Tuesday, March 20, 2012

February Architecture Index for New Project Inquires Reaches the Highest Level Since July 2007

"Led by the commercial sector, the Architecture Billings Index (ABI) has remained in positive territory four months in a row. 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 February ABI score was 51.0, following a mark of 50.9 in January. This score reflects a slight increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 63.4, up from mark of 61.2 the previous month and its highest reading since July 2007.

“This is more good news for the design and construction industry that continues to see improving business conditions,” said AIA chief economist Kermit Baker. “The factors that are preventing a more accelerated recovery are persistent caution from clients to move ahead with new projects, and a continued difficulty in accessing financing for projects that developers have decided to pursue.”

MP: More data to suggest that the construction market is showing gradual, but steady signs of improvement.  And because the architecture indexes are leading indicators of future construction spending, we can expected ongoing gains in construction activity through the rest of the year.  


At 3/21/2012 12:28 AM, Blogger Benjamin Cole said...

We have a long, long secular bull market in front of us, in property and equities--especially if the Fed gets over its peevish fixation on inflation, and starts to think about growth.

Smaller federal agencies would help too, and trims in entitlements.

At 3/21/2012 8:40 AM, Blogger juandos said...

Interestingly over at Zero Hedge there is this contrarian posting: So Long Housing - Mortgage Applications Collapse, And Sentiment Update

The broad Mortgage Application index collapsed by 7.4% in the week ending March 16, when rates experienced the bulk of the move downward, which was the 6th consecutive week of declines, following last week's 2.4% drop. And while refis have been down for 5 weeks in a row, with the index slamming 9.3% lower as higher rates have now obviously killed any interest in mortgages, so have purchase applications. MBA Purchasing index was down 4.4%, breaking a trend of 3 weeks of gains...


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