The strong demand for design services continued into August, according to the latest Architecture Billings Index (ABI) released by the AIA today. In July, the ABI reached its highest mark since 2007. Following that peak, August scores overall didn’t look quite as good, but still reflect a second month of sustained growth.
The August ABI score was 53.0—down from July’s 55.8. Although deflated by nearly three points, this marks the fourth consecutive month of growth. Scores above 50 indicate an increase in billings, whereas a score below 50 reflects contractions.
The new project inquiries category decreased 3.4 points from July’s mark of 66.0 to August’s 62.6. Values in this category have consistently remained above 50 since February 2009.
AIA’s newest metric follows trends in new design contracts, which can signal the future direction of architecture billings. August’s mark was 56.9—the highest ever in the category, which the AIA began tracking in November 2010.
The institutional sector also had a particularly strong month—its score of 54.0 was the highest value achieved in that category since 2007.
“One of the key triggers for accelerating growth at architecture firms is that long-stalled construction projects are starting to come back to life in many areas across the country,” said AIA chief economist Kermit Baker, Hon. AIA, in a press release. “Long awaited access to credit from lending institutions and an increasing comfort level in the overall economy has helped revitalize the commercial real estate sector in recent months. Additionally, though, a crucial component to a broader industry-wide recovery is the emerging demand for new projects such as education facilities, government buildings and, in some cases, hospitals.”
Here are the national and sector breakdowns for the July ABI report.
National Highlights
National Billings: At 53.0, August score is nearly three points below July’s, but is still the fourth consecutive month above the 50-line mark.
Project inquiries: Down 3.4 points from July’s score, August’s 62.6 is still looking good in a category that has experienced consistent monthly growth since February 2009.
Design Contracts: Up two points since July, the August value of the design contract (56.9) is the highest ever in the category.
Regional Highlights
Northeast: August’s score jumped 2.7 points from July to August, achieving the highest value in the region since December 2007.
Midwest: For the second consecutive month, the Midwest’s score has deflated. August’s value of 51.0 is down 2.2 points from July.
South: August’s score of 55.1 is up almost one point from July. The South is the only region to boast over two whole years of consistent monthly growth.
West: August’s score of 52.5 hardly changed from July’s 52.4. This is the region’s third consecutive month on the positive side of the chart.
Sector Highlights
Multifamily Residential: August’s score of 58.1 took a turn upward from July’s 56.4. This category has seen scores above 50 for nearly three years.
Commercial/Industrial: The value in this sector decreased slightly from July’s 50.7 to August’s 50.4 and marks eight consecutive months of growth.
Institutional: This category rose from July’s 53.6 to August’s 54.0. This is the third month of growth following nine months of contractions.
Mixed Practice: At 57.1, this sector deflated slightly from July’s 57.7, returning back to the June score.
Charts: Maggie Goldstone; Source: AIA Architecture Billings Index
