by Calculated Risk on 12/20/2017 11:37:00 AM
Wednesday, December 20, 2017
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture billings upturn shows broad strength
Even with the uncertainty related to pending tax reform legislation that likely will have a mixed effect on the construction industry, design services at architecture firms remains in high demand. The American Institute of Architects (AIA) reported the November ABI score was 55.0, up from a score of 51.7 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, up from a reading of 60.2 the previous month, while the new design contracts index rose slightly from 52.8 to 53.2.Click on graph for larger image.
“Not only are design billings overall seeing their strongest growth of the year, the strength is reflected in all major regions and construction sectors,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “The construction industry continues to show surprising momentum heading into 2018.”
• Regional averages: West (54.8), Northeast (52.8), South (52.8), Midwest (50.4)
• Sector index breakdown: multi-family residential (53.9), mixed practice (53.6), commercial / industrial (53.3), institutional (52.4)
This graph shows the Architecture Billings Index since 1996. The index was at 55.0 in November, up from 51.7 in October. 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 10 of the last 12 months, suggesting a further increase in CRE investment into 2018.
Posted by Calculated Risk on 12/20/2017 11:37:00 AM