Architecture Billings Index Up in January

Washington, DC, February 17, 2006--The Architecture Billings Index (ABI), a leading economic indicator of nonresidential construction activity, was positive in January for the twelfth consecutive month, and fourteen out of the last fifteen months. Based on the approximately six to nine month lag time between architecture billings and construction spending, business conditions appear favorable for the nonresidential construction market in 2006 and possibly into 2007. The American Institute of Architects (AIA) reported the January ABI rating was 55.5 (any score above 50 indicates an increase), up from the seasonally adjusted score of 53.7 in December 2005. “As the residential market shows signs of softening, the nonresidential market is in excellent position to pick up the slack in construction activity,” said AIA chief economist Kermit Baker. “Nonresidential construction not only represents billions of dollars in economic activity, but also generates a lot of related spending in furnishings and interior decor.” According to Department of Commerce figures on Construction Put in Place, spending on nonresidential construction in 2005 totaled $487 billion accounting for four percent of GDP. The impact on the overall economy is significant considering that the AIA Consensus Construction Forecast Panel has anticipated close to five percent real growth in nonresidential building construction this year, with growth evenly balanced between the commercial / industrial and institutional sectors.

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