AIA’s Latest Architecture Billings Index Slips for First Time Since January
WASHINGTON, D.C. — Following six months of increasing demand for design services, the Architecture Billings Index (ABI) slipped below the positive mark for August, reflecting a decline in demand for design activity at architecture firms. The American Institute of Architects (AIA) reported the August ABI score was 49.7, down from the mark of 51.5 in July. The score reflects a decrease in design activity, with any score above 50 indicating an increase in billings.
“This is only the second month this year where demand for architectural services has declined and it is only by a fraction of a point,” said Kermit Baker, AIA’s chief economist.
The new projects inquiry index was 61.8, up from a reading of 57.5 the previous month. The design contracts index also jumped from the previous month, from 51.8 in July to 52.7 in August. The design contracts metric tracks trends in the dollar volume of signed design contracts, with any score above 50 reflecting a growing value of the design contracts signed by AIA member-owned firms.
Because the design contracts index functions as an early indicator of construction contract awards, Baker is assured that the decline in the ABI for August isn’t a harbinger of bad news for the remainder of 2016.
“Given the solid numbers for new design contracts and project inquiries, it doesn’t appear that this is the beginning of a broader downturn in the design and construction industry,” said Baker.
Among geographic regions, the Northeast is experiencing the largest decline in demand with a three-month average ABI score of 44.9, down from 49.3 in July. The South again led the way with a score of 55.2, followed by the Midwest (52.8) and West (49).
Among property types, architects are seeing the highest demand for mixed practice developments with a three-month average ABI score of 51.8. All property types are experiencing positive demand, with multifamily residential posting 50.9, commercial/industrial posting 50.8 and institutional posting 50.7.
The regional and property sector scores are calculated as three-month moving averages, but the national index is reported as a monthly score.
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