AIA’s Architecture Billings Index to be Available

Washington, DC, October 20, 2005 — The American Institute of Architects (AIA) officially introduced the Architecture Billings Index (ABI), which is determined based on the results of a monthly “Work-on-the-Boards” survey of U.S. architecture firms. The survey has been taking place since 1995 and the results have been shared with AIA members and academics, and will now be made widely available in the third week of every month to media covering economic conditions. Accounting for eight percent of Gross Domestic Product, construction activity typically follows billings for architectural services by approximately six months. A white paper titled, “Business Activity at U.S. Architecture Firms as a Leading Indicator for the Construction Industry” will be published in the October 2005 issue of Business Economics, the journal of the National Association of Business Economics, and can be accessed through this link, http://www.aia.org/SiteObjects/files/Bus_Econ_ABI_paper.pdf Billings at architecture firms in September made their largest monthly gain since 1998, generating a score of 60.5 on the ABI (any score a0bove 50 indicates an increase in billings at architecture firms), following a score of 55.9 in August. Recent increases in design activity expect to translate into similar increases in construction activity in early 2006. Inquiries for new design projects scored 62.5, indicating more expected future growth in design activity, however the pace for project inquires in September slowed somewhat compared to July and August levels. Highlights from the September ABI: • Architecture firms in all regions reported improvement in business conditions, with firms in the South reporting the strongest improvement • Increases in selected construction commodities and problems with availability of building materials has caused inflation to become a key concern • Construction outlook for 2006 positive based on favorable economic conditions (low interest rates, moderate overall inflation) “The findings in the Architecture Billings Index should be encouraging for the nonresidential construction industry, and those business sectors affected by it,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “The positive outlook should be tempered, however, because of the effect that rising energy prices, increased costs for building materials, and the possibility of rising interest rates will have on the overall economy in the months to come.”

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