Wednesday, March 20, 2019

AIA: "Billings Moderate in February Following Robust New Year"

by Calculated Risk on 3/20/2019 10:17:00 AM

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

From the AIA: Billings Moderate in February Following Robust New Year

rchitecture firm billings growth softened in February but remained positive, according to a new report today from The American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for February was 50.3, down from 55.3 in January. Indicators of work in the pipeline, including inquiries into new projects and the value of new design contracts remained positive.

“Overall business conditions at architecture firms across the country have remained generally healthy,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Firms in the south recorded continued strong design activity, likely reflecting a healthy regional economy and ongoing rebuilding from the catastrophic 2018 hurricane season.”
...
• Regional averages: South (58.3), West (51.6), Northeast (51.5), Midwest (51.3)

• Sector index breakdown: mixed practice (57.2), commercial/industrial (53.9), multi-family residential (51.6), institutional (50.9)
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 50.3 in February, down from 55.3 in January. 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 has been positive for 17 consecutive months, suggesting a further increase in CRE investment in 2019.