Summertime turmoil in credit markets finally caught up with billings at architecture firms. The American Institute of Architects’ Architectural Billings Index (ABI) fell 6.1 points from its near-record high in July for a score of 53.9 in August; the volume of inquiries also tumbled by a similar amount for a score of 60.5. Although these numbers marked the biggest drop since September 2006, when the ABI lost 7.3 points, billings remain healthy since any score over 50 points represents growth.
Kermit Baker, the AIA’s chief economist, explained in a press release that while the ABI is compiled using data mainly sent to 300 mainly commercial firms, jitters in the residential sector led to a squeeze on nonresidential construction lending. Studies show a correlation between the ABI and construction spending nine to 12 months in the future.
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