Gain in Architecture Billings Index Highest in 4 Yrs.
Washington, D.C. – September 21, 2011 – "On the heels of a period of weakness in design activity, the Architecture Billings Index (ABI) took a sudden upturn in August. 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 August ABI score was 51.4, following a very weak score of 45.1 in July (see chart above). This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.9, up sharply from a reading of 53.7 the previous month (see chart).
“Based on the poor economic conditions over the last several months, this turnaround in demand for design services is a surprise,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Many firms are still struggling, and continue to report that clients are having difficulty getting financing for viable projects, but it’s possible we’ve reached the bottom of the down cycle.”
MP: The increase in the August architecture billing index was the largest monthly increase for the index in four years, and forecasts an increase in construction spending by next spring.
5 Comments:
I noted an article on another economics blog re Tuesday's housing figures that: "Building permits have exceeded construction completions for six months straight." (At: http://econintersect.com/wordpress/?p=13415 - I hope its OK to link elsewhere in the comments here, if not, apologies).
Combined with your Architectural Billings Index data it seems there are good signs of life for building and construction.
After three years of predictions of an imminent economic recovery that has not appeared, with monetary and fiscal policies still the same, why would any logical person think this prediction will be any more accurate?
and yet the mortgage purchase index is making new lows:
http://cr4re.com/charts/charts.html?Existing-Home#category=Existing-Home&chart=MBASept14.jpg
these levels have not been seen since the mid 90's and are over 60% off the peak.
We need nominal GDP targeting by the Fed.
MP: The increase in the August architecture billing index was the largest monthly increase for the index in four years, and forecasts an increase in construction spending by next spring.
Here we go again. You have all kinds of negative signs and Mark picks up one that suggests that things will be much better. Well, if the idiots in Congress really pass legislation to create an infrastructure bank we could expect more construction activities. But that does not mean that the real economy will improve or that building politically directed roads to nowhere is a good idea.
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