ABI Jumps in December

The Architectural Billing Index (ABI) jumped nearly two points in the latest report from the American Institute of Architects. The ABI rose from 52.0 in November to 54.2 in December (any score of 50 or greater represents an increase in billings). The November rating was the previous highest score since 2007.

The ABI is a leading economic indicator of construction activity, reflecting a general nine to twelve month lag between architectural billings and construction spending.

December Regional Averages:

• Northeast: 55.3
• South: 54.8
• Midwest: 52.9
• West: 48.4

Activity Continues to Trend Up...Slightly

The Architectural Billing Index rose nearly two points in July, ending a two month slide. The ABI is a leading economic indicator, generally reflecting a nine to twelve month lag between architecture billings and construction activity. The July ABI score was 47.9, up from 46.0 the previous month.

The West continued to trail the rest of the nation, coming in at 45.2, with the Midwest at 46.7, the Northeast at 47.2 and the South at 47.9. The New Projects Inquiry Index dropped from 57.7 to 53.1, indicating that slower times are again on the horizon.

Locally the discussion has centered around the quantity of RFPs that are currently on the street. Everyone I speak with on the dealer side and/or A&D side are busy answering RFPs. Whether or not those RFPs actually move forward once they are awarded is a completely separate question.

Where Have I Been?: Yes my blogging has been a bit sporadic lately, but summer is over, and it is back to the grindstone!

ABI ticks down

The Architectural Billing Index (ABI) ticked down three points after nearly three straight months of improvement. The American Institute of Architects (AIA) reported the May ABI at 45.8, down three points from the 48.4 reading from April. The ABI is a recognized leading economic indicator of construction activity.

The change in direction is a surprise, as it appeared that conditions were consistently improving. AIA Chief Economist Kermit Baker provided some insight, "The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects that apparently would be successful in this economic environment.”

The regional averages showed continued weakness in the South and West (anything over 50 is expanding, anything below 50 is contracting):

• Northeast (50.6)
• Midwest (48.5)
• South (45.9)
• West (42.9)

On the micro-economic level, we have seen a pretty sharp increase in activity at all client sizes, over the past 4 weeks. A local commercial broker I spoke with today indicated he thought the increase could  be due to the falling rents finally enticing tenants to venture into the market.

ABI Continues to Climb

The Architectural Billings Index (ABI) has risen for the third month in a row, increasing to 48.4 from 46.1 (any score above 50 indicates an increase in billings). The ABI is a leading indicator of construction activity, reflecting an approximate 9 to 12 month lag time between architecture billings and construction spending.

By geographic region, the scoring averages were:

• Northeast (51.0)
• Midwest (49.2)
• South (46.5)
• West (44.7)

Lunch yesterday with a prominent SF based commercial builder, who confirmed that they are extremely busy responding to mulitple RFP's.

The challenge that he (and all of us in the commercial interiors industry), face right now, is that tenants have multiple options to look at regarding space - and they therefore want to see budgets and renderings for all of those options. Instead of creating budgets and plans for one or two options, we (the collective we) are being asked to create budgets and plans for three or four different options (all at no fee of course, and with no guarantee that we will get the job..)

Whining session over - it sure beats the alternative!

Architecture Billings Index (ABI) -- Not so ugly...

The headlines say it all "ABI Sees Highest Reading Since March 2008"... The American Institute of Architects (AIA), reported that the ABI was up more than two points in February to 44.8, and more than a point in March, coming in at 46.1. Although any score less than 50 indicates a decrease in billings, March 2010 is the highest score recorded since March of 2008. In even brighter news, the New Projects inquiry index was 58.5.

“This is certainly an encouraging sign that we could be moving closer to a recovery phase, even though we continue to hear about mixed conditions across the country,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. Mixed is a fair assessment when looking at the scores on a regional basis:

• Midwest - 50.5
• Northeast - 47.0
• West - 46.0
• South - 44.4

All else being equal, this news is still good. What a difference a couple of months can make... Reference the 3/1/2010 post: Architectural Billing Index (ABI) is ugly... which highlighted the fact that the ABI for December and January was in the tank.

The ABI is a leading economic indicator of construction activity, and reflects the approximate nine to twelve month lag time between architecture billings and construction spending.

Architectural Billing Index (ABI) is ugly...

Anytime the "lead" in a press release contains: "Beginning its third year of negative conditions..." you know the rest of the information isn't going to be pretty. And true to form, the latest information from the American Institute of Architects (AIA), is pretty ugly.

The Architectural Billing Index (ABI) dropped nearly three points in January to 42.1, from a December reading of 45.4. This rating shows continued decline in demand for design services (any rating below 50 equals contraction, above 50 equals expansion). The ABI is a leading economic indicator, with architectural billings generally preceding construction spending by nine to twelve months.

“Projects are being delayed or cancelled because lending institutions are placing unusually stringent equity requirements on new developments. This is even happening to financially sound companies with strong credit ratings,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA.

Regional averages showed the Midwest at 48.0, the Northeast at 45.7, the South at 41.32 and the West at 40.5. One bright spot was that the Project Inquiries Index registered a 52.5 reading, indicating a possible light at the end of the tunnel. On the local level, the SF Bay Area firms I've been speaking with confirm they are beginning to see more RFP's, and more serious project inquiries.