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Wednesday, January 21, 2009

Architecture Billings Index Near Record Low

by Calculated Risk on 1/21/2009 07:44:00 PM

The American Institute of Architects reports: Architecture Billings Index Remains at Historically Low Levels

AIA Architecture Billing Index Click on graph for larger image in new window.

Following consecutive months with record low scores, with the Architecture Billings Index (ABI) moved up only very modestly, signifying that the design industry remains mired in a steep downturn. 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 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.

“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, PhD, Hon. AIA. “It will be important to see what the proposed economic stimulus package includes that is geared towards the construction industry, and how quickly developers who have had to put projects on hold can get them moving again.”
Commercial / industrial and multi-family residential are the hardest hit sectors. This is just more evidence that non-residential investment in structures will fall off a cliff in 2009.