Headed by the continued strength in the multifamily residential market and the emerging growth for institutional projects, demand for design services continues to be healthy, as exhibited in the latest Architecture Billings Index (ABI).
As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the October ABI score was 53.7, down from a mark of 55.2 in September. This score reflects an increase in design activity (any score above 50 indicates an increase in billings). The new projects inquiry index was 62.7, following a mark of 64.8 the previous month.
The AIA has added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contracts in October was 56.4.
“Though it has been slow in emerging, we’re finally seeing some momentum develop in design activity for nonprofits and municipal governments, and as such we’re seeing a new round of activity in the institutional sector,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “It will be interesting to see if and how the results of the mid-term Congressional and gubernatorial elections impact this developing momentum.”
Key October ABI highlights:
• Regional averages: South (58.4), West (56.1), Midwest (54.4), Northeast (47.0)
• Sector index breakdown: mixed practice (56.9), multi-family residential (54.7), institutional (54.4), commercial / industrial (52.3)
• Project inquiries index: 62.7
• Design contracts index: 56.4
The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.
About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI.
These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the recently released White Paper, Designing the Construction Future: Reviewing the Performance and Extending the Applications of the AIA’s Architecture Billings Index on the AIA website.
Related Stories
Healthcare Facilities | May 6, 2024
Hospital construction costs for 2024
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.
Biophilic Design | May 6, 2024
The benefits of biophilic design in the built environment
Biophilic design in the built environment supports the health and wellbeing of individuals, as they spend most of their time indoors.
MFPRO+ Special Reports | May 6, 2024
Top 10 trends in affordable housing
Among affordable housing developers today, there’s one commonality tying projects together: uncertainty. AEC firms share their latest insights and philosophies on the future of affordable housing in BD+C's 2023 Multifamily Annual Report.
Retail Centers | May 3, 2024
Outside Las Vegas, two unused office buildings will be turned into an open-air retail development
In Henderson, Nev., a city roughly 15 miles southeast of Las Vegas, 100,000 sf of unused office space will be turned into an open-air retail development called The Cliff. The $30 million adaptive reuse development will convert the site’s two office buildings into a destination for retail stores, chef-driven restaurants, and community entertainment.
Codes and Standards | May 3, 2024
New York City considering bill to prevent building collapses
The New York City Council is considering a proposed law with the goal of preventing building collapses. The Billingsley Structural Integrity Act is a response to the collapse of 1915 Billingsley Terrace in the Bronx last December.
Architects | May 2, 2024
Emerging considerations in inclusive design
Design elements that consider a diverse population of users make lives better. When it comes to wayfinding, some factors will remain consistent—including accessibility and legibility.
K-12 Schools | Apr 30, 2024
Fully electric Oregon elementary school aims for resilience with microgrid design
The River Grove Elementary School in Oregon was designed for net-zero carbon and resiliency to seismic events, storms, and wildfire. The roughly 82,000-sf school in a Portland suburb will feature a microgrid—a small-scale power grid that operates independently from the area’s electric grid.
AEC Tech | Apr 30, 2024
Lack of organizational readiness is biggest hurdle to artificial intelligence adoption
Managers of companies in the industrial sector, including construction, have bought the hype of artificial intelligence (AI) as a transformative technology, but their organizations are not ready to realize its promise, according to research from IFS, a global cloud enterprise software company. An IFS survey of 1,700 senior decision-makers found that 84% of executives anticipate massive organizational benefits from AI.
Codes and Standards | Apr 30, 2024
Updated document details methods of testing fenestration for exterior walls
The Fenestration and Glazing Industry Alliance (FGIA) updated a document serving a recommended practice for determining test methodology for laboratory and field testing of exterior wall systems. The document pertains to products covered by an AAMA standard such as curtain walls, storefronts, window walls, and sloped glazing. AAMA 501-24, Methods of Test for Exterior Walls was last updated in 2015.
MFPRO+ News | Apr 29, 2024
World’s largest 3D printer could create entire neighborhoods
The University of Maine recently unveiled the world’s largest 3D printer said to be able to create entire neighborhoods. The machine is four times larger than a preceding model that was first tested in 2019. The older model was used to create a 600 sf single-family home made of recyclable wood fiber and bio-resin materials.
