The nonresidential construction market, while inching up slightly in August, still remains negative, according to the latest Architecture Billings Index (ABI) released by the American Institute of Architects.
August ABI rating was 47.6, up slightly from the 46.8 mark in July. The inquiries for new projects score was 52.4. Any score above 50 indicates an increase in billings.
Also troubling, the index has remained in the negative for seven consecutive months. But there is one bright spot — demand for projects such as schools, hospitals and government buildings continues, AIA says, with the institutional category of the ABI remaining positive going all the way back to 2004.
“The recent figures over the last quarter are no real surprise given the overall state of the economy,” says Kermit Baker, AIA chief economist . “The news for industries affected by the construction industry is that looking back 12 to eighteen months, the numbers were extremely healthy. That means many of those projects are currently in or entering the construction phase so there should still be demand for labor and building materials, and later on interiors, computer equipment and the like.”
Key August ABI highlights
Regional averages:
Midwest (49.4)
West (49.2)
Northeast (45.2)
South (45.0)
Sector index breakdown:
Institutional (52.2)
Commercial / Industrial (47.5)
Mixed practice (44.8)
Multi-family residential (40.8)
Project inquiries index: 52.4
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.
