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
Giants 400 | Aug 5, 2015
OFFICE SECTOR GIANTS: Today’s workplace design must appeal to Millennials’ ‘activity-based’ lifestyle
Office market AEC Giants discuss the latest trends workplace design, and the state of the office construction sector.
Giants 400 | Aug 5, 2015
GIANTS 300 REPORT: Top 37 Engineering/Architecture Firms
Jacobs, AECOM, and Thornton Tomasetti head Building Design+Construction's 2015 ranking of the largest engineering/architecture firms in the United States.
Giants 400 | Aug 5, 2015
ENGINEERING GIANTS: Profits, revenue on the rise at U.S. engineering firms as economy sputters back to life
The vast majority of engineering firms are decidedly bullish on revenue growth for 2015, and profitability is nearing a six-year high, according to BD+C's 2015 Giants 300 report.
Giants 400 | Aug 4, 2015
GIANTS 300 REPORT: Top 64 Architecture/Engineering Firms
Stantec, HOK, and Callison RTKL top Building Design+Construction's 2015 ranking of the largest architecture/engineering firms in the United States.
Giants 400 | Aug 4, 2015
GIANTS 300 REPORT: Top 106 Architecture Firms
Gensler, Perkins+Will, and Kohn Pedersen Fox top Building Design+Construction's 2015 ranking of the largest architecture firms in the United States.
Giants 400 | Aug 4, 2015
ARCHITECTURE GIANTS: 21 practice management innovations from architecture Giants
Design firms have gone all out with management innovations in the last year. Check out which ones might work for your firm.
Architects | Aug 4, 2015
Frank Lloyd Wright School of Architecture closer to independent incorporation
The school is halfway to its first fundraising milestone, but is facing a major deadline at end of this month.
Industrial Facilities | Aug 3, 2015
Architect Jacques Rougerie envisions floating city to function as roving laboratory
The manta ray-shaped vessel will be completely self-sustaining, run on marine energy, and produce no waste.
Cultural Facilities | Aug 3, 2015
Funding needed for Washington's Desert Storm memorial
The National Desert Storm Memorial Foundation has a $25 million goal for the project.
Sports and Recreational Facilities | Jul 31, 2015
Zaha Hadid responds to Tokyo Olympic Stadium controversy
“Our warning was not heeded that selecting contractors too early in a heated construction market and without sufficient competition would lead to an overly high estimate of the cost of construction,” said Zaha Hadid in a statement.
