Posts tagged with "Kermit Baker":

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Shake off the October Architecture Billings Index

The party’s over, folks. Take down the streamers, re-cork that bottle of champagne, and turn off the Taylor Swift. Actually, on second thought, turn the Swift back on because “Shake It Off” might be exactly what we need to hear right now. We’ll tell it to you straight. After months of strong momentum, the Architecture Billings Index (ABI) dropped from a 55.2 in September to a 53.7 in October. Here’s where Ms. Swift plays back into the data set—since any score above 50 indicates an increase in billings, things are still in the positive territory so we can shake, shake, shake the October Architecture Billings Index score off, more or less. By region, the South was still feeling that summer heat, posting a strong 58.4. The West wasn’t too far behind with a 56.1, followed by the Midwest at 54.4. The Northeast broke the positive streak with a sub-50 score of 47.0. We're not mad Northeast, we're just...disappointed? Okay, moving on. Let's talk sector, shall we? It was mixed practice at the front of the pack with a 56.9, followed by multi-family residential (54.7), institutional (54.4), and commercial / industrial (52.3). While things are still positive overall, the Design Contracts Index and the Project Inquiry Index both lost some steam, dropping from 56.8 to 56.4 and from 64.8 to 62.7, respectively. But despite these disappointing figures, AIA Chief Economist Kermit Baker remained optimistic. “Though it has been slow in emerging, we’re finally seeing some momentum develop in design activity for nonprofits and municipal governments, and as such we’re seeing a new round of activity in the institutional sector,” he said in a statement. “It will be interesting to see if and how the results of the mid-term Congressional and gubernatorial elections impact this developing momentum.” In short, shake it off.
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The September Architecture Billings Index is on top of the world

The Architecture Billings Index (ABI) report is back and it’s ready to party so drop that Monday morning cup of coffee and take a sip of the hot data the AIA is serving up. Last month, while we were all just going about our everyday lives, the ABI was soaring to new heights. Any score above a 50 indicates an increase in billings, but the ABI wasn’t satisfied with playing it safe. No, it went all the way to 55.2. Sure, it’s not the 55.8 that got the world talking in July, but it’s still good news and better than August’s 53.0, am I right? There's more. The New Projects Inquiry, presumably not wanting to be upstaged by the big kid on campus, did some work of its own and leaped from 62.6 to 64.8. As for the Design Contracts Index, it ticked down from 56.9 to 56.8. Get better soon, Design Contracts Index. We’re pulling for you. “Strong demand for apartment buildings and condominiums has been one of the main drivers in helping to keep the design and construction market afloat in recent years,” said AIA Chief Economist Kermit Baker in a statement. “There continues to be a healthy market for those types of design projects, but the recently resurgent Institutional sector is leading to broader growth for the entire construction industry.” So how did it all shake out? By region the South performed best with a 55.3 followed by the Midwest at 55.1. The West kept it cool with a 54.2, and the Northeast plunged but played it safe at 51.0. Over on the sector side of things, multi-family residential had the strongest month with a 55.3. Institutional wasn’t too far behind at 54.9 and was followed by mixed practice at 53.8. Industrial kept us on the edge of our seats with a nail-bitingly close 50.8. Before we leave you today, let’s just check in on the Projects Inquiry Index. Last time was at 62.6. Where did things stand one month later? 64.8.
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Relive the summer with the Architecture Billings Index’s August report

As the summer turns to fall, it’s easy to look back and remember the season that was. There was that outdoor concert, that weekend trip to Montreal, that margarita served in a mason jar, and that time you and your neighbor Karl tried to repave the deck. Hey there, chin up, no need to get so nostalgic just yet, that's what the winter is for. There is one last way to relive that glorious summer right now. How? Through the Architecture Billings Index (ABI), of course. With the newly-released August-time data it's like the Autumnal Equinox never even happened at all. Lather up the sunscreen and throw on those shades because here we go! In August, the ABI posted a 53.0, which is down from July’s 55.8, but it's not all bad news, because, say it with us, “any score above 50 indicates an increase in billings.” Exactly, very good. A similar story played out with the new projects inquiry index; it dropped from 66.0 in July to 62.6. No reason to get all bent out of shape, things are still looking up. For one, design contracts jumped from 54.9 to 56.9 in August. “One of the key triggers for accelerating growth at architecture firms is that long-stalled construction projects are starting to come back to life in many areas across the country,” AIA Chief Economist Kermit Baker said in a statement. “Long awaited access to credit from lending institutions and an increasing comfort level in the overall economy has helped revitalize the commercial real estate sector in recent months. Additionally, though, a crucial component to a broader industry-wide recovery is the emerging demand for new projects such as education facilities, government buildings and, in some cases, hospitals.” Let’s dig into the numbers even further, shall we? By region, the Northeast led the pack at 58.1, followed by the South at 55.1, and then the West at 52.5. The Midwest squeaked over the positive line at 51.0. By sector, multi-family residential pulled a Northeast and posted a 58.1. Mixed practice wasn’t far behind at 57.1, followed by institutional at 54.0. Industrial really played it close in August posting a 50.4. Living on the edge now are we, Industrial?
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The Architecture Billings Index Is Crushing It

You should probably be sitting down for this because there is some big news regarding the Architecture Billings Index (ABI) that is not for the faint of heart. With that disclaimer out of the way, let’s proceed. So everyone knows that the ABI has really been flexing its muscle this summer—it posted a 52.6 in May and then a 53.5 in June. Those are pretty solid scores given that anything above a 50 indicates an increase in billings, but then July happened—and it happened in a big way. Last month, the ABI posted a 55.8. That's important news considering the index hasn't been that high since 2007—since before the whole global financial meltdown. What truly makes this news so special is that everyone played a part. By region, the Northeast won the gold with a score of 55.5, the South took silver with a strong 55.1, and the Midwest got the bronze at 54.1. While the West didn't take home a medal, it still scored in the positive territory with a 53.5. So, if you think about it, they are all winners. The same can be said for each sector. Mixed practice really blew things out of the water with a score of 61.0, multi-family residential wasn't too far back at 56.5, institutional posted a respectable 53.3, and commercial/industrial landed in positive territory at 51.2.How about the design contracts index? How did that do? Well, how does a 54.9 sound to you? Pretty good, right? And the new project inquiries index? Well, have you ever heard of a 66.0? And that’s not all! The forecast looks good too. “Business conditions for the design and construction marketplace, and those industries associated with it, appear to be well-positioned for continued growth in the coming months,” AIA Chief Economist Kermit Baker, said in a statement. “The key to a more widespread boost in design activity continues to be the institutional sector which is starting to exhibit signs of life after languishing for the better part of the last five-plus years.” Let’s finish things off here today with just a little more data. The American Society of Interior Designers recently announced that in June the Interior Design Billings Index (IDBI) scored a 55.8 and the Inquiries Index went even higher to 58.2. Sure, that’s obviously down from May, but still positive, still positive.
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November Billings Reveal a Drop in Design Services for the Second Month in a Row

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.
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September Billings Report Show Steady Positive Growth for Architecture Economy

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.
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Summer Continues to Soar with Strong August Billings Report

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.
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July Architecture Billings Going Strong as Average Compensation Stagnates

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.
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AIA Billings Dip Into Negative Territory For First Time in Nine Months

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.
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Architecture Billings Index Fluctuates Downward, But Still Positive

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.
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Five Alive! Billings Index Climbs Again

The AIA's Architectural Billings Index (ABI) stayed in positive territory for the fifth straight month in December with a score of 52.0 (any score above 50 indicates growth). The level of growth edged down slightly from November's mark of 53.2. By region, the Midwest is currently performing the best (55.7), followed by the Northeast (53.1), and the South (51.2). The West remains in negative territory (49.6). “While it’s not an across the board recovery, we are hearing a much more positive outlook in terms of demand for design services,” said AIA Chief Economist, Kermit Baker, in a statement. Federal budget cuts, however, could impact the recovery. “Moving into 2013 we are expecting this trend to continue and conditions improve at a slow and steady rate. That said, we remain concerned that continued uncertainty over the outcomes of budget sequestration and the debt ceiling could impact further economic growth,” Baker said. By sector, commercial/industrial led with 53.4, followed by mixed practice at 53.0, institutional at 50.9, and multi-family residential at 50.5. Project inquiries were also in positive territory at 59.4, down just slightly from November's 59.6. The National Association of Home Builders is also reporting growth and forecasting greater gains:
Multifamily production, which has posted a 273 percent gain from its fourth quarter trough of 82,000 units in 2009 to 306,000 units in the final quarter of 2012, is expected to reach what is considered a normal level of production by 2014. The single-family market, which has the farthest to go, was running at 44 percent of normal production in the fourth quarter of 2012. Single-family starts are expected to steadily rise to 52 percent of what is considered a typical market by the fourth quarter of this year and 70 percent of normal by the fourth quarter of 2014. NAHB is forecasting 949,000 total housing starts in 2013, up 21.5 percent from 781,000 units last year.
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AIA Billings Report Scores Fourth Month of Gains

A fourth straight month of increased billings by AIA members signals the architectural economy may finally have turned the corner. The Architectural Billings Index (ABI) ticked up to 53.2 from last month's 52.8 (any score above 50 indicates an increase in demand for design services). Project inquiries also rose slightly to 59.6 from 59.4. “These are the strongest business conditions we have seen since the end of 2007 before the construction market collapse,” said AIA chief economist, Kermit Baker. Activity was greatest in the Northeast (56.3) and the Midwest (54.4). The South remained in positive territory at 51.1, while the South dipped into a slight decline at 49.6, down from the previous month's 51.8. The AIA cautioned that the A/E/C sector's growth could be drastically undercut if the country goes off the so-called "fiscal cliff." Uncertainty about spending cuts and tax increases have already put numerous projects on hold.