Architecture Billings Index Drops for Fifth Straight Month

Following a drop of almost a full point in June, the Architecture Billings Index (ABI) fell again by more than a point in July. As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the July ABI score was 45.1–the steepest decline in billings since February 2010–after a reading of 46.3 the previous month. This score reflects a continued decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 53.7, a considerable slowdown from a reading of 58.1in June.

“Business conditions for architecture firms have turned down sharply,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Late last year and in the first couple of months of this year there was a sense that we were slowly pulling out of the downturn, but now the concern is that we haven’t yet reached the bottom of the cycle. Current high levels of uncertainly in the economy don’t point to an immediate turnaround.”

Key July ABI highlights:

* Regional averages: South (46.9), West (46.6), Northeast (46.4), Midwest (44.9)
* Sector index breakdown: commercial / industrial (47.9), institutional (47.2), mixed practice (47.1), multi-family residential (44.7)
* Project inquiries index: 53.7

Craig DiLouie

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