Architecture Billings Index Shows Balanced Growth in All Regions

‘The first quarter started out on uneasy footing, but ended on an upswing entering the traditionally busy spring season’

AIA Economics & Market Research Group
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The American Institute of Architects’ March Architecture Billings Index (ABI) increased 3.6 points for the month to 54.3, overcoming much of the weakness seen at the start of the year. The March score reflects a sizable increase in design services (any score above 50 indicates an increase in billings).

The ABI is derived from a monthly “Work-on-the-Boards” survey sent to a panel of AIA member-owned firms, and is considered a nine- to twelve-month glimpse into the future of nonresidential construction spending activity.

The new-projects inquiry index was 59.8, down from a reading of 61.5 the previous month, and the new design contracts index slipped 2.4 points to 52.3. Despite this erosion, both indices remain firmly in expansion territory (over 50).

“The first quarter started out on uneasy footing, but fortunately ended on an upswing entering the traditionally busy spring season,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “All sectors showed growth except for the commercial/industrial market, which, for the first time in over a year displayed a decrease in design services.”

Key March ABI highlights:

  • Billings in all regions improved
  • Regional averages: Midwest: 54.6; South: 52.6; Northeast: 52.4; West: 50.2
  • Residential and mixed-use billings both rebounded back into expansion territory
  • Billings in the commercial/industrial rose slightly, but remained below 50, signaling continued moderation in sector activity
  • Sector index breakdown: multi-family residential: 54.6; mixed practice: 53.7; institutional: 52.9; commercial/industrial: 49.8
  • Project inquiries index: 59.8
  • Design contracts index: 52.3

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

The Wells Fargo Economics Group’s analysis of the March ABI was upbeat: “With the spring season underway, the improvement in the billings index bodes well with our outlook for overall nominal private nonresidential construction to grow at a 4.5% pace in 2017.”