Headed by the continued strength in the multifamily residential market and the emerging growth for institutional projects, demand for design services continues to be healthy, as exhibited in the latest Architecture Billings Index (ABI).
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 October ABI score was 53.7, down from a mark of 55.2 in September. This score reflects an increase in design activity (any score above 50 indicates an increase in billings). The new projects inquiry index was 62.7, following a mark of 64.8 the previous month.
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 contracts in October was 56.4.
“Though it has been slow in emerging, we’re finally seeing some momentum develop in design activity for nonprofits and municipal governments, and as such we’re seeing a new round of activity in the institutional sector,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “It will be interesting to see if and how the results of the mid-term Congressional and gubernatorial elections impact this developing momentum.”
Key October ABI highlights:
• Regional averages: South (58.4), West (56.1), Midwest (54.4), Northeast (47.0)
• Sector index breakdown: mixed practice (56.9), multi-family residential (54.7), institutional (54.4), commercial / industrial (52.3)
• Project inquiries index: 62.7
• Design contracts index: 56.4
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 website.
Related Stories
| Aug 7, 2014
Office Sector Giants: ‘Flex’ reigns supreme in hot office construction market [2014 BD+C Giants 300 Report]
The adage “doing more with less” has become a byword for many businesses since the Great Recession, and clients are trying to maximize every precious inch, according to BD+C's 2014 Giants 300 Report.
| Aug 6, 2014
BIG reinvents the zoo with its 'Zootopia' natural habitat concept [slideshow]
Bjarke Ingels’ firm is looking to improve the 1960s-designed Givskund Zoo in Denmark by giving the animals a freer range to roam.
| Aug 6, 2014
The Dead Prize: A new award to recognize poorly designed buildings
If the film industry has its Razzie awards, architecture will have its Dead Prize, created by Architecture for Humanity co-founder Cameron Sinclair to recognize projects that actively harm the planet.
| Aug 6, 2014
25 projects win awards for design-build excellence
The 2014 Design-Build Project/Team Awards showcase design-build best practices and celebrate the achievements of owners and design-build teams in nine categories across the spectrum of horizontal and vertical construction.
| Aug 6, 2014
Multifamily Sector Giants: Younger consumers, Sunbelt renaissance energize multifamily housing [2014 Giants 300 Report]
Multifamily housing construction is expected to remain relatively strong throughout 2014. Starts picked up in 2013, with completions due to catch up this year, finally approaching pre-recession levels, according to BD+C's 2014 Giants 300 Report.
| Aug 5, 2014
Risk scanning: A new tool for managing healthcare facilities
Using well-known risk analytics applied to pre-existing facility data, risk scanning can provide a much richer view of facility condition more consistent with actual management decision making.
| Aug 5, 2014
Shigeru Ban-designed Aspen Art Museum will open doors to public this week
After 18 month of planning and construction, the museum will open its new Shigeru Ban-designed facility to the public on August 9.
| Aug 5, 2014
Will driverless cars kill the parking structure?
A report from Deloitte highlighted how driverless cars could dramatically alter car ownership in the future, pushing the pendulum from ownership to rentals and ride sharing.
| Aug 5, 2014
K-12 School Sector Giants: Pent-up demand finally produces movement in schools market [2014 Giants 300 Report]
After a long period of anemic performance, with growth mostly driven by renovations and additions, the K-12 sector is showing renewed interest in new construction, according to BD+C's 2014 Giants 300 Report.
| Aug 4, 2014
Jean Nouvel commissioned to design Islam Museum next to WTC
El-Gamal's plans has been dubbed controversial by many industry professionals.
