The Architectural Billing Index (ABI), the American Institute of Architect's (AIA) leading economic indicator of nonresidential construction activity, showed a slight improvement in September. The ABI reflects the approximate nine to 12 month lag time between architecture billings and construction spending.
The AIA reported that the September ABI rating was 43.1, up slightly from 41.7 in August, which indicates a slower rate of decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score, however, was 59.1, its highest level since September 2007.
“The fact that inquires for new project are so high is an encouraging sign that we may be seeing new construction activity entering the design phase,” says AIA chief economist Kermit Baker, PhD, Hon. AIA. “But that optimism has to be tempered by the fact that the marketplace is so competitive that firms are broadening their search for new projects, thereby inflating the number of inquiries that they are reporting. However, some larger stimulus-funded building activity should be coming online over the next several months, partially offsetting the steep decline in private commercial construction.”
Key September ABI highlights:
- Regional averages: Northeast (47.2), Midwest (43.0), South (42.7), West (36.0)
- Sector index breakdown: multi-family residential (45.1), institutional (43.9), commercial / industrial (39.0), mixed practice (36.3),
- Project inquiries index: 59.1