AIA: Healthy demand for all building types signaled in Architecture Billings Index

Led by a still active multi-family housing market and sustained by solid levels of demand for new commercial and retail properties, the Architecture Billings Index has accelerated to its highest score in nearly a year.

As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the May ABI score was 53.1, up sharply from the mark of 50.6 in the previous month. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 60.1, up from a reading of 56.9 the previous month.

“Business conditions at design firms have hovered around the break-even rate for the better part of this year,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Demand levels are solid across the board for all project types at the moment. Of particular note, the recent surge in design activity for institutional projects could be a harbinger of a new round of growth in the broader construction industry in the months ahead.”

Key May ABI highlights:

Regional averages: West (53.8), South (53.7), Northeast (51.2), Midwest (49.9)
Sector index breakdown: multi-family residential (53.7), institutional (53.0), commercial/industrial (51.0), mixed practice (51.0),
Project inquiries index: 60.1
Design contracts index: 52.8
The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

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