The last three months have shown steadily increasing demand for design services and the Architecture Billings Index (ABI) is now at its highest level since 2007.
The American Institute of Architects (AIA) reported the July ABI score was 55.8, up noticeably from a mark of 53.5 in June. This score reflects an increase in design activity (any score above 50 indicates an increase in billings). The new projects inquiry index was 66.0, following a very strong mark of 66.4 the previous month.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending.
The AIA has added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contracts in July was 54.9.
“Business conditions for the design and construction marketplace, and those industries associated with it, appear to be well-positioned for continued growth in the coming months,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “The key to a more widespread boost in design activity continues to be the institutional sector which is starting to exhibit signs of life after languishing for the better part of the last five-plus years.”
Key July ABI highlights:
- Regional averages: Northeast (55.5), South (55.1), Midwest (54.1), West (53.5)
- Sector index breakdown: mixed practice (61.0), multi-family residential (56.5), institutional (53.3), commercial / industrial (51.2)
- Project inquiries index: 66.0
- Design contracts index: 54.9
The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.
About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI.
These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the recently released White Paper, Designing the Construction Future: Reviewing the Performance and Extending the Applications of the AIA’s Architecture Billings Index on the AIA website.
Related Stories
| Apr 5, 2011
Top 10 Buildings: Women in Architecture
Making selections of top buildings this week led to a surprising discovery about the representation of women in architecture, writes Tom Mallory, COO and co-founder, OpenBuildings.com. He discovered that finding female-created architecture, when excluding husband/wife teams, is extremely difficult and often the only work he came across was akin to interior design.
| Apr 5, 2011
What do Chengdu, Lagos, and Chicago have in common?
They’re all “world middleweight cities” that are likely to become regional megacities (10 million people) by 2025—along with Dongguan, Guangzhou, Hangzhou, Shenzhen, Tianjin, and Wuhan (China); Kinshasa (Democratic Republic of the Congo); Jakarta (Indonesia); Lahore (Pakistan); and Chennai (India), according to a new report from McKinsey Global Institute: “Urban World: Mapping the economic power of cities”.
| Mar 30, 2011
China's low-carbon future city
In 2005, the Chinese government announced its target to reduce energy consumption per GDP unit by 20% by the year 2010. After a multi-billion investment, that target has been reached. The Chinese Climate Protection Program’s goal to increase energy efficiency, develop renewable energies, and promote energy savings while reducing pollutant emissions and strengthening environmental protection is reflected in the “Future City” by SBA Design.
| Mar 30, 2011
Is the AEC industry at risk of losing its next generation leaders without better mentoring?
After two or three horrifying years for the AEC industry, we are finally seeing the makings of a turnaround. However, data developed by Kermit Baker as part of the AIA Work-on-the-Boards survey program indicates that between 17% and 22% of design firms are eliminating positions for interns and staff with less than six years of experience. This data suggests the industry is at risk of losing a large segment of its next generation of leaders if something isn't done to improve mentoring across the profession.
| Mar 29, 2011
City's design, transit system can ease gas costs
Some cities in the U.S. are better positioned to deal with rising gas prices than others because of their design and transit systems, according to CEOs for Cities, a Chicago-based nonprofit that works to build stronger cities. The key factor: whether residents have to drive everywhere, or have other options.
| Mar 29, 2011
Chicago’s Willis Tower to become a vertical solar farm
Chicago’s iconic Willis Tower (formerly the Sears Tower) is set to become a massive solar electric plant with the installation of a pilot solar electric glass project.
| Mar 29, 2011
Read up on Amazon.com's new green HQ
Phase IV of Amazon’s new headquarters in Seattle is nearly complete. The company has built 10 of the 11 buildings planned for its new campus in the South Lake Union neighborhood, and is on-track for a 2013 grand opening.
| Mar 29, 2011
Portuguese architect Eduardo Souto de Moura wins Pritzker Architecture Prize
Portugese architect Eduardo Souto de Moura, whose precisely-honed buildings reflect the influence of the late Chicago modernist Mies van der Rohe, is the 2011 winner of the Pritzker Architecture Prize, the field's highest honor.
| Mar 25, 2011
Qatar World Cup may feature carbon-fiber ‘clouds’
Engineers at Qatar University’s Department of Mechanical and Industrial Engineering are busy developing what they believe could act as artificial “clouds,” man-made saucer-type structures suspended over a given soccer stadium, working to shield tens of thousands of spectators from suffocating summer temperatures that regularly top 115 degrees Fahrenheit.
