by Calculated Risk on 11/20/2019 10:37:00 AM
Wednesday, November 20, 2019
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture Billings Index Rebounds After Two Down Months
Following a two month decline in demand for design services, architecture billings got a bounce in October, according to a new report released today from the American Institute of Architects (AIA).Click on graph for larger image.
The Architecture Billings Index (ABI) score in October is 52.0, up from the September score of 49.7. This score reflects an increase in design services (any score above 50 indicates an increase in billings). During October, both the new project inquiries and design contracts scores moderated from September but remained positive, posting scores of 57.9 and 52.9 respectively.
“Although ongoing uncertainty over the direction of economic growth persists, a strong stock market and growing payrolls at U.S. businesses continue to generate more construction projects,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “With most regional and sector billing scores at architecture firms improving from the previous month, we’re seeing a bit of a rebound from disappointing levels of design activity in recent months.”
• Regional averages: South (55.5); West (51.3); Midwest (49.9); Northeast (47.2)
• Sector index breakdown: mixed practice (55.2); multi-family residential (54.0); institutional (49.9); commercial/industrial (49.3)
This graph shows the Architecture Billings Index since 1996. The index was at 52.0 in October, up from 49.7 in September. 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 8 of the previous 12 months, suggesting some further increase in CRE investment in 2020 - but three of the previous four months were negative.
Posted by Calculated Risk on 11/20/2019 10:37:00 AM