Wednesday, January 21, 2009

ABI Continues to Mirror the Economy, Outlook Bleak for 2009

The AIA's Architecture Billings Index moved up a little in December, but continues to mirror the slumping economy. Following consecutive months with record low scores, the December ABI rating was 36.4, up from the 34.7 mark in November (any score above 50 indicates an increase in billings). The inquiries for new projects score was 37.7, down from what was the historic low point of 38.3 in November.

Because the index is a leading indicator of construction activity, the ABI shows an approximate 9- to 12-month lag time between architecture billing and construction spending. This means we shouldn't expect to see much construction activity in 2009.

"The inability to get financing for construction projects is a key reason that business conditions continue to be so poor at design firms," said AIA Chief Economist Kermit Baker. "It will be important to see what the proposed economic stimulus package includes that is geared toward the construction industry, and how quickly developers who have had to put projects on hold can get them moving again."

Regionally, the ABI breaks down as follows: Northeast (34.4, down sharply from 39.5 in November and 44.3 in October), South (35.3, down from 36.8 in November and 40.0 in October), Midwest (35.5, up sharply from 31.4 in November but down from 37.4 in October), and West (35.3, up from 33.5 in November and 34.9 in October). Sector by sector, the ABI breaks down thusly: mixed practice (45.1, up from 44.5 in November and even with 44.5 in October), institutional (39.3, down from 40.8 in November and 42.1 in October), commercial/industrial (28.1, up from 26.7 in November and down from 33.6 in October), and multi-family residential (30.0, even with November and down from 34.2 in October).


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