AIA Billings Index Still Shows Likely Contraction

Washington, D.C., July 23, 2008 — The Architecture Billings Index, an indicator of future commercial building activity, rebounded almost three points in June, after dropping two points the previous month.

However, this is the fifth straight month that the index has remained below the 50 threshold, indicating that business levels at U.S architecture firms continue to deteriorate.

As a leading economic indicator of construction activity, the ABI shows an approximate nine to 12 month lag time between architecture billings and construction spending.

The American Institute of Architects (AIA) reported the June ABI rating was 46.1, up from the 43.4 mark in May (any score above 50 indicates an increase in billings). The inquiries for new projects score was 51.8.

“Very recently, the Midwest has been showing the best regional conditions,” said AIA Chief Economist Kermit Baker.

“But otherwise, these numbers are a continuation of weak conditions in the nonresidential construction sector. Given that inquiries for new project work have not seen much improvement, it’s likely we are several months away from a turnaround.”

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