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Architecture Billings Point Toward Recovery

ABI Remains Positive for Third Straight Month
February 27, 2012
The Architecture Billings Index (ABI), a leading indicator of future construction activity, stayed positive for the third month in a row, although the overall reading was flat and the West continues to show weak demand for design services.

The American Institute of Architects (AIA) reported the January ABI score was 50.9, following a mark of 51 in December, reflecting a continued slight increase in demand for design services.

Any score above 50 indicates an increase in billings. The ABI reflects the lag time of about nine to twelve months between architecture billings and construction spending.

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The index measuring inquiries for new projects was 61.2 in January, down slightly from a reading of 61.5 the previous month.

The three months of positive index reading is encouraging because it is reflected across most regions of the country and across the major construction sectors, said AIA Chief Economist Kermit Baker.

However, "because we still continue to hear about struggling firms and some continued uncertainly in the market, we expect that overall economic improvements in the design and construction sector [will] be modest in the coming months," Baker said.

The Midwest recorded the strongest demand growth with an index of 53.7, followed by the South (51.6), Northeast (50.7) and West (45.6).

Multifamily residential led all construction sectors at 52.6, followed by commercial/industrial (52.2), institutional (51.1) and mixed practice (46.1).
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