Positive Trend Continues for Architecture Billings Index

The Architecture Billings Index (ABI) saw a jump of more than a full point last month, indicating acceleration in the growth of design activity nationally.? As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12-month lead time between architecture billings and construction spending.? The American Institute of Architects (AIA) reported the July ABI score was 52.7, up from a mark of 51.6 in June. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 66.7, up dramatically from the reading of 62.6 the previous month.

“There continues to be encouraging signs that the design and construction industry continues to improve,” says Dr. Kermit Baker, the AIA’s chief economist.? “But we also hear a wide mix of business conditions all over the country, ranging from outstanding and booming to slowly improving to flat. In fact, plenty of architecture firms are reporting very weak business conditions as well, so it is premature to declare the entire sector has entered an expansion phase.”

Some key July ABI highlights included the regional averages (Northeast 54.3, South 54.2, West 51.1, Midwest (50.8) and the sector index breakdown (mixed practice 56.9, commercial/industrial 54.2, multi-family residential 53.3 and institutional 50.6). The regional and sector categories are calculated as a three-month moving average, whereas the index and inquiries are monthly numbers.