Wednesday, April 20, 2011

AIA: Architecture Billings Index little changed in March

by Bill McBride on 4/20/2011 12:01:00 AM

Note: This index is a leading indicator for new Commercial Real Estate (CRE) investment.

From Reuters: US architecture billings index flat in March -AIA

The Architecture Billings Index slipped 0.1 point to 50.5 in March, according to the American institute of Architects.
"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.
AIA Architecture Billing Index Click on graph for larger image in graph gallery.

This graph shows the Architecture Billings Index since 1996. The index showed billings increased slightly in March (index at 50.5, anything above indicates an increase in billings).

Note: Nonresidential construction includes commercial and industrial facilities like hotels and office buildings, as well as schools, hospitals and other institutions.

According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. So this indicator suggests the drag from CRE investment will end mid-year 2011 or so - but there won't be a strong increase in investment.