Construction + Economy

Architecture Billings Remain Stuck in Winter Slowdown

Riding a stretch of increasing levels of demand for 13 out of the last 15 months, the Architecture Billings Index (ABI) dropped in April for the second month this year.

As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the April ABI score was 48.8, down sharply from a mark of 51.7 in March. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 60.1, up from a reading of 58.2 the previous month.

“The fundamentals in the design and construction industry remain very healthy,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “The fact that both inquires for new projects and new design contracts continued to accelerate at a healthy pace in April points to strong underlying demand for design activity. However, April would typically be a month where these projects would be in full swing, but a severe winter in many parts of the Northeast and Midwest has apparently delayed progress on projects.”

Key April ABI highlights:

• Regional averages: South (55.8), West (52.9) Midwest (49.9), Northeast (43.2)
• Sector index breakdown: institutional (51.8), mixed practice (51.8), multi-family residential (49.0), commercial / industrial (48.9)
• Project inquiries index: 60.1
• Design contracts index: 53.1

The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

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Craig DiLouie

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