Following a modest two-month recovery in the level of demand for design services, the Architecture Billings Index (ABI) again turned negative last month.
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 March ABI score was 48.8, down sharply from a mark of 50.7 in February. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.9, up from the reading of 56.8 the previous month.
With this release, 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 contacts in March was 48.2.
“This protracted softening in demand for design services is a bit of a surprise given the overall strength of the market the last year and a half,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Hopefully, some of this can be attributed to severe weather conditions over this past winter. We will have a better sense if there is a reason for more serious concern over the next couple of months.”
Key March ABI highlights:
- Regional averages: South (52.8),West (50.7), Northeast (46.8), Midwest (46.6)
- Sector index breakdown: multi-family residential (52.1), commercial / industrial (49.6), institutional (49.0), mixed practice (47.6)
- Project inquiries index: 57.9
- Design contracts index: 48.2
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
Related Stories
Architects | May 8, 2018
WeWork names BIG’s Ingels as its Chief Architect
He’ll be plenty busy working with a company that has aggressive growth ambitions.
Architects | May 8, 2018
Illinois Office of Tourism unveils new Frank Lloyd Wright Trail
The trail stretches from Rockford to Springfield.
Architects | May 3, 2018
Designing innovative solutions for chronic homelessness
What’s stopping us from creating more Permanent Supportive Housing?
Architects | Apr 27, 2018
4 reasons to pursue speaking engagements
We found speaking engagements were among the top ten marketing techniques that AEC firms employ.
Office Buildings | Apr 19, 2018
From fitness to bowling alleys: How commercial office buildings are differentiating themselves through amenities
Here are five ways that amenities can help developers and building owners attract and secure tenants by appealing to their inhabitants.
Architects | Apr 19, 2018
Perkins Eastman and Dougherty announce intent to merge
Combined practice will create expanded capabilities for K-12, higher education projects in California.
Architects | Apr 17, 2018
Cannon Design expects merger with gkkworks will help streamline its deliveries
The combined firm reinforces its presence in the western U.S.
Architects | Apr 16, 2018
Is the AEC industry ready to shake off its retrograde image?
Technology has been and always will be perceived as a source for wonder and worry.
Architects | Apr 10, 2018
HOK names a physician as its new Chief Medical Officer
Dr. Andrew Ibrahim will collaborate with the firm’s medical planning and design teams.
Architects | Apr 5, 2018
AIA grants $100,000 to four Upjohn Research Initiative projects
The purpose of the grant is to provide base funds for applied research projects that will advance the design profession’s knowledge and practice.