AIA's Construction Index Continues to Decline
The outlook for the real estate sector continues to darken as the American Institute of Architects (AIA) Architecture Billings Index dropped to a historic low in January.
The outlook for the real estate sector continues to darken as the American Institute of Architects (AIA) Architecture Billings Index dropped to a historic low in January.
The January Architecture Billings Index (ABI) dropped to 33.3, down from the 34.1 mark in December. The inquiries for new projects score was 43.5.
The ABI is an economic indicator of construction activity. Any score above 50 indicates an increase in billings at architecture firms.
“Now that the stimulus bill has passed and includes funding for construction projects, as well as for municipalities to raise bonds, business conditions could improve,” says AIA Chief Economist Kermit Baker. “That said, until we can get a clearer sense of credit lines being made available by banks, it will be hard to gauge when a lot of projects that have been put on hold can get back online.”
Key January ABI Highlights
Regional averages:
West 38.3
Midwest 34.6
South 34.4
Northeast 29.8
Sector index breakdown:
mixed practice 39.6
institutional 37.1
commercial / industrial 33.8
multi-family residential 29.5
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 an 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.
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