AIA’s First Architecture Billings Index for 2017 Slips into Negative Territory

WASHINGTON, D.C. — The first Architecture Billings Index (ABI) of the year slipped below the positive mark, reflecting a decline in demand for design activity at architecture firms. The American Institute of Architects (AIA) reported the January ABI score was 49.5, down from a very strong 55.6 in December 2016.

The score reflects a decrease in design activity, with any score above 50 indicating an increase in billings. The new projects inquiry index was 60.0, up from a reading of 57.6 the previous month, and the design contracts index, which is an early indicator of construction contract awards, was also positive with a mark of 52.1.

Given the positive showing for the new projects inquiry and design contracts indices, Kermit Baker, AIA’s chief economist, isn’t too concerned about the ABI starting 2017 in the negative territory.

“This small decrease in activity, taking into consideration strong readings in project inquiries and new design contracts, isn’t exactly a cause for concern,” says Baker. “The fundamentals of a sound nonresidential design and construction market persist.”

Regionally, the West was the only geographic region with a negative showing (48.8). The South led the way with a 54.2 mark, followed by the Northeast (53.0) and Midwest (52.4).

Among property types, architects are seeing the highest demand for institutional developments with a three-month average score of 54.6. Commercial/industrial followed with a 53.4 score. Two property types, mixed-practice and multifamily, posted negative results with scores of 48.1.

The regional and property sector scores are calculated as three-month moving averages, but the national ABI, new projects inquiry and design contracts indices are reported as a monthly score.

Founded in 1857, Washington, D.C.-based AIA helps to create valuable and sustainable buildings and communities around the country. Through nearly 300 state and local chapters, the AIA also advocates for public policies that promote economic vitality and public wellbeing.

— John Nelson

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