by Calculated Risk on 12/18/2019 09:37:00 AM
Wednesday, December 18, 2019
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture Billings Index continues to show modest growth
Demand for design services in November increased at a modest pace for the second month in a row, according to a new report today from The American Institute of Architects (AIA).Click on graph for larger image.
AIA’s Architecture Billings Index (ABI) score of 51.9 for November reflects an increase in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). During November, both the new project inquiries and design contracts scores were positive, posting scores of 60.9 and 52.9 respectively.
“The uncertainty surrounding the overall health of the economy is leading developers to proceed with more caution on new projects,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “We are at a point where there is a potential for an upside but also a potential for things to get worse.”
• Regional averages: South (54.5); West (51.3); Midwest (51.1); Northeast (47.5)
• Sector index breakdown: commercial/industrial (52.9) mixed practice (52.2); multi-family residential (51.5); institutional (50.1)
This graph shows the Architecture Billings Index since 1996. The index was at 51.9 in October, down from 52.0 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 has been positive for 8 of the previous 12 months, suggesting some further increase in CRE investment in 2020 - but three of the previous six months were negative.
Posted by Calculated Risk on 12/18/2019 09:37:00 AM