Category: Construction + Economy

Architecture Billings Index Dips into Contractionary Territory

After seven months of steady growth in the demand for design services, the Architecture Billings Index (ABI) paused in September.

After seven months of steady growth in the demand for design services, the Architecture Billings Index (ABI) paused in September. 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 September ABI score was 49.1, down from a score of 53.7 in the previous month. This score reflects a slight decrease in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.0, down from a reading of 62.5 the previous month, while the new design contracts index eased somewhat from 54.2 to 52.9.

“We’ve seen unexpectedly strong numbers in design activity for most of 2017, so the pause in September should be viewed in that context” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Project inquiries and new design contracts remain healthy, and the continued strength in most sectors and regions indicates stability industry-wide.”

Key September ABI highlights:

• Regional averages: Northeast (56.9), South (54.0), Midwest (50.4), West (48.8)
• Sector index breakdown: commercial / industrial (54.0), mixed practice (52.2), multi-family residential (51.0), institutional (51.0)
• Project inquiries index: 59.0
• Design contracts index: 52.9

(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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AIA Home Design Trends Survey Finds Growing Popularity of Controls

Wireless features, automated lighting controls, and home automation are becoming more popular in residential projects; the most popular home products demonstrate energy management features. These are just some of the findings from The American Institute of Architects’ (AIA) Home Design Trends Survey covering activity during the second quarter of 2017 that focused on emerging home features, systems and technologies.

Wireless features, automated lighting controls, and home automation are becoming more popular in residential projects; the most popular home products demonstrate energy management features. These are just some of the findings from The American Institute of Architects’ (AIA) Home Design Trends Survey covering activity during the second quarter of 2017 that focused on emerging home features, systems and technologies.

“As more automation products become available, homeowners continue to explore new ways to maintain their spaces with greater ease,” said said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA.

The AIA Home Design Trend Survey is conducted quarterly with a panel of over 500 architecture firms that concentrate their practice in the residential sector. Residential architects are design leaders in shaping how homes function, look, and integrate into communities and this survey helps to identify emerging trends in the housing marketplace. Business conditions are also monitored on a quarterly basis. Future surveys will focus on community design trends (December 2017), and kitchen and bath trends (April 2018).

Most popular spaces

For the sixth consecutive year, outdoor living rooms have taken the top spot in terms of growing consumer interest among special function rooms. Following in second and third for special function rooms are mud rooms and home offices, respectively, as interest in these spaces has seemingly plateaued.

“Prior to the housing downturn, home offices maintained a solid hold as the most requested special function room,” said Baker. “Obviously new home technology offerings have influenced residential design trends, but the impact of the Great Recession can still be seen through homeowner interest in better use of existing space.”

“Not surprisingly demand for greater accessibility features continues to be strong,” Baker added. “Whether it’s a result of generally lower mobility or the aging baby-boomer population, homeowners are preparing for the future.”

Housing market business conditions

  • AIA Home Design Survey Index for Q2 2017 (any score above 50 is positive)
  • Billings: 60
  • Inquiries for new projects: 66 Regional averages: South (64.7), West (63.1), Midwest (58.8), Northeast (48.7)

 

“Activity in the additions and remodeling segments are picking up pace. This is a positive sign for the greater housing market in 2018,” Baker concluded.

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Architecture Billings Index Continues Growth Streak

With all geographic regions and building project sectors showing positive conditions, there continues to be a heightened level of demand for design services signaled in the latest Architecture Billings Index (ABI). The American Institute of Architects (AIA) reported the August ABI score was 53.7, up from a score of 51.9 in the previous month.

With all geographic regions and building project sectors showing positive conditions, there continues to be a heightened level of demand for design services signaled in the latest Architecture Billings Index (ABI). 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 August ABI score was 53.7, up from a score of 51.9 in the previous month. This score reflects an increase in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). The new projects inquiry index was 62.5, up from a reading of 59.5 the previous month, while the new design contracts index eased somewhat from 56.4 to 54.2.

“The August results continue a string of very positive readings from the design professions, pointing to future healthy growth across the major construction sectors, as well as across the major regions of the country,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Given the focus and discussions around the infrastructure needs of the nation, we expect strong growth in design activity for the coming months and years.”

Key August ABI highlights:

• Regional averages: South (55.7), Northeast (54.3), Midwest (52.5), West (51.3)
• Sector index breakdown: commercial / industrial (57.6), multi-family residential (53.8), mixed practice (52.5), institutional (50.1)
• Project inquiries index: 62.5
• Design contracts index: 54.2

(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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Architecture Billings Index Growth Moderates

For the sixth consecutive month, architecture firms reported increasing demand for design services as reflected in the July Architecture Billings Index (ABI). As a leading economic indicator of construction activity,…

For the sixth consecutive month, architecture firms reported increasing demand for design services as reflected in the July Architecture Billings Index (ABI). 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 July ABI score was 51.9, down from a score of 54.2 in the previous month. This score still reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.5, up from a reading of 58.6 the previous month, while the new design contracts index increased from 53.7 to 56.4.

“The July figures show the continuation of healthy trends in the construction sector of our economy,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “In addition to the balanced increases in design billings across all major regions and construction sectors, the strong gains in new project work coming into architecture firms points to future growth in design and construction activity over coming quarters.”

Key July ABI highlights:

• Regional averages: South (53.8), Midwest (53.8), Northeast (53.6), West (50.9)
• Sector index breakdown: multi-family residential (55.8), commercial / industrial (55.4), institutional (52.0), mixed practice (48.4)
• Project inquiries index: 59.5
• Design contracts index: 56.4

(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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Electroindustry Business Confidence Indexes Decline Sharply but Remain above 50

NEMA’s Electroindustry Business Confidence Index for current conditions slid by more than 20 points from the near-term high of 76.5 reached in March of this year. As recently as last…

NEMA’s Electroindustry Business Confidence Index for current conditions slid by more than 20 points from the near-term high of 76.5 reached in March of this year. As recently as last month, the current conditions index topped 60 but fell 7.2 points to reach July’s value of 53.3. Most of the change came from a larger share of respondents – 67% in July versus 58% last month – who reported unchanged conditions. The share of those who noted that conditions are worse increased by only 2 points to 13 percent this month. Some respondents mentioned sluggishness in key markets, while others noted improving economic conditions overall and the seasonal boost typical of summertime.

The future conditions index fell even more dramatically than the current index. In January 2017, the six-month ahead index stood at 91.7 but dropped 35 percentage points since that zenith. July’s reading clocked in at 56.7 points, down from 68.4 last month.

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Moderating Economic Growth Results in Downgraded Construction Forecast for 2017 and 2018

The AIA Consensus Construction Forecast projects annual growth in the 3.5% to 4% range for the remainder of 2017 as well as for 2018, with a slower growing commercial/industrial market,…

The AIA Consensus Construction Forecast projects annual growth in the 3.5% to 4% range for the remainder of 2017 as well as for 2018, with a slower growing commercial/industrial market, and an institutional sector facing several challenges. While some slowdown in the commercial sector was anticipated for 2017 and 2018, it was expected to be offset by acceleration in the institutional sector. However, year-to-date growth in spending for institutional buildings is at only 3%, well below expectations when the year began.

The AIA Consensus Construction Forecast Panel is conducted twice a year with the leading nonresidential construction forecasters in the United States including, Dodge Data & Analytics, Wells Fargo Securities, IHS Markit, Moody’s Economy.com, ConstructConnect, Associated Builders & Contractors and FMI. The purpose of the Consensus Construction Forecast Panel is to project business conditions in the construction industry over the coming 18 to 24 months. The Consensus Construction Forecast Panel has been conducted for 18 years.

“Despite billings at architecture firms performing quite well this year, the larger construction industry is facing a range of issues,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The somewhat weaker outlook is driven by several factors, some dealing with the broader U.S. economy, some dealing with general construction industry fundamentals, and some dealing with weakness in specific construction sectors.”

Click here for an in-depth look at the new forecast.

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Design Billings Maintain Solid Footing

Design services at architecture firms continue to project a healthy disposition on the construction industry as the Architecture Billings Index (ABI) recorded the fourth consecutive month of growth in May…

Design services at architecture firms continue to project a healthy disposition on the construction industry as the Architecture Billings Index (ABI) recorded the fourth consecutive month of growth in May 2017.

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 May ABI score was 53.0, up from a score of 50.9 in the previous month. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 62.4, up from a reading of 60.2 the previous month, while the new design contracts index increased from 53.2 to 54.8.

“The fact that the data surrounding both new project inquiries and design contracts have remained positive every month this year, while reaching their highest scores for the year, is a good indication that both the architecture and construction sectors will remain healthy for the foreseeable future,” AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “This growth hasn’t been an overnight escalation, but rather a steady, stable increase.”

Key May ABI highlights:

• Regional averages: South (56.1), West (52.3), Midwest (50.4), Northeast (46.5)
• Sector index breakdown: mixed practice (55.8), multi-family residential (51.3), commercial / industrial (51.2), institutional (51.2)
• Project inquiries index: 62.4
• Design contracts index: 54.8

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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Architecture Billings Index Strengthens

The first quarter of the year ended on a positive note for the Architecture Billings Index (ABI). As a leading economic indicator of construction activity, the ABI reflects the approximate…

The first quarter of the year ended on a positive note for the Architecture Billings Index (ABI).

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 March ABI score was 54.3, up from a score of 50.7 in the previous month. This score reflects a sizable increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.8, down from a reading of 61.5 the previous month, while the new design contracts index dipped from 54.7 to 52.3.

“The first quarter started out on uneasy footing, but fortunately ended on an upswing entering the traditionally busy spring season,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “All sectors showed growth except for the commercial/industrial market, which, for the first time in over a year displayed a decrease in design services.”

Key March ABI highlights:

• Regional averages: Midwest (54.6), South (52.6), Northeast (52.4), West (50.2)
• Sector index breakdown: multi-family residential (54.6), mixed practice (53.7), institutional (52.9), commercial / industrial (49.8)
• Project inquiries index: 59.8
• Design contracts index: 52.3

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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Architecture Billing Index Rebounds

The Architecture Billings Index (ABI) returned to growth mode in February after a weak showing in January. As a leading economic indicator of construction activity, the ABI reflects the approximate…

The Architecture Billings Index (ABI) returned to growth mode in February after a weak showing in January. 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 February ABI score was 50.7, up from a score of 49.5 in the previous month. This score reflects a minor increase in design services (any score above 50 indicates an increase in billings).

The new projects inquiry index was 61.5, up from a reading of 60.0 the previous month, while the new design contracts index climbed from 52.1 to 54.7.

“The sluggish start to the year in architecture firm billings should give way to stronger design activity as the year progresses,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “New project inquiries have been very strong through the first two months of the year, and in February new design contracts at architecture firms posted their largest monthly gain in over two years.”

Key February ABI highlights:

• Regional averages: Midwest (52.4), South (50.5), Northeast (50.0), West (47.5)
• Sector index breakdown: institutional (51.8), multi-family residential (49.3), mixed practice (49.2), commercial / industrial (48.9)
• Project inquiries index: 61.5
• Design contracts index: 54.7

(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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Electroindustry Business Confidence Soars

In moving from 72.2 last month to 76.5 in March, the NEMA Electroindustry Business Confidence current conditions index reached its highest level since September 2005. Although some executives remarked on…

In moving from 72.2 last month to 76.5 in March, the NEMA Electroindustry Business Confidence current conditions index reached its highest level since September 2005.

Although some executives remarked on confusion in Washington and flashes of social unrest, signs of a strengthening economy noted by others were apparently widespread among panel members. The share of those indicating better business conditions increased by 9 percentage points to 59% this month, and all of that increase came as a result of a 9 percentage point drop in the “unchanged” conditions category, from 44% in February to 35% in March. Like last month, only 6% reported worse conditions.

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