Washington, D.C. – May 23, 2007 – The Architecture Billings Index (ABI),an economic indicator of construction activity,continues to reveal solid demand for nonresidential design activity.The American Institute of Architects (AIA) reported the April ABI rating was 52.7 (any score above 50 indicates an increase in billings), nearly identical to the 52.6 mark in March. Inquiries for new projects shot up a full two points to 63.8, up from 61.8 the previous month.With an approximate nine to twelve month lag time between architecture billings and construction spending, and significant inquiry levels for new projects this news continues a forecast that remains favorable for the nonresidential construction market throughout 2007.
“We have had positive conditions all five months of the year so far,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA.“After starting off with very high numbers, the Index has leveled off lately with sustained, moderate expansion. Despite the favorable economic forecast, there is still concern about inflation in energy, raw materials and labor costs.”
Key April ABI highlights:
Regional averages: Midwest (54.9), West (54.0), South (52.2), Northeast (49.3)Sector index breakdown: institutional (56.1), commercial / industrial (55.2), residential (50.8), mixed practice (47.9)Inquiries index: 63.8
Banc of America Securities electrical equipment/ multi-industry senior equity research analyst Robert McCarthy, CFA, added, “This data continues to reinforce our message to our clients that the nonresidential construction sector, along with the industries that are affected by it, will remain strong for the foreseeable future.”
About the AIA Architecture Billings Index
The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group.Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. The diffusion indexes contained in the full report are derived from a monthly survey 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. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.
About The American Institute of Architects
For 150 years, members of The American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes.AIA members have access to the right people, knowledge, and tools to create better design, and through such resources and access, they help clients and communities make their visions real.www.aia.org
