Architecture Billings Index Slips But Should Sustain Construction Growth

The ABI slipped 1.3 points to 50.6 in April, remaining in growth territory. The institutional billings index rose one point, but is the only major sector with shrinking billings activity

American Institute of Architects

After beginning the year with a decline, the Architecture Billings Index (ABI) has posted three consecutive months of increasing demand for design activity at architecture firms. As a leading economic indicator of nonresidential construction activity, the ABI reflects the approximate nine to twelve-month lead time between architecture billings and construction spending.

The American Institute of Architects (AIA) reported the April ABI score was 50.6, down from the mark of 51.9 in the previous month. This score still reflects an increase in design services (any score above 50 indicates an increase in billings). The new-projects-inquiry index was 56.9, down from a reading of 58.1 the previous month.

“Architects continue to report a wide range of business conditions, with unusually high variation in design activity across the major building categories,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “The strong growth in design contracts – the strongest score for this indicator since last summer -- certainly suggests that firms will be reporting growth in billings over the next several months.”

After monthly declines through the first quarter of 2016, institutional billings rose 1 point to 49, signaling that this sector could see conditions improve. Commercial/industrial billings were higher on the month as industrial outlays remain strong.

April ABI highlights

Regional averages:

  • South 52.2
  • Northeast 51.5
  • West 50.8
  • Midwest 50.8

Sector index breakdown:

  • Multi-family residential 53.7
  • Commercial/industrial 52.0
  • Mixed practice 50.0
  • Institutional 49.0

Project inquiries index: 56.9

Design contracts index: 54.3

The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

Latest