Architecture Billings Index Drops

Washington, DC, October 17, 2007--Following a six point decline in August, the Architecture Billings Index (ABI) for September dropped to its lowest level since June 2006.

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 September ABI rating was 51.1, down from the previous mark of 53.9 (any score above 50 indicates an increase in billings), and inquiries for new projects was 61.4.

“While there is plenty of nonresidential construction activity in the pipeline over the coming months, the demand for new projects is tapering off a bit.” said AIA chief economist Kermit Baker. “The fallout from the subprime mortgage meltdown in the residential market has seeped into the nonresidential sector, causing project delays and a tightening market for financing. There is also emerging concern in the industry that this situation will extend into 2008.”

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