Healthy Demand for All Building Types Signaled in Architecture Billings Index

Recent client interest could signal resurgence for institutional market

Washington, D.C. – June 22, 2016 – Led by a still active multi-family housing market and sustained by solid levels of demand for new commercial and retail properties, the Architecture Billings Index has accelerated to its highest score in nearly a year.  As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the May ABI score was 53.1, up sharply from the mark of 50.6 in the previous month. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 60.1, up from a reading of 56.9 the previous month.

“Business conditions at design firms have hovered around the break-even rate for the better part of this year,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD.  “Demand levels are solid across the board for all project types at the moment.  Of particular note, the recent surge in design activity for institutional projects could be a harbinger of a new round of growth in the broader construction industry in the months ahead.”

Key May ABI highlights:

  • Regional averages: West (53.8), South (53.7), Northeast (51.2), Midwest (49.9)
  • Sector index breakdown: multi-family residential (53.7), institutional (53.0), commercial / industrial (51.0), mixed practice (51.0),
  • Project inquiries index: 60.1
  • Design contracts index: 52.8

The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is 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 as compared to the prior month, and the results are then compiled into the ABI.  These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the recently released White Paper, Designing the Construction Future: Reviewing the Performance and Extending the Applications of the AIA’s Architecture Billings Index on the AIA web site.

About The American Institute of Architects
Founded in 1857, the American Institute of Architects consistently works to create more valuable, healthy, secure, and sustainable buildings, neighborhoods, and communities. Through nearly 300 state and local chapters, the AIA advocates for public policies that promote economic vitality and public wellbeing. Members adhere to a code of ethics and conduct to ensure the highest professional standards. The AIA provides members with tools and resources to assist them in their careers and business as well as engaging civic and government leaders and the public to find solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.

Contact: 
Scott Frank

202-626-7467
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