Architectural Billings Index Shows Signs of Hope
Graphs courtesy AIA
The Architectural Billings Index dipped to 42.8 in April, down slightly from the month prior but considerably higher than January’s 33.3, an all-time low in the ABI’s 13-year history.
While many architects are still reporting “difficult conditions,” the recent figures could suggest an upswing in the coming months, says Kermit Baker, chief economist for the American Institute of Architects, which produces the index based on surveys sent to architecture firms.
“The most encouraging part of this news is that this is the second month with very strong inquiries for new projects,” Baker says. In April, the inquiries score was 56.8; in March, it was 56.6. “A growing number of architecture firms report potential projects arising from federal stimulus funds,” he adds.
Moreover, all of the regional sectors showed gains in April:
- The Northeast rose to 47.1, up from March’s 43.6.
- The South rose to 45.0, up from 43.0.
- The Midwest rose to 40.1, up from 39.0.
- The West rose to 39.2, up from 37.0.
The building sector scores also showed gains:
- Commercial/industrial scored 41.7 in April, up from 37.1 in March.
- Institutional rose to 43.2, up from 41.7.
- Multi-family residential increased to 43.2, up from 41.6.
The index, one of the profession’s leading economic indicators, reflects a nine- to 12-month lag time between architectural billings and construction spending. A score above 50 indicates an increase in billings, and below 50, a decrease.
In March, the billings score jumped to 43.7, up eight points from February’s 35.3. Prior to March, the score had sunk below 40 every month since last September.
The score has fallen below 50 for 15 straight months.Read more economic news in our Recession and Recovery special section.