Architecture Billings Index slips, overall outlook remains positive

On the heels of six out of seven months of increasing levels of demand for design services, the Architecture Billings Index (ABI) fell just below the positive mark. 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 August ABI score was 49.7, down from the mark of 51.5 in the previous month. This score reflects a decrease in design services (any score above 50 indicates an increase in billings).  The new projects inquiry index was 61.8, up sharply from a reading of 57.5 the previous month.

Despite the decrease in the demand for architectural services, this is only the second month this year that has experienced a decline. Currently, it doesn’t appear as if there is any reason to worry about a broader downturn in the design and construction industry, according to AIA Chief Economist, Kermit Baker, Hon. AIA, PhD.

Key August ABI highlights:

•  Regional averages: South (55.2), Midwest (52.8), West (49.0), Northeast (44.9)
•  Sector index breakdown: mixed practice (51.8), multi-family residential (50.9), commercial / industrial (50.8), institutional     (50.7)
• Project inquiries index: 61.8
• Design contracts index: 52.7