Architecture Firm Activity Up Rebounds From Dismal Second Quarter

The latest Architectural Billings Index is finally reflecting a change for the better, exceeding the benchmark of 50 for positive activity as new projects rebounded from a dismal …

The latest Architectural Billings Index is finally reflecting a change for the better, exceeding the benchmark of 50 for positive activity as new projects rebounded from a dismal 2nd quarter. The latest index signals slow but sustainable progress, led regionally by the Northeast, while commercial/industrial real estate proved strongest by sector. See the following article from HousingWire for more on this.

The Architectural Billings Index indicated a growth in design activity in September for the first time since January 2008. The index reached 50.4, according to the American Institute of Architects which released its data Wednesday. The index was 48.2 in August and has increased for four consecutive months.

The AIA sets a benchmark value of 50 for its indexes: anything above that number is considered to be positive and anything below negative.

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The ABI’s monthly data is derived from questionnaires distributed to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.

Despite a 33% drop in new projects over the second quarter of 2010, September’s new project inquiry index rose sharply to 62.3 from 54.6 in August. This is the highest the mark the projects inquiry index has attained since July 2007.

AIA’s chief economist, Kermit Baker, is cautiously optimistic about the news. He believes that although the score is a positive indication of the market, there needs to be consistent movement over the next few months in order to feel comfortable about the state of the design and construction industry.

“While there has been increasing demand for design services, it is happening at a slow rate and there continue to be other obstacles that are preventing a more accelerated recovery,” Baker said. “Still, the strong upturn in design activity in the commercial and industrial sector certainly suggests that this upturn can be sustained.”

The regional buildings index was highest in the Northeast at 56.7, followed by the Midwest at 51.0, the South at 47.0, and the West at 44.5.

The index was the highest in the commercial/industrial sector (56.3), followed by the institutional sector (47.9), the multi-family residential sector (47.0) and the mixed practice sector (44.2).

This article has been republished from HousingWire. You can also view this article at
HousingWire, a mortgage and real estate news site.

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