Strong Rebound for Architecture Billings Index

June 25, 2013
Uncertainty in marketplace cited as main roadblock to broader recovery

Following the first reversal into negative territory in 10 months in April, the Architecture Billings Index has bounced back in May. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the May ABI score was 52.9, up dramatically from a mark of 48.6 in April. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.1, up slightly from the reading of 58.5 the previous month.

“This rebound is a good sign for the design and construction industry and hopefully means that April’s negative dip was a blip rather than a sign of challenging times to come,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “But there is a resounding sense of uncertainty in the marketplace – from clients to investors and an overall lack of confidence in the general economy – that is continuing to act as a governor on the business development engine for architecture firms.”

Key May ABI highlights:

• Regional averages: Northeast (53.7), West (52.1), South (50.9), Midwest (47.5)

• Sector index breakdown: multi-family residential (52.8), institutional (52.2), mixed practice (51.0), commercial / industrial (47.5)

• Project inquiries index: 59.1

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

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