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by Bill McBride on 6/19/2013 09:52:00 AM writing
for calculatedriskblog.com
for calculatedriskblog.com
Note: This index is a leading indicator primarily for new Commercial
Real Estate (CRE) investment.
Real Estate (CRE) investment.
Following the first reversal into negative territory in ten months in
April, the Architecture Billings Index has bounced back in May.
April, the Architecture Billings Index has bounced back in May.
As a leading economic indicator of construction activity, the ABI
reflects the approximate nine to twelve month lag time between architecture
billings and construction spending. The American Institute of Architects (AIA)
reported the May ABI score was 52.9, up dramatically from a mark of 48.6 in
April. This score reflects an increase in demand for design services (any
score above 50 indicates an increase in billings). The new projects inquiry
index was 59.1, up slightly from the reading of 58.5 the
previous month.
reflects the approximate nine to twelve month lag time between architecture
billings and construction spending. The American Institute of Architects (AIA)
reported the May ABI score was 52.9, up dramatically from a mark of 48.6 in
April. This score reflects an increase in demand for design services (any
score above 50 indicates an increase in billings). The new projects inquiry
index was 59.1, up slightly from the reading of 58.5 the
previous month.
“This rebound is a good sign for the design and construction industry
and hopefully means that April’s negative dip was a blip rather than a sign of
challenging times to come,” said AIA Chief Economist, Kermit Baker, PhD, Hon.
AIA. “But there is a resounding sense of uncertainty in the marketplace – from
clients to investors and an overall lack of confidence in the general economy –
that is continuing to act as a governor on the business development engine for architecture firms.”
and hopefully means that April’s negative dip was a blip rather than a sign of
challenging times to come,” said AIA Chief Economist, Kermit Baker, PhD, Hon.
AIA. “But there is a resounding sense of uncertainty in the marketplace – from
clients to investors and an overall lack of confidence in the general economy –
that is continuing to act as a governor on the business development engine for architecture firms.”
Anything above 50 indicates expansion in demand for
architects’ services. This index has indicated expansion in 9 of the last
10 months.
architects’ services. This index has indicated expansion in 9 of the last
10 months.
Note: This includes commercial and industrial facilities like hotels and
office buildings, multi-family residential, as well as schools, hospitals and
other institutions.
office buildings, multi-family residential, as well as schools, hospitals and
other institutions.
According to the AIA, there is an “approximate nine to twelve month
lag time between architecture billings and construction spending” on
non-residential construction. The increases in this index over the past
10 months suggest some increase in CRE investment in the second half of 2013.
lag time between architecture billings and construction spending” on
non-residential construction. The increases in this index over the past
10 months suggest some increase in CRE investment in the second half of 2013.
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