Latest ABI Reflects Strongest Growth in Nearly Five Years
Federal budget uncertainty, however, dampens optimism for 2013
By Kermit Baker, Hon. AIA
AIA Chief Economist
November saw the fourth straight monthly increase in the
AIA’s Architecture Billings Index (ABI), with the pace of
growth accelerating each month. At 53.2, the ABI is
reflecting the strongest growth in billings at architecture
firms since the end of 2007, just before the recession in
design revenue began.
At present, firms in the Northeast and Midwest are
reporting a reasonably sharp upturn in business
conditions. Firms in the South are reporting a modest
increase, and firms in the West a very modest decline.
However, regional revenue trends at architecture firms
have been quite variable in recent months, and are likely
to continue to vary in the months ahead.
By construction sector, clearer patterns are beginning to
emerge. The residential index was 55.9 for November; this
index has been above 55 for four straight months, a level
of growth has not been seen since late 2005 near the end
of the housing boom. The commercial/industrial index
moved back into growth territory, and the institutional
index remained barely in growth territory, with an index
reading just above the 50 threshold. Both of these sectors
are currently fragile enough that they are more vulnerable
to the fluctuations of the broader economy, particularly
the federal budget and debt negotiations.
Housing strong, but rest of economy teetering
In a long-awaited turnaround, the housing market has
turned into one of the strongest sectors in the economy.
Housing starts in the second and third quarters have been
more than 25 percent above the same period in 2011.
However, the rest of the economy has been relatively
disappointing. Payrolls increased by a modest 146,000 in
November, similar to the gains in September and October.
Though the national unemployment rate declined from
8.3 percent in July to 7.7 percent, much of this resulted
Recent Related:
Business Conditions at Architecture Firms Continue to Improve
ABI Reflects Strongest Billings in Nearly Two Years
August Billings Stabilize After Four Straight Declines
Architecture Firm Billing Losses Moderate, but Continue in July
Reference:
The ABI Work-on-the-Boards panel is open to any AIA member who is principal/partner of their firm. Apply to join
the ABI panel by completing a brief background information form on your firm here.
About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics and Market Research Group, is a leading
economic indicator that provides an approximately nine- to 12-month glimpse into the future of nonresidential
construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Workon-the-Boards” survey that is sent to a panel of AIA member–owned firms. Participants are asked whether their
billings increased, decreased, or stayed the same in the month that just ended, as compared to the prior month,
and the results are then compiled into the ABI. These monthly results are also seasonally adjusted to allow for
comparison to prior months. The monthly ABI index scores are centered near 50, with scores above 50 indicating
an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are
formulated using a three-month moving average. More information on the ABI and the analysis of its relationship
to construction activity can be found in the white paper “Architecture Billings as a Leading Indicator of
Construction: Analysis of the Relationship between a Billings Index and Construction Spending” on AIA.org.
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