AIA's Construction Index Gains Momentum, but Still Remains Negative

Despite a small uptick in July, the the Architecture Billings Index (ABI) remains negative, highlighting the continuing difficult conditions in the nonresidential construction market, according to the American Institute of Architects (AIA).

The ABI rating inched up in July to 46.8 from 46.1, according to AIA. The inquiries for new projects score was 54.6.  

As an economic indicator of construction activity, the ABI shows an approximate nine to 12 month lag time between architecture billings and construction spending. Any score above 50 indicates an increase in billings.

There have been six consecutive months with negative scores, indicating that business levels at U.S architecture firms continue to worsen, according to AIA.
 
“Financing for new projects continues to be a problem,” said AIA Chief Economist Kermit Baker. “Many projects are being reconsidered due to construction cost increases. And while there are a good number of projects still in the queue, owners are taking longer to proceed to the next phase of the design process.”
 
July ABI Highlights:
 
Regional Averages:
Midwest 50.0
South 47.7
Northeast 46.5
West 42.2

Sector Index Breakdown:
Institutional 53.6
Commercial / Industrial 48.8
Mixed practice 45.6
Multi-family residential 39.2

Project inquiries index: 54.6
 
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.

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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