Following consistently increasing demand for design services throughout most of 2013, the Architecture Billings Index (ABI) has posted its first consecutive months of contraction since May and June of 2012.
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 December ABI score was 48.5, down from a mark of 49.8 in November. This score reflects a decrease in design services (any score above 50 indicates an increase in billings).
The new projects inquiry index was 59.2, up from the reading of 57.8 the previous month.
“What we thought last month was an isolated dip now bears closer examination to see what is causing the slowdown in demand for architectural services,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “It is possible that some of this can be attributed to the anxiety in the marketplace caused by the shutdown of the federal government, but it will be important to see how business conditions fare through the first quarter of the new year when we no longer have end of the year issues to deal with.”
Key December ABI highlights:
• Regional averages: West (53.2), South (51.2), Midwest (47.0), Northeast (42.8)
• Sector index breakdown: multi-family residential (53.8), mixed practice 51.0), commercial / industrial (47.1), institutional (44.8)
• Project inquiries index: 59.2
Note: The regional and sector categories are calculated as a 3-month moving average, whereas the index 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 White Paper Architecture Billings as a Leading Indicator of Construction: Analysis of the Relationship Between a Billings Index and Construction Spending on the AIA website.
Related Stories
Architects | Jun 28, 2016
5 easy ways architects can increase their profits
Whitehorn Financial Managing Principal Steve Whitehorn offers effective ways to recoup lost revenue, including a few strategies that capitalize on recent changes to the federal tax code.
AEC Tech | Jun 27, 2016
If ‘only the paranoid survive,’ what does it take to thrive?
“Sooner or later, something fundamental in your business world will change.” The late Andrew Grove (1936-2016), Co-founder of tech giant Intel Corp., lived by these words.
Architects | Jun 15, 2016
Design Thinking makes its way into Yale School of Management
The school will introduce Design Observer co-founders Jessica Helfand and Michael Bierut as faculty.
Retail Centers | Jun 14, 2016
Zaha Hadid and Gensler among finalists for Sunset Strip billboard design competition
The concepts are curvy, sleek, and multidimensional, and feature sharp digital displays.
Movers+Shapers | Jun 14, 2016
VERTICAL INTEGRATOR: How Brooklyn’s Alloy LLC evolved from an architecture firm into a full-fledged development company
Led by an ambitious President and a CEO with deep pockets, Alloy LLC's six entities control the entire development process: real estate development, design, construction, brokerage, property management, and community development.
Office Buildings | Jun 14, 2016
Let's not forget introverts when it comes to workplace design
Recent design trends favor extroverts who enjoy collaboration. HDR's Lynn Mignola says that designers need to accommodate introverts, people who recharge with solitude, as well.
Building Team | Jun 13, 2016
BD+C launches Women in Design+Construction Conference
Inaugural 2.5-day event will convene 125+ leading AEC women in Dana Point, Calif., November 9-11, for professional development, networking, and career training.
University Buildings | Jun 9, 2016
Designing for interdisciplinary communication in university buildings
Bringing people together remains the main objective when designing academic projects. SRG Design Principal Kent Duffy encourages interaction and discovery with a variety of approaches.
BIM and Information Technology | Jun 7, 2016
Conquer computational design: 5 tips for starting your journey
Data-driven design expert Nathan Miller offers helpful advice for getting your firm ready to use CD tools and concepts.
BIM and Information Technology | Jun 7, 2016
6 ways smart AEC firms are using computational design methods
Rapid prototyping, custom plug-ins, and data dashboards are among the common applications for computational design.
