After showing positive momentum during the fourth quarter of 2010, the Architecture Billings Index (ABI) slipped almost four points in January, according to the American Institute of Architects.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending. The AIA reports the January ABI score was 50.0, down from a reading of 53.9 the previous month.
The AIA says this score reflects stable demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.5, down sharply from a mark of 61.6 in December.
“This slowdown is indicative of what is likely to be a very gradual improvement in business conditions at architecture firms for the better part of this year,” says AIA’s chief economist, Kermit Baker, PhD, Hon. AIA. “We’ve been taking a cautiously optimistic approach for the last several months and there is no reason at this point to change that outlook. There are still too many firms that continue to see weak market conditions to expect a dramatic increase in the demand for services in the design and construction industry.”
Key January ABI highlights include:
• Regional averages: Midwest (56.4), South (51.5), Northeast (50.4), West (47.3)
• Sector index breakdown: commercial / industrial (54.6), multi-family residential (53.7), institutional (51.3), mixed practice (48.7)
• Project inquiries index: 56.5