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
| May 13, 2014
Libeskind wins competition to design Canadian National Holocaust Monument
A design team featuring Daniel Libeskind and Gail Dexter-Lord has won a competition with its design for the Canadian National Holocaust Monument in Toronto. The monument is set to open in the autumn of 2015.
| May 12, 2014
Defining BIM – What do owners really want?
Given the complexities of the building process, it can be difficult for building owners to effectively communicate what they want and need with BIM. The response to the question usually is, “Give me everything.”
| May 12, 2014
The best of affordable housing: 4 projects honored with 2014 AIA/HUD Secretary Awards [slideshow]
The winners include two dramatic conversions of historic YMCA buildings into modern, affordable multifamily complexes.
| May 11, 2014
8 starter questions to answer when thinking about building
So, are you ready to start building? Completing these eight questions will help you answer that confidently. SPONSORED CONTENT
| May 11, 2014
Final call for entries: 2014 Giants 300 survey
BD+C's 2014 Giants 300 survey forms are due Wednesday, May 21. Survey results will be published in our July 2014 issue. The annual Giants 300 Report ranks the top AEC firms in commercial construction, by revenue.
| May 10, 2014
How your firm can gain an edge on university projects
Top administrators from five major universities describe how they are optimizing value on capital expenditures, financing, and design trends—and how their AEC partners can better serve them and other academic clients.
| May 9, 2014
It's official: Norman Foster-designed Harmon hotel and casino to be razed due to structural issues
Construction of the Las Vegas tower was halted in 2008 after experts discovered faulty steel beams in the structure. Now its owner, MGM, has received permission to demolish the building.
| May 9, 2014
5 trends transforming higher education
Performance-based funding models and the adoption of advanced technologies like augmented reality for teaching are just a few of the predictions offered by CannonDesign's higher education sector leader, Brad Lukanic.
| May 9, 2014
40 Under 40: Where are they now?
BD+C catches up with two past U40 honorees: Matt Dumich of Adrian Smith + Gordon Gill Architecture and David Montalba of Montalba Architects
| May 8, 2014
Perfecting prefab: 8 tips for healthcare construction projects
Leading AEC firms offer helpful advice for using BIM to pull off prefab for everything from MEP infrastructure to whole bathrooms.
