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ABI Shows No Significant Improvement in Business Conditions

Jul 14, 2009 2:31 PM

There has been a recent moderation in the downturn in design services billings, but the Architecture Billings Index (ABI) reveals that an economic recovery has stalled. 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 American Institute of Architects (AIA), Washington, D.C., reported the May ABI rating was 42.9, nearly identical to the 42.8 mark in April. This score still indicates an overall decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 55.2, the third straight month with a score in the mid-50s.

"The design and construction marketplace is extremely competitive right now," says AIA Chief Economist Kermit Baker, PhD, Hon. AIA. "Prospective clients are casting a wider net, causing numerous firms to bid for the same project, which is why the high level of inquiries is not necessarily translating into additional billings for project work at many firms."

Key May ABI highlights:

• Regional averages: Northeast (48.3), Midwest (41.5), South (41.3), West (39.4)
• Sector index breakdown: multi-family residential (45.5), mixed practice (44.5), commercial/industrial (43.1), institutional (38.0)
• Project inquiries index: 55.2

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