AIA “Surprised” Architecture Billings Index Dipped Down Again in March

National, News
Friday, April 25, 2014
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BILLINGS (BLUE) AND INQUIRIES (RED) FOR THE PAST 12 MONTHS. (THE ARCHITECT’S NEWSPAPER)

BILLINGS (BLUE) AND INQUIRIES (RED) FOR THE PAST 12 MONTHS. (THE ARCHITECT’S NEWSPAPER)

After starting the year on a positive trend, the Architectural Billings Index ticked down last month. The March ABI score dropped sharply from February’s score of 50.7 to 48.8. This moves the index into negative territory as any score below 50 signifies a decrease in design services. The new projects inquiry, though, did tick up from 56.8 to 57.9.

BILLINGS BY REGION: NORTHEAST (ORANGE), MIDWEST (BLUE), SOUTH (RED), WEST (GREEN).

BILLINGS BY REGION: NORTHEAST (ORANGE), MIDWEST (BLUE), SOUTH (RED), WEST (GREEN).

The sharpest declines were in the Northeast and Midwest, which posted scores of 46.8 and 46.6, respectively. The South (52.8) and West (50.7) both remained in positive territory. By sector, multi-family residential was the only positive marker at 52.1, while commercial/industrial (49.6), institutional (49.0), and mixed practice (47.6) dipped below 50.

“This protracted softening in demand for design services is a bit of a surprise given the overall strength of the market the last year and a half,” said AIA Chief Economist Kermit Baker. “Hopefully, some of this can be attributed to severe weather conditions over this past winter. We will have a better sense if there is a reason for more serious concern over the next couple of months.”

The AIA has also announced a new metric to measure design contracts. According to the AIA, this will be a less subjective way to estimate future billings activities at architecture firms. “We determined that the most accurate predictor of future design workloads is the monthly change in the volume of new design contracts.” said Baker. In its inaugural measurement, the Design Contracts Index posted 48.2 in March.

BILLINGS BY SECTOR: RESIDENTIAL (ORANGE), COMMERCIAL/INDUSTRIAL (BLUE), INSTITUTIONAL (RED), MIXED-USE (GREEN).

BILLINGS BY SECTOR: RESIDENTIAL (ORANGE), COMMERCIAL/INDUSTRIAL (BLUE), INSTITUTIONAL (RED), MIXED-USE (GREEN).

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