Posts tagged with "Kermit Baker":

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Much to Kermit Baker’s chagrin, the January Architecture Billings Index (ABI) thaws prematurely

It's time to panic. Well, not panic, maybe, but frown a little bit: after a generally positive showing in 2015, the Architecture Billings Index (ABI) is back in negative territory. The January ABI score was 49.6, down from 51.3 in December 2015. As AIA Chief Economist Kermit Baker will have you know, any score below 50 indicates a decrease in billings. “The fundamentals are mostly sound in the nonresidential design and construction market,” said AIA Chief Economist Kermit Baker in a statement. “January was a rocky month throughout the economy, with falling oil prices, international economic concerns, and with steep declines in stock market valuations in the U.S. and elsewhere. Some of the fallout of this uncertainty may have affected progress on design projects.” (If these numbers seem to contradict the previous month's readings, that's because each January, the AIA research department updates seasonal factors used to calculate ABI, which results in a revision of recent ABI values. January's new projects inquiry index was down 5.2 points from the previous month, for a score of 55.3. Design contracts were also down, by 0.1, but remained in positive territory for a January score of 50.9. Sector billings were mixed. Multi-family residential billings were down one point, at 51.9, and institutional billings were at 49.9, down 2.3 points over the previous month. Commercial/industrial billings (50.5) were up by 3.2 points, while mixed practice (49.0) rose 2.5 points. The Northeast (50.4) and Midwest (48.9) saw increases of 3.7 and 2.8 points, respectively, while the South (50.3) and West (50.8) saw decreased of 3.0 and 2.9 points. Don't forget: The ABI, the leading economic indicator of construction activity, reflects a nine to 12 month lead time between architecture billings and construction spending. The national index, design contracts, and inquiries are calculated monthly, while the regional and sector categories are calculated as a three-month moving average.
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The Architecture Billings Index finishes strong in 2015

The Architecture Billings Index (ABI) closed 2015 in positive territory. Demand for design services increased in eight out of 12 months last year. “As has been the case for the past several years, there continues to be a mix of business conditions that architecture firms are experiencing,” said AIA Chief Economist Kermit Baker in a statement.  “Overall, however, ABI scores for 2015 averaged just below the strong showing in 2014, which points to another healthy year for construction this year.” The ABI is the leading indicator of construction activities that reflects the approximately nine to 12 month lead time between architecture billings and construction spending. The December ABI score was 50.9, up from 49.3 in November. As Kermit Baker will have you know, any score above 50 means an increase in billings. The December new projects inquiry index was 60.2, up 1.6 points from November, while the design contracts index was down 2.5 points, to 51.0, over the same period. The national, new projects inquiry, and design contracts indices are calculated monthly. Except for the Northeast with 46.7 (a 0.5 increase over November), the regional numbers were down for December. The West was at 53.7; the South, 53.3; and the Midwest 46.1. (That's a decline from 54.5, 55.4, and 47.8, respectively.) The sector index breakdown fared similarly. At 46.5, mixed practice was down 1.1 points from November. Multi-family residential fell 0.9 points to 52.9, whilecommercial/industrial billings fell to 47.3, from 51.0 in November. Institutional billings saw a gain of 0.2, to 52.2, for December. The regional and sector categories are calculated as a three month moving average.
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Kermit Baker is unruffled by the 3.8 point drop in November’s Architecture Billings Index

As temperatures dipped in November, so did the Architecture Billings Index (ABI). The ABI was 49.3, a 3.8 point drop from October's 53.1. Any score below 50 represents a decrease in billings. AIA Chief Economist Kermit Baker seemed unfazed by the drop in billings. “Since architecture firms continue to report that they are bringing in new projects, this volatility in billings doesn’t seem to reflect any underlying weakness in the construction sector. Rather, it could reflect the uncertainty of moving ahead with projects given the continued tightness in construction financing and the growing labor shortage problem gripping the entire design and construction industries.” New projects inquiries were at 58.6, a touch above last month's reading of 58.5. The design contracts index rose to 53.5, an increase 1.8 points from October. Regional averages were mostly down: the Midwest sank to 47.8 from 52.6 last month, the Northeast dropped three points to 46.2, and the South dropped 0.8 to 55.4. The West gained 0.1 points over last month, coming in at 54.5. Billings by sector were a mixed bag. Multi-family residential and institutional billings climbed, while commercial/industrial and mixed practice fell. At 53.8, multi-family residential was up 1.3 points from October. Institutional billings gained 0.6 points in the same time frame. Commercial/industrial fell 4.1 points to 51, and mixed practice was at 47.6, an astonishing 7.3 point drop from the previous month. A quick note on the data: national index, design contracts, and inquiries are calculated monthly. Sector and regional categories are calculated as a three month moving average.
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October’s Architecture Billings Index down slightly from September, though demand for design services remains high

In fall, warm blooded animals usually slow down as they prepare to hibernate for winter. Yet, the Architecture Billings Index (ABI) demonstrates few signs of winter slumber, with increased demand for design services in almost every category. The October ABI of 53.1, the AIA reports, is down 0.6 points from September, but any score over 50 represents an increase in billings. The ABI is the primary economic indicator of construction activity, reflecting a nine to 12 month lead time between architecture billings and construction spending. “Allowing for the possibility of occasional and minor backsliding, we expect healthy business conditions for the design and construction industry to persist moving into next year,” AIA Chief Economist Kermit Baker said in a statement. “One area of note is that the multi-family project sector has come around the last two months after trending down for the better part of the year.” October's new projects inquiry index was 58.5, down from September's 61.0. Design contracts fell by 1.5 points to 51.7. The South lead the regional averages with a score of 56.2, up from a score of 54.5 in September. The West trailed at 54.4, followed by the Midwest (52.6), and the Northeast at at a paltry 49.2, though up 5.5 points from the previous month. Commercial and industrial construction led the sector breakdowns at 55.1 points, up 4.2 points from September. Mixed practice jumped 2.3 points to 54.9, and multifamily residential climbed 3 points to 52.5. Institutional sector held steady at 51.4, a drop of 0.1 from last month. The national index, new projects inquiries, and design contacts indexes are calculated monthly, while the regional and sector categories are calculated as a three month average.
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Architecture Billings Index up for September, though architecture talent pool is not deep enough for demand

It may be getting colder outside, but the Architecture Billing Index (ABI) is heating up. In September, the ABI bounced back to positive territory, and has seen growth in two-thirds of the months this year. The AIA reported that the September ABI was 53.7, up 4.6 points from August. Any score above 50 marks an increase in billings. “Aside from uneven demand for design services in the Northeast, all regions are project sectors are in good shape,” said AIA Chief Economist Kermit Baker in a statement. “Areas of concern are shifting to supply issues for the industry, including volatility in building materials costs, a lack of a deep enough talent pool to keep up with demand, as well as a lack of contractors to execute design work.” To that end, the new projects inquiry was down to 61.0, a decrease of 0.8 points from August. The design contracts index was at 53.2, a drop of 2.1 points from August. The South (54.5) led the Midwest (54.2) by a hair for regional averages. The West, at 51.7, was up 1.7 points from August, while the Northeast placed last, at 43.7, a drop of 3.1 points from last month. By sector, commercial/industrial (50.9) was the only category with positive growth. Multi-family residential flatlined at 49.5, while institutional dropped 2.2 points to 51.5. Mixed practice dropped 0.2 points to 52.6. It's important to note that the regional and sector indices are calculated as a 3-month moving average, while the design contracts, inquiries, and national index are monthly figures.
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Architecture Billings Index declines sharply in August after a strong year

The Architecture Billings Index declined in August after a relatively robust year. The August ABI score was 49.1, a decline of 5.6 points from July. In July, the new projects inquiries index was 63.7, while August's number decreased by 1.9 points to 61.8. Regional averages were 50.2 (West), 56.1 (Midwest), 46.8 (Northeast), and 53.8 (South). "Over the past several years, a period of sustained growth in billings has been followed by a temporary step backwards," AIA Chief Economist Kermit Baker said in a statement. "The fact that project inquiries and new design contracts continue to grow at a healthy pace suggests that this should not be a cause for concern throughout the design and construction industry." By sector, mixed practice (52.8) and institutional (53.7) were in positive territory, while commercial / industrial (49.7) and multi-family residential (49.5) just skirted the positive mark. The design contracts index was 55.3 for August, an increase of 0.8 points over July.
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Institutional projects lift the Architecture Billings Index to its highest score since 2007

While you were out grilling hot dogs and searching for the song of the summer (give it up, there isn’t one), the Architecture Billings Index was climbing to its highest score since 2007. In June, the ABI posted a 55.7, up significantly from 51.9 in May. The new projects inquiry index also had a great month, moving from 61.5 to 63.4. By sector, institutional was way ahead of the pack with a score of 59.1. It was followed by mixed practice (54.7), commercial/industrial (51.6), and multi-family residential (47.0). By region, it was Midwest with gold (57.2), South with silver, (54.9), West with bronze, (50.7), and Northeast (50.4) with whatever comes after bronze. A firm handshake and a slice of pizza? “The June numbers are likely showing some catch-up from slow growth earlier this year. This is the first month in 2015 that all regions are reporting positive business conditions and aside from the multi-family housing sector, all design project categories appear to be in good shape,” said AIA Chief Economist Kermit Baker in a statement. “The demand for new apartments and condominiums may have crested with index scores going down each month this year and reaching the lowest point since 2011.”
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The Architecture Billings Index heads south in April

The Architecture Billings Index (ABI) doesn’t want to hear it right now–it knows it's not in a great place, okay? After the economic index started looking up last month—we’re talking 51.7!—the ABI dropped down to 48.8 in April. And, as we all know, any score below 50 means a decrease in billings. Here's a silver lining, though: the New Projects Inquiry did scoot up from 58.2 to 60.1. If we dig into the numbers, it becomes clear that one region (spoiler: the Northeast) ruined the party. The South reported an impressive 55.8 and the West wasn’t too shabby with a 52.9. The Midwest was “eh” at 49.9, but the Northeast was a real bummer last month posting a 43.2. By sector it was more of a mixed-bag with institutional and mixed practice both at 51.8, multi-family residential at 49.0, and commercial/industrial at 48.9. AIA Chief Economist Kermit Baker is staying positive, saying in a statement: “The fundamentals in the design and construction industry remain very healthy.” This would be reassuring if it wasn’t almost exactly what John McCain said in 2008, ("the fundamentals of the economy are strong"), when trying to reassure voters the global economy wan't collapsing before their eyes. But to be fair to Baker, he has some specifics to back up his optimism. “The fact that both inquires for new projects and new design contracts continued to accelerate at a healthy pace in April points to strong underlying demand for design activity. However, April would typically be a month where these projects would be in full swing, but a severe winter in many parts of the Northeast and Midwest has apparently delayed progress on projects," he said.
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The Architecture Billings Index continued climbing in March

Everyone’s favorite billings index is once again posting some impressive numbers just as winter loosens its cold grip and summer makes its long-awaited appearance. As AN previously reported, the Architecture Billings Index (ABI) had a slow start this year, but jumped into positive territory in February with a score of 50.4. Now, the ABI is taking things even more seriously, scooting up to 51.7 in March. And if you’re looking for more good news, we’ve got it: the new projects inquiry index jumped from 56.6 to 58.2. Want to talk regional and sector breakdown? Great, let’s talk regional and sector breakdowns. In March, the South was out front with a score of 54.5. It was followed by the Midwest at 51.0, the West at 50.4, and the Northeast at a very disappointing 45.8. By sector, it was institutional at 53.2, commercial/industrial at 53.0, multi-family residential at 49.7, and mixed practice at 46.2. “Business conditions at architecture firms generally are quite healthy across the country. However, billings at firms in the Northeast were set back with the severe weather conditions, and this weakness is apparent in the March figures,” AIA Chief Economist Kermit Baker said in a statement. “The multi-family residential market has seen its first occurrence of back-to-back negative months for the first time since 2011, while the institutional and commercial sectors are both on solid footing.” https://youtu.be/7ziDqtSRVdo  
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Architecture Billings Index bounces back to positive territory in February

It looks like the Architecture Billings Index is finally ready to start 2015. As AN reported last month, the ABI failed to impress in January, posting a 49.9, which technically puts the outlook in negative territory with 50 marking the cut off. That’s right, negative territory for the first time in ten months. Thanks ABI, happy New Year to you, too. But what a difference a month makes. The ABI appears to be returning to a happier place. In February the ABI moved up to 50.4—that’s not a huge jump, but it does cross the crucial 50 threshold that indicates growth. This good news, though, comes with its own bad news. Here goes: While the ABI ticked up, the new projects inquiry fell from 58.7 to 56.6. The Design Contracts Index was also recorded at exactly 50.0. By region, the South (52.5) and Midwest (50.2) were way out front while the Northeast (48.0) and West (46.7) stayed in negative territory. By sector institutional (52.2) and commercial / industrial (51.4) led the pack, followed by multi-family residential (48.9) and mixed practice (45.3). “The health of the institutional market has been the key factor for positive business conditions for the design and construction industry in recent months, and it is encouraging to see that sector remain on solid footing,” AIA Chief Economist Kermit Baker said in a statement. “However, we’re seeing some slowing in the other major construction sectors. Design billings for residential projects had its first negative month in over three years, and commercial design billings have seen only modest growth in recent years.”
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Architecture Billings Index starts 2015 in negative territory

The month of January is supposed to be the time of year when we put our best foot forward and onto a treadmill. “New Year, New Me,” we tell ourselves as we pretend to train for that marathon and convince ourselves that fruit is somehow an appropriate substitute for dessert. (It's not and you know that.) With all of this in mind, we expected some best-foot-forward kind of numbers from the January Architecture Billings Index (ABI). But, no folks, it turns out that the ABI not only lost momentum from last year, it plunged into negative territory. Well, to be fair, it didn’t really plunge into negative territory so much as it dipped a toe into it, posting a score of 49.9, down from 52.7 in December. Since any score above a 50 indicates an increase in billings, 49.9 is not the end of the world. By region, the South (54.8), West (49.3), and Midwest (50.8) all kept things positive, but the Northeast only managed a 46.0. Something similar played out by sector, with three of the four categories posting gains. Multi-family residential (51.4), institutional (53.0), and commercial/industrial (50.9), were all above 50, but then mixed practice went and ruined everything with a 46.9. The new projects inquiry index also had a sluggish start to the year, posting a 58.7 in January, down from 59.1 in December. The design contracts index meanwhile was recorded at 51.3. All things considered, AIA Chief Economist Kermit Baker remained calm. “This easing in demand for design services is a bit of a surprise given the overall strength of the market over the past nine months,” he said in a statement. “Likely some of this can be attributed to severe weather conditions in January. We will have a better sense if there is a reason for more serious concern over the next couple of months.”
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The Architecture Billings Index ends 2014 in positive territory

Back in November, we told you how Taylor Swift’s hit song “Shake It off” perfectly summed up how we should feel about the Architecture Billings Index’s disappointing showing from the month before. Sure, the ABI’s momentum had slowed to 55.2 in October, but since any score above 50 indicates an increase in billings, we could just shake off any negativity. Now with 2014 gone, how did the Index shape up through the end of the year? To the numerous naysayers who wrote in saying we couldn't fit another Taylor Swift reference into our coverage of architecture billings data, watch this: As you may already know, we dropped the ball in December and did not post the freshest ABI data, creating what the superstar would call a “Blank Space.” Are we taking this Taylor Swift connection too far? Probably, so let’s move right to the numbers because we have a lot of catching up to do. In December, the ABI was recorded at 52.2, that's up from the 50.9 in November. The project inquiry index, unfortunately, did not have as good of a time—dropping from 58.8 to 58.2. But that dip was nothing compared to the design contracts index which fell from 54.9 to 49.9. By region, the Southwest and West performed best posting 56.8 and 52.9, respectively. The Midwest just managed to stay in positive territory at 50.8 while the Northeast slipped below the line to 45.5. And by sector, it was multi-family residential (55.7) followed by institutional (52.5) and then commercial / industrial (51.2). Meanwhile, mixed-practice was all the way down at 45.8. “Business conditions continue to be the strongest at architecture firms in the South and the Western regions,” said AIA Chief Economist Kermit Baker, in a statement. “Particularly encouraging is the continued solid upturn in design activity at institutional firms, since public sector facilities were the last nonresidential building project type to recover from the downturn.” Overall, 2014 was a good year for the ABI with 10 out of 12 months showing increasing demand for design services. It was also a very good year for Taylor Swift.