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
| Sep 21, 2010
Forecast: Existing buildings to earn 50% of green building certifications
A new report from Pike Research forecasts that by 2020, nearly half the green building certifications will be for existing buildings—accounting for 25 billion sf. The study, “Green Building Certification Programs,” analyzed current market and regulatory conditions related to green building certification programs, and found that green building remain robust during the recession and that certifications for existing buildings are an increasing area of focus.
| Sep 21, 2010
Middough Inc. Celebrates its 60th Anniversary
Middough Inc., a top ranking U.S. architectural, engineering and management services company, announces the celebration of its 60th anniversary, says President and CEO, Ronald R. Ledin, PE.
| Sep 16, 2010
Gehry’s Santa Monica Place gets a wave of changes
Omniplan, in association with Jerde Partnership, created an updated design for Santa Monica Place, a shopping mall designed by Frank Gehry in 1980.
| Sep 16, 2010
Green recreation/wellness center targets physical, environmental health
The 151,000-sf recreation and wellness center at California State University’s Sacramento campus, called the WELL (for “wellness, education, leisure, lifestyle”), has a fitness center, café, indoor track, gymnasium, racquetball courts, educational and counseling space, the largest rock climbing wall in the CSU system.
| Sep 13, 2010
Community college police, parking structure targets LEED Platinum
The San Diego Community College District's $1.555 billion construction program continues with groundbreaking for a 6,000-sf police substation and an 828-space, four-story parking structure at San Diego Miramar College.
| Sep 13, 2010
Campus housing fosters community connection
A 600,000-sf complex on the University of Washington's Seattle campus will include four residence halls for 1,650 students and a 100-seat cafe, 8,000-sf grocery store, and conference center with 200-seat auditorium for both student and community use.
| Sep 13, 2010
Second Time Around
A Building Team preserves the historic facade of a Broadway theater en route to creating the first green playhouse on the Great White Way.
| Sep 13, 2010
Palos Community Hospital plans upgrades, expansion
A laboratory, pharmacy, critical care unit, perioperative services, and 192 new patient beds are part of Palos (Ill.) Community Hospital's 617,500-sf expansion and renovation.
