIA Chief Economist, Kermit Baker, PhD. “But as we continue to hear about overall improving economic conditions and that there are more inquiries for new design projects in the marketplace, a continued reservation by lending institutions to supply financing for construction projects is preventing a more widespread recovery in the industry.”
Key January ABI highlights:
• Regional averages: Midwest (54.4), West (53.4), South (51.7), Northeast (50.3)
• Sector index breakdown: mixed-practice (54.9), multifamily residential (54.5), commercial/industrial (52.0), institutional (50.2)
• Project inquiries index: 63.2.