Following a period of extended growth, the Architecture Billings Index (ABI), which is compiled by the AIA, declined for the second straight month, down to 48.5 in December from 49.8 in November (any score below 50 indicates a decline). The news is not entirely bleak, however, as new project inquiries rose to 59.2 up from 57.8. The regional breakdown reflects a reversal of fortunes during the recovery. The Northeast, long the leading region for the ABI, is now trailing the other three regions, with a paltry score of only 42.8. The long suffering West now leads at 53.2, followed by the South at 51.2. The Midwest is also mired in negative territory at 47.0. By sector, multi-family residential leads at 53.8, mixed practice follows at 51.0, commercial/industrial at 47.1, and institutional work trails at 44.8. AIA chief economist made a cautionary statement: "What we thought last month was an isolated dip now bears closer examination to see what is causing the slowdown in demand for architectural services." Stay tuned.
Posts tagged with "Architecture Billings Index":
All good things must come to an end. Following a robust six months, the demand for design services has simmered down. In November, the Architecture Billings Index (ABI) slid from 51.6 in October to 49.8 (any score above 50 indicates an increase in billings). This the second month in a row that the ABI has experienced a small dip. “Architecture firms continue to report widely varying views of business conditions across the country. This slight dip is likely just a minor, and hopefully temporary, lull in the progress of current design projects,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “But there is a continued uneasiness in the marketplace as businesses attempt to determine the future direction of demand for commercial, industrial, and institutional buildings.” Across the country, regional averages fell by several points. The West took the biggest hit with numbers tumbling to a low from 55.9 in October to 50.2 in November. It was a slow month for the Northeast as well, dropping to 47.5 from 49.7 in October. The South also went through a bit of a slump, dipping more than two points to 52. The Midwest came out the best, remaining steady at 51.6. Figures revealed that the commercial/industrial sector came to a crawl last month, falling most dramatically from 53.7 in October to 48.6. All the remaining sectors experienced a decline in November as well: multi-family residential (55.2), mixed practice (53.1), institutional (47.7). In more bad news, the project inquiries index dropped from 61.5 to 57.8.
After a three-month streak of positive growth, the Architecture Billings Index revealed a small dip in the demand for design services. The ABI score slid down from 54.3 in September to 51.6 in October (any score above 50 indicates an increase). AIA Chief Economist Kermit Baker said that the tumultous political climate—read Government Shutdown—contributed to the drop in activity last month. “There continues to be a lot of uncertainty surrounding the overall U.S. economic outlook and therefore in the demand for nonresidential facilities, which often translates into slower progress on new building projects,” said Baker. “That is particularly true when you factor in the federal government shutdown that delayed many projects that were in the planning or design phases.” October was a month of mixed results for architects across the country. Numbers rose slightly in the the South, jumping from 54.1 in September up to 54.4 in October. The Midwest also came out strong climbing to 51.6 from 51. The West, though, took a bit of a nosedive, falling from 60.6 to 55.9. The Northeast (49.7) also didn't fare quite as well as the previous month. There was a surge of multi-family and residential projects last month. The sector climbed up a couple of points from 55.6 to 57. Meanwhile figures showed a decline for the other sectors: commercial/industrial (53.7), mixed practice (53.2), and institutional (50.2). The rise in new projects inquiry, however, bodes well for the future—moving from 58.6 to 61.5 last month.
The slow days of the recession are long gone. Recent figures indicate that September was another robust month for the architecture industry. The Architecture Billings Index (ABI) rose from 53.8 in August to 54.3 (any score above 50 indicates an increase in billings). AIA Chief Economist Kermit Baker said that this upswing in the demand for design services is a reflection of the industry's new and advanced design and business practices. “The prolonged economic downturn that has affected the design and construction industry has actually resulted in the increased productivity levels as reported by architecture firms,” Baker said. “In addition to new approaches to business challenges, a very competitive marketplace, the utilization of new technologies, and a renewed focus on efficiency have architecture firms realizing all-time highs in workplace productivity, and these new efficiencies can greatly benefit clients from a project timeline and budget standpoint,” continued Baker. Some regions fared better than others last month. The West came out strong, jumping nearly 6 points from 54.8 to 60.6. The South also showed positive growth increasing from 51.9 to 54.1. The Midwest dipped down to 51 from 52.8, and the Northeast also slipped several points from 54.4 to 50.7. The commercial/industrial and multi-family sectors have been busier than usual. The former spiking up several points to 57.9 from 54.8, and the latter climbing to 55.6 from 52.1. Mixed practice, however, tumbled down to 55.4, and institutional projects experienced a slight drop from 50.8 to 50.4. For the second month in a row the project inquiries index has taken a dive, falling from 63 to 58.6.
Recent economic figures from the Architecture Billings Index (ABI) revealed that summer finished on a high note with a significant rise in the demand for design services. The ABI score for the month of August jumped more than a full point from July climbing up to 53.8 from 52.7 (any score above 50 indicates positive growth). AIA Chief Economist, Kermit Baker, sees positive growth for the industry, but remains cautious about the future. “As business conditions at architecture firms have improved eleven out of the past twelve months, it is fair to say that the design professions are in a recovery mode,” Baker said. “This upturn signals an impending turnaround in nonresidential construction activity, but a key component to maintaining this momentum is the ability of businesses to obtain financing for real estate projects, and for a resolution to the federal government budget and debt ceiling impasse.” All three regions except for the South experienced an upswing in billings. Numbers for the West (54.8) rose sharply by more than three points from July. The Midwest also made considerable improvement, jumping from 50.8 the previous month to 52.8 in August. The Northeast (54.4) remained steady, increasing by just a smidgen. The South (51.9), however, didn't fare as well falling by more than two points. All in all, the different sectors came out strong. The numbers for mixed practice indicated strong progress, surging from 56.9 to 60.1 in August. Commercial/Industrial (54.8) and Institutional (50.8) sectors remain in good shape, whereas, multi-family residential dropped down to 52.1 from 53.3 in July. Even as the ABI score shows signs of improvement in the industry, unfortunately, the project inquiries tumbled from 66.4 in July to 63.0 in August.
Summer isn't slowing the demand for design services, according to the AIA's latest economic figures. In fact, numbers are on the rise. The AIA's Architecture Billings Index (ABI) for July increased more than a full point spike in non-residential construction activity from June's ABI score of 51.6 to 52.7 (any score above 50 indicates positive growth). Most notably, the new projects inquiry index produced positive results with a substantial increase from 62.6 the previous month to 66.7 in July. While numbers lapsed in most regions in July, the Midwest came out strong climbing to 50.8 from 48.3 in June. The Northeast fell more than a point from 55.6 in June to 54.3. The West slipped ever-so-slightly from 51.2 to 51.1. And the South dropped to 54.2. Mixed practice was the only sector to pull through and show significant progress shooting up more than four points to 56.9 in July. The other industry sectors experienced a small decline: commercial / industrial (54.2), multi-family residential (53.3), institutional (50.6). “There continues to be encouraging signs that the design and construction industry continues to improve,” said AIA Chief Economist, Kermit Baker, in a statement. “But we also hear a wide mix of business conditions all over the country, ranging from outstanding and booming to slowly improving to flat. In fact, plenty of architecture firms are reporting very weak business conditions as well, so it is premature to declare the entire sector has entered an expansion phase.” In spite of the industry's promising growth, the same positive trend has not been reflected in the compensation for architecture positions. AIA published its recent compensation survey, revealing minimal change in salaries since the recession in 2008. "Between 2011 and 2013, average total compensation for architecture positions—including base salary, overtime, bonuses, and incentive compensation—increased only slightly over one percent per year, barely more than the average increase in compensation between 2008 and 2011, when the construction sector was still in steep decline," the report read.
Numbers are staying strong. AIA's Architecture Billing Index for the month of June has revealed steady, but positive growth. The June ABI score of 51.6 reflected only a slight drop from May's score of 52.9, and still indicates a general upswing for the non-residential construction industry. More projects will likely be on the horizon. The new projects inquiry index reported a significant climb in numbers to 62.6 from 59.1 the previous month. “With steady demand for design work in all major nonresidential building categories, the construction sector seems to be stabilizing,” said AIA Chief Economist, Kermit Baker, in a statement. “Threats to a sustained recovery include construction costs and labor availability, inability to access financing for real estate projects, and possible adverse effects in the coming months from sequestration and the looming federal debt ceiling debate.” Across the country, the numbers were generally up with the exception of the West, which experienced a slight dip to 51.2 from 52.1 in May. It was, however, a particularly robust month for the Northeast which came out with a score of 55.6. The South also finished strong with an uptick to 54.8 from 50.9 last month in June. And even the Midwest saw progress with a score of 48.3. All sectors remain on solid footing but institutional has slowed down a smidgen: commercial / industrial (54.7), multi-family residential (54.0), mixed practice (52.4), institutional (51.8).
Underscoring the fragility of the economic recovery, the April AIA's Architecture Billings Index dipped into negative territory for the first time in nine months. The slump to 48.6 was significant, down from 51.9 in March (any score above 50 indicates positive growth). “Project approval delays are having an adverse effect on the design and construction industry, but again and again we are hearing that it is extremely difficult to obtain financing to move forward on real estate projects,” said AIA Chief Economist, Kermit Baker, in a statement. “There are other challenges that have prevented a broader recovery that we will examine in the coming months if this negative trajectory continues. However, given that inquiries for new projects continue to be strong, we’re hopeful that this is just a short-term dip.” Regional indexes reversed recent trends with the South leading at 52.6 followed by the West at 50.7. The Midwest slid into negative billings at 49.4, while the East dragged down the overall average with an index of 48.2. By sector, multi-family residential remained strong at 52.0, while institutional work hovered in positive territory at 50.1. Commercial/industrial (49.2) and mixed-practice (48.6) slumped. The inquiry index, for possible new projects, remained robust at 58.5.
The Architecture Billings Index has reported a slight fluctuation in design activity over the past few months, recording a score of 51.9 for March, a 3 point decrease from February’s mark of 54.9. Any score above 50 indicates positive growth. All four regions were in positive territory with the Northeast leading at 54.6, the Midwest at 53.9, the South not far behind at 53.6, and the West finishing with a 51.9. Inquiries for new projects came in at 60.1. “Business conditions in the construction industry have generally been improving over the last several months,” said AIA Chief Economist, Kermit Baker, in a statement. “But as we have continued to report, the recovery has been uneven across the major construction sectors so it’s not a big surprise that there was some easing in the pace of growth in March compared to previous months.” By sector, all areas remained in positive territory: Multi-family residential scored the highest at 56.9, commercial/industrial scored a 53.5, mixed practice followed with a 53.3, and institutional came in last but stayed positive at 50.6.
Crain’s Chicago Business asks a good question: “Is it finally a good time to be an architect?” The story, by Micah Maidenberg, picks up on an encouraging trend in the architecture billings index. Both nationally and in the Midwest, architecture billings are back above 50, the threshold that denotes growth. In 2008, both tanked to about 35. During that time the number of architects in Chicago also dropped 33 percent, from 9,800 to 6,600 at the lowest point in March 2011. That's slightly higher than the 31 percent drop nationally. It has since risen above 7,000. Average base pay for starting architects, however, has mirrored another, less encouraging national trend: wage stagnation. Entry-level architects in metro Chicago made 3.7 percent less in 2011 than in 2008. Experienced architects saw their salaries rise 9 percent on average over that time period.
Over the past few months the Architecture Billings Index has shown the strongest growth in the demand for design services since 2007 and once again reports an incrementally strengthened score of 54.9 for February, a slight increase from a 54.2 in January (and a 51.2 in December). All four regions scored above 50, an indicator of positive growth. The Northeast performed the best at 56.7, the West and the Midwest tied at 54.7, and the South finished with a 52.7. Inquiries for new projects scored the highest mark since January 2007, steadily inching to a 64.8 from last month's 63.2. “Conditions have been strengthening in all regions and construction sectors for the last several months,” AIA Chief Economist Kermit Baker said in a statement. “Still, we also continue to hear a mix of business conditions in the marketplace as this hesitant recovery continues to unfold.” By sector, all areas were in positive territory and showed a healthy increase from January: mixed practice (56.9), commercial/industrial (53.3), institutional (50.2), and multi-family residential (60.9), which particularly soared from a 54.9 in January.
The Architecture Billings Index showed renewed strength in January, with a jump to 54.2 from 51.2 in December (any score above 50 indicates positive growth). All four regions were in positive territory with the Midwest leading at 54.4, the long struggling West showing strength at 53.4, the South came in at 51.7, and the Northeast at 50.3. The Index posted the strongest gains since November 2007. Inquiries for new projects also surged, rising to 63.2 from 57.9 in December. “We have been pointing in this direction for the last several months, but this is the strongest indication that there will be an upturn in construction activity in the coming months,” said AIA Chief Economist, Kermit Baker, in a statement. “But as we continue to hear about overall improving economic conditions and that there are more inquiries for new design projects in the marketplace, a continued reservation by lending institutions to supply financing for construction projects is preventing a more widespread recovery in the industry.” By sector, all areas were in positive territory: mixed practice (54.9), multi-family residential (54.5), commercial/industrial (52.0), and institutional (50.2).