Exhibiting a welcome rebound following a 5-point dip the month prior, the Architecture Billings Index (ABI) was up almost 6 points in July. As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported that the July ABI rating was 43.1, up noticeably from 37.7 the previous month. This score, however, still indicates a decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score fell to 50.3 from 53.8, but it was the fifth straight month with a score in above 50.
“It's always encouraging to see an uptick in our index, but there has been too much contraction in recent months to get overly optimistic about business conditions returning to levels they were at 2 months ago,” says AIA Chief Economist Kermit Baker. “In addition to a very competitive marketplace, architects continue to report that lenders have still not yet fully opened credit lines and that the stimulus funding has so far provided limited project activity for the design community overall.”
Key July ABI highlights:
- Regional averages: South (43.4), West (39.7), Northeast (37.8), Midwest (36.9)
- Sector index breakdown: mixed practice (42.9), commercial/industrial (42.9), multi-family (40.7), institutional (37.1)
- Project inquiries index: 50.3
