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Architectural Billings Rebounded in August

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After four consecutive months of declines, demand for architectural design services ascended into positive territory in August, according to the American Institute of Architects (AIA) Architectural Billing Index (ABI).

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AIA reported an August ABI score of 50.2, up from 48.7 in July. Any score above 50 indicates an increase in billings.

The new projects inquiry index was 57.2, up from 56.3 in July.

As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lag time between architectural billings and construction spending.

AIA Chief Economist Kermit Baker says the August figures don't necessary herald a turnaround for the nation's construction industry. “Until the economy is on firmer ground, there aren’t likely to be strong increases in demand for design services,” says Baker. “In the meantime, we can expect to see design activity alternate between modest growth and modest decline.”

The ABI rose five consecutive months before plummeting in April, a reversal reminiscent of last year's strong spring building season and subsequent slide in early summer.

Among market sectors, multi-family residential (53.0) scored highest in August, followed by institutional (50.2) commercial/industrial (47.9) and mixed practice (46.8).

By region, demand was weakest in the Midwest (45.3), marking a sharp decline from earlier in the summer. The South (52.2) led all regions, followed by the West (51.2) and Northeast (45.5).

Construction employment data released late last month by the Arlington, Va.-based Associated General Contractors of America showed similar weakness in the Midwest, particularly in Illinois, Michigan, Missouri and Wisconsin, all of which logged substantial year-over-year job losses in July.

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