Increase in Architectural Billings Sets Stage for Increased Construction
Architectural billings increased for the third consecutive month, an indication that new construction could be on the rise in nine to 12 months. The American Institute of Architects (AIA) reported that its April Architectural Billings Index (ABI) rating increased 5.2% to 48.5, up from 46.1 in March. While the results means more firms saw billings decrease than increase, the rate of firms that saw decreases lessened in April. The monthly data is derived from questionnaires distributed to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month. A score of 50 reflects a balanced flow of billing work, anything above indicates an increase. April’s reading was the highest since January 2008, when the architecture industry’s revenue peaked. The AIA new project inquiry index was 59.6, reflecting that more firms saw increased inquiries than decreased. “It appears that the design and construction industry may be nearing an actual recovery phase,” said AIA chief economist Kermit Baker. “The economic landscape is improving, although not across the board, but doing so at a gradual pace. It is quite possible that we will finally see positive business conditions in the foreseeable future.” The regional billings index was highest in the Northeast, where the index was 51, followed by the Midwest (49.2), South (46.5) and West (44.7). The index was the highest in the commercial/industrial sector, at 48.5, followed by mixed practice (48.4), institutional (46.8), and multi-family residential (45.8). Write to Austin Kilgore.