After three straight months of improving conditions, the Architecture Billings Index (ABI) fell nearly three points. 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 reported the May ABI rating was 45.8, down substantially from a reading of 48.4 the previous month. This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings), and comes on the heels of the highest score since January 2008 when revenue at architecture firms headed into recession. The new projects inquiry index was 55.5.
“This dip is somewhat of a surprise since it appeared that conditions were pointing towards a recovery,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects that apparently would be successful in this economic environment.”
Key May ABI highlights:
Regional averages: Northeast (50.6), Midwest (48.5), South (45.9), West (42.9)
Sector index breakdown: commercial / industrial (51.3), multi-family residential (46.9), mixed practice (46.8), institutional (43.4)
Project inquiries index: 55.5
You must be logged in to post a comment.