Another drop for Architecture Billings Index

Following the first positive score in four months, the Architecture Billings Index (ABI) reversed direction again in September. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending.

The American Institute of Architects (AIA) reported the September ABI score was 46.9, following a score of 51.4 in August. This score reflects a sharp decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 54.3, down from a reading of 56.9 the previous month.

“It appears that the positive conditions seen last month were more of an aberration,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The economy is weak enough at present that design activity is bouncing around more than usual; one strong month can be followed by a weak one. The economy needs to be stronger to generate sustained growth in design activity.”

Key September ABI highlights:

Regional averages: Midwest (51.0), Northeast (50.8), South (47.3), West (46.7)
Sector index breakdown: commercial / industrial (52.4), mixed practice (50.0), institutional (48.0), multi-family residential (46.4)
Project inquiries index: 54.3

The regional and sector categories are calculated as a 3-month moving average, whereas the index and inquiries are monthly numbers. BD+C

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