Architecture Billings Up in January

Washington, DC, February 22, 2007--Following the Census Bureau report indicating that January housing starts fell to their lowest level since 1997, the Architecture Billings Index (ABI), a leading economic indicator of construction activity, showed positive conditions across all geographic regions and market sectors in January.

With an approximate nine to twelve month lag time between architecture billings and construction spending, the forecast remains favorable for the nonresidential construction market throughout 2007. The American Institute of Architects (AIA) reported the January ABI rating was 57.9 (any score above 50 indicates an increase in billings), compared to a score of 57.6 in December.

“You have to go back twenty-six months for the last negative score for the index,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “While the index was positive in 2006, it hovered around the break even mark for much of the year. So far the last three months have seen much higher levels of demand for design services and is likely to translate into sustained levels of high activity in the construction industry.”

Key January ABI highlights:

• Regional averages: Northeast (76.0), South (55.6), Midwest (54.4), West (53.0)

• Sector index breakdown: mixed (59.6), institutional (58.8), commercial / industrial (57.2) residential (52.1)

• Inquiries index: 66.8

Peter Lisnic, vice president, senior research analyst at Robert W. Baird & Co. added, “Continuing the momentum established in the fourth quarter of 2006, January's ABI clearly supports the outlook for healthy growth in nonresidential construction markets in 2007. The strength of the ABI readings could even portend market growth above current consensus expectations, which may bolster investor appetite for stocks with nonresidential exposure. One question from January's readings might be whether demand in the residential sector has indeed reached an inflection point.”

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