Architecture Billings Index Reaches Near Record Level

Up slightly from the 59.3 mark in June, the Architecture Billings Index (ABI) in July reached the second highest mark since the survey's inception in 1995. The ABI shows an approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the July ABI rating was 60.0 (any score above 50 indicates an increase in billings), and inquiries for new projects was 66.2.

"The good news for the construction industry based around high levels of demand for architectural services is tempered somewhat by nervousness in the lending market based around the collapse of the subprime mortgage sector," says AIA chief economist Kermit Baker, Ph.D., Hon. AIA. "While the credit markets for nonresidential projects will most likely return to normal, there is a sense that some construction projects may be delayed until financing anxiety is settled. We will be monitoring this situation closely over the next couple of months."

Key July ABI highlights include:

• The regional average for Northeast - 68.5, West - 60.7, Midwest - 55.9 and South - 57.2;
• The sector index breakdown for commercial/industrial - 65.2, institutional - 61.0, mixed practice - 58.0 and residential - 55.5; and
• The billings inquiries index was 66.2.