The Architecture Billings Index (ABI) dropped two points in October, after showing the first positive reading since January 2008. However, demand for new projects remains high.
The leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The October ABI score was 48.7; down from 50.4 (any score above 50 indicates an increase in billings).
“This is disappointing news, but not altogether that surprising,” says AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “We were anticipating a slow recovery period and it is likely that there will be some fits and starts before conditions show consistent improvement. Right now, reluctance from lending institutions to provide credit for construction projects and a sluggish economy are the main impediments to a revival of the design and construction industry.”
The ABI will continue to be monitored closely for developments.