Recent economic figures from the Architecture Billings Index (ABI) revealed that summer finished on a high note with a significant rise in the demand for design services. The ABI score for the month of August jumped more than a full point from July climbing up to 53.8 from 52.7 (any score above 50 indicates positive growth). AIA Chief Economist, Kermit Baker, sees positive growth for the industry, but remains cautious about the future. “As business conditions at architecture firms have improved eleven out of the past twelve months, it is fair to say that the design professions are in a recovery mode,” Baker said. “This upturn signals an impending turnaround in nonresidential construction activity, but a key component to maintaining this momentum is the ability of businesses to obtain financing for real estate projects, and for a resolution to the federal government budget and debt ceiling impasse.”
Summer isn’t slowing the demand for design services, according to the AIA’s latest economic figures. In fact, numbers are on the rise. The AIA’s Architecture Billings Index (ABI) for July increased more than a full point spike in non-residential construction activity from June’s ABI score of 51.6 to 52.7 (any score above 50 indicates positive growth). Most notably, the new projects inquiry index produced positive results with a substantial increase from 62.6 the previous month to 66.7 in July.
Underscoring the fragility of the economic recovery, the April AIA’s Architecture Billings Index dipped into negative territory for the first time in nine months. The slump to 48.6 was significant, down from 51.9 in March (any score above 50 indicates positive growth).
“Project approval delays are having an adverse effect on the design and construction industry, but again and again we are hearing that it is extremely difficult to obtain financing to move forward on real estate projects,” said AIA Chief Economist, Kermit Baker, in a statement. “There are other challenges that have prevented a broader recovery that we will examine in the coming months if this negative trajectory continues. However, given that inquiries for new projects continue to be strong, we’re hopeful that this is just a short-term dip.”
Over the past few months the Architecture Billings Index has shown the strongest growth in the demand for design services since 2007 and once again reports an incrementally strengthened score of 54.9 for February, a slight increase from a 54.2 in January (and a 51.2 in December). All four regions scored above 50, an indicator of positive growth. The Northeast performed the best at 56.7, the West and the Midwest tied at 54.7, and the South finished with a 52.7.
The Architecture Billings Index showed renewed strength in January, with a jump to 54.2 from 51.2 in December (any score above 50 indicates positive growth). All four regions were in positive territory with the Midwest leading at 54.4, the long struggling West showing strength at 53.4, the South came in at 51.7, and the Northeast at 50.3. The Index posted the strongest gains since November 2007.
Heading into the holidays, the AIA has more good economic news to report: the Architectural Billings Index (ABI) has recorded a third straight month of growth. The October score was 52.8, up from September’s 51.6 (any score above 50 indicates a growth in billings). The uptick reflects improving conditions in the housing market and real estate more broadly. All four regions were in positive territory, with the South leading at 52.8, followed by the Northeast at 52.6, the West at 51.8, and the Midwest at 50.8.
The AIA has released its Architecture Billings Index (ABI) for September, and the news looks good. According to the organization, the ABI score went to 51.6, up from 50.2 in August (any score above 50 reflects an increase in billings). The spike marks the fastest increase in the demand for design services since 2010.
The AIA tied the upswing in billings to an increased demand for rental housing. “Going back to the third quarter of 2011, the multi-family residential sector has been the best performing segment of the construction field,” said AIA Chief Economist Kermit Baker. “With high foreclosure levels in recent years, more stringent mortgage approvals and fewer people in the market to buy homes there has been a surge in demand for rental housing. The upturn in residential activity will hopefully spur more nonresidential construction.”
The AIA’s monthly Architecture Billings Index (ABI) for July came in with a disappointing 48.7 (any score below 50 indicates a decline in billings for design activity). The news was not all bad though. The ABI was up significantly from last month’s score of 45.9. “Even though architecture firm billings nationally were down again in July, the downturn moderated substantially,” said AIA Chief Economist, Kermit Baker. “As long as overall economic conditions continue to show improvement, modest declines should shift over to growth in design activity over the coming months.”