Architecture Billings Index Reaches Highest Mark Since 2007

The last three months have shown steadily increasing demand for design services and the Architecture Billings Index (ABI) is now at its highest level since 2007. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending.

The American Institute of Architects (AIA) reported the July ABI score was 55.8, up noticeably from a mark of 53.5 in June. This score reflects an increase in design activity (any score above 50 indicates an increase in billings).

The new projects inquiry index was 66.0, following a very strong mark of 66.4 the previous month.

The AIA has added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contracts in July was 54.9.

“Business conditions for the design and construction marketplace, and those industries associated with it, appear to be well-positioned for continued growth in the coming months,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “The key to a more widespread boost in design activity continues to be the institutional sector which is starting to exhibit signs of life after languishing for the better part of the last five-plus years.”

Key July ABI highlights:

• Regional averages: Northeast (55.5), South (55.1), Midwest (54.1), West (53.5)

• Sector index breakdown: mixed practice (61.0), multi-family residential (56.5), institutional (53.3), commercial / industrial (51.2)

• Project inquiries index: 66.0

• Design contracts index: 54.9

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

Craig DiLouie

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