Architectural Billings Index Reverses Course

Washington, DC, Sept. 23, 2009--The Architectural Billings Index, a key indicator of future commercial construction activity, fell to its lowest level in four months in August.

The American Institute of Architects said the index fell to 41.7 during the month, which is down from 43.1 in July.

A score above 50 reflects an increase in architectural billings, while below 50 indicates a decline in demand for design services. The index reflects the nine- to 12-month lag time between architectural billings and construction spending, said a news release.

“While there have been occasional signs of optimism over the last few months, the overwhelming majority of architects are reporting that banks are extremely reluctant to provide financing for projects and that new equity requirements and conservative appraisals are making it even more difficult for developers to get loans,” said Kermit Baker, AIA chief economist.

“Until the anxiety within the financial community eases, these conditions are likely to continue.”

The new projects inquiry score on the index was 55.2 in August.

Regionally, index scores remained under 50, with the Northeast scoring 45.2, the South scoring 44.1, the Midwest scoring 43 and the West scoring 37.5.

It’s the same picture for the various sectors of construction: commercial and industrial scored 45.6; multifamily residential scored 43.3; mixed use scored 41.4; and institutional scored 37.5.

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