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Architecture Billings Index Bounces Back After Substantial Dip

August 19, 2009

Exhibiting a welcome rebound following a five-point dip the month prior, the Architecture Billings Index (ABI) was up almost six points in July. As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending.

The American Institute of Architects reported the July ABI rating at 43.1, up noticeably from 37.7 the previous month. However, this score still indicates a decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score fell to 50.3 from 53.8, but it was the fifth straight month with a score in above 50.

“It is always encouraging to see an uptick in our index, but there has been too much contraction in recent months to get overly optimistic about business conditions returning to levels they were at two months ago,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “In addition to a very competitive marketplace, architects continue to report that lenders have still not yet fully opened credit lines and that the stimulus funding has so far provided limited project activity for the design community overall.”

Key July ABI highlights:
  • Regional averages: South (43.4), West (39.7), Northeast (37.8), Midwest (36.9)
  • Sector index breakdown: mixed practice (42.9), commercial / industrial (42.9), multi-family residential (40.7), institutional (37.1)
  • Project inquiries index: 50.3
Source: American Institute of Architects

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