Wednesday, April 20, 2011

March Architecture Index Holds Steady

From the American Institute of Architects: 

"The March 2011 Architecture Billings Index (ABI) remains virtually unchanged and right at, or slightly above, the break-even level. 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 March ABI score was 50.5, a negligible decrease from a reading of 50.6 the previous month (see chart above). This score reflects a modest increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.7, up significantly from a mark of 56.4 in February."

“Currently, architecture firms are essentially caught swimming upstream in a situation where demand is not falling back into the negative territory, but also not exhibiting the same pace of increases seen at the end of 2010,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The range of conditions reported continues to span a very wide spectrum with some firms reporting an improving business environment and even ramping up staffing, while others continue to operate in survival mode. The catalyst for a more robust recovery is likely financing, with stronger growth occurring only when lending institutions begin approving credit for construction projects with much greater regularity.”

Key March ABI highlights:

Regional averages: Midwest (53.5), Northeast (51.4), West (50.6), South (49.7)

Sector index breakdown: commercial / industrial (54.7), multi-family residential (50.8), mixed practice (49.8), institutional (48.0)
Project inquiries index: 58.7
MP: The most positive part of this month's report is the fact that the new project inquiries index increased in March, and was at the highest level for the month of March since 2007.  Although a sustained recovery in construction will probably not be a reality until at least later this year, the upward trend in the new project inquires index suggests that the construction recovery is coming. 


At 4/20/2011 10:23 AM, Blogger morganovich said...

we are on a pace for record low starts and completions in 2011.

i'm not really sure how to interpret that "inquiries" data.

the chart does not go back far enough to compare it to starts over the last several downturns.


is that just % change?

if inquiries drop from 100 to 10, then a 10% gain to 11 is not terribly significant.

At 4/20/2011 12:08 PM, Blogger Buddy R Pacifico said...

More positive and confident indications of sustained growth for the economy. Thanks, Prof. Perry.

At 4/20/2011 7:17 PM, Blogger juandos said...

It would be nice to see more construction jobs as a result of this index but when we have inept and incompetent clowns running the EPA the the future isn't so bright...

At 4/20/2011 7:50 PM, Blogger JamesD'Troy said...

I suppose this is good for US architecture firms but I have doubts as to the degree that it helps the US construction industry. Is there anyway to confirm that what is being designed by US architects is actually being built in the US vs. China/Dubai/India/etc?


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