by Calculated Risk on 1/22/2020 02:16:00 PM
Wednesday, January 22, 2020
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture Billings Index Ends Year on Positive Note
Demand for design services in December increased for the third 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 52.5 for December reflects an increase in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). During December, both the new project inquiries and design contracts scores were positive, posting scores of 58.7 and 53.4 respectively.
“Despite the ongoing slowdown in billings in the Northeast, balanced growth across sectors and regions looks more positive for the coming year,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Factors outside of the construction sector, such as trade policy and international events, could still impact demand for design services, however recent fears about a downturn in construction activity have largely subsided.”
• Regional averages: West (54.0); South (52.2); Midwest (51.9); Northeast (44.0)
• Sector index breakdown: commercial/industrial (54.0); multi-family residential (51.0); mixed practice (50.8); institutional (50.8)
This graph shows the Architecture Billings Index since 1996. The index was at 52.5 in December, up from 51.9 in November. 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 increase in CRE investment in 2020.
Posted by Calculated Risk on 1/22/2020 02:16:00 PM