Wednesday, February 21, 2018

AIA: "Architecture billings continue growth into 2018"

by Bill McBride on 2/21/2018 10:47:00 AM

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

From the AIA: Architecture billings continue growth into 2018

2018 started on a strong note for architecture firms, as the Architecture Billings Index (ABI) saw its highest January score since 2007. The American Institute of Architects (AIA) reported the January ABI score was 54.7, up from a score of 52.8 in the previous month. This score reflects an increase in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). The new projects inquiry index was 61.1, down from a reading of 62.0 the previous month, while the new design contracts index increased slightly from 53.4 to 53.9.

“Healthy conditions continue across all sectors and regions except the Northeast, where firm billings softened for the second consecutive month,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “With strong billings and healthy growth in new projects to start the year, firms remain generally optimistic about business conditions for the next several months.”
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• Regional averages: West (56.2), South (55.3), Midwest (54.8), Northeast (47.3)

• Sector index breakdown: multi-family residential (56.0), commercial / industrial (53.3), institutional (52.5), mixed practice (50.1)
emphasis added
AIA Architecture Billing Index Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 54.7 in January, up from 52.8 in December. Anything above 50 indicates expansion in demand for architects' services.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, 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.  This index was positive in 11 of the last 12 months, suggesting a further increase in CRE investment in 2018.