AIA: Architecture billings climb into positive territory for first time in four months

by Brianna Crandall — January 9, 2012—Professionals in the architecture, design, construction, and other building-related industries will be encouraged by the American Institute of Architects’ (AIA) announcement that in November 2011, continuing the positive momentum of a nearly three-point bump in October, the Architecture Billings Index (ABI) reached its first positive mark since August 2011.

As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to twelve-month lag time between nonresidential architecture billings and construction spending. AIA reported the November ABI score was 52.0, following a score of 49.4 in October. This score reflects an overall increase in demand for design services (any score above 50 indicates an increase in billings, notes AIA). The new projects inquiry index was 65.0, up dramatically from a reading of 57.3 the previous month.

“This is a heartening development for the design and construction industry that only a few years ago accounted for nearly ten percent of overall GDP but has fallen to slightly less than six percent,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Hopefully, this uptick in billings is a sign that a recovery phase is in the works. However, given the volatility that we’ve seen nationally and internationally recently, we’ll need to see several more months of positive readings before we’ll have much confidence that the U.S. construction recession is ending.”

Key November ABI highlights:

• Regional averages: South (54.4), Midwest (50.9), Northeast (49.1), West (45.6)
  
• Sector index breakdown: multi-family residential (55.8), commercial / industrial (53.9), institutional (48.9), mixed practice (41.6)
  
• Project inquiries index: 65.0