AIA Architecture Billings Index posts slight improvement

The American Institute of Architects' yo-yoing Architecture Billings Index returned to its July level with its September ABI rating of 43.1, up from 41.7 in August and matching its 43.1 number from two months ago.

That July number was a six-point increase over June, so it's starting to look like August's number represented merely the latest in an ongoing up-and-down pattern that has plagued the ABI for the past several months. The index was 42.9 in May, dipped to 37.7 in June, increased to 43.1 in July, dipped to 41.7 in August, and went back up to 43.1 in September. Any score above 50 indicates an increase in billings.

This type of pattern makes it difficult for architecture firms to make strategic decisions with any certainty that their fortunes are turning for the better.

Then again, the new projects score in August was 59.1, its highest level since September 2007 and up from 55.2 in August, 50.3 in July, and 53.8 in June.

"The fact that inquiries for new projects are so high is an encouraging sign that we may be seeing new construction activity entering the design phase," said AIA Chief Economist Kermit Baker. "But that optimism has to be tempered by the fact that the marketplace is so competitive that firms are broadening their search for new projects, thereby inflating the number of inquiries that they are reporting. However, some larger stimulus-funded building activity should be coming online over the next several months, partially offsetting the steep decline in private commercial construction."

Regional averages were as follows: Northeast (47.2, up from 45.2 in August, 37.8 in July, and 42.8 in June, but still below the 48.3 in May), Midwest (43.0, matching its 43.0 in August but up from 36.9 in July), South (42.7, down from 44.1 in August and 43.4 in July, but up from 40.5 in June), and West (36.0, down from 37.5 in August, 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April).

The September ABI breaks down by sector as follows: multi-family residential (45.1, up from 43.4 in August, 40.7 in July and 42.7 in June), institutional (43.9, up sharply from 37.5 in August, 37.1 in July, and 37.0 in June), commercial/industrial (39.0, down sharply from 45.6 in August, 42.9 in July, and 39.5 in June), and mixed practice (36.3, down sharply from 41.4 in August, 42.9 in July, 43.5 in June, 44.5 in May, 44.2 in April, and 44.0 in March).

Ed