Architecture Billings Index Experiences Sharp Decrease in May

June 21, 2012

The Architecture Billings Index (ABI) score, released by the American Institute of Architects (AIA), fell to 45.8 in May, following a 48.4 figure in April. The ABI reflects the approximate nine- to twelve-month lag time between architecture billings and construction spending.

According to the AIA the score reflects a sharp decrease in demand for design services. Last month's score followed the first negative reading in five months.

The new projects inquiry index was 54.0, down slightly from mark of 54.4 the previous month. Additionally, the AIA reports that all regions have shown a declining demand for design services.

"For the second year in a row, we're seeing declines in springtime design activity after a healthy first quarter. Given the ongoing uncertainly in the economic outlook, particularly the weak job growth numbers in recent months, this should be an alarm bell going off for the design and construction industry," says AIA chief economist Kermit Baker. "The commercial/industrial sector is the only one recording gains in design activity at present, and even this sector has slowed significantly. Construction forecasters will have to reassess what conditions will look like moving forward."

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