| Aug 13, 2014 |
Momentum increases for architecture firms across the country
Boh staff
By Staff

A recent surge in both design contracts and new project inquiries indicates a sustainable strengthening across the construction marketplace, according to American Institute of Architects (AIA) Chief Economist Kermit Baker in response to the strong increase in the AIA Architecture Billing Index.

“With the first positive reading since last summer in billings at institutional firms, it appears that design activity for all major segments of the building industry is growing,” said Baker.

The AIA June Architecture Billings Index score was 53.5, up from a mark of 52.6 in May. This score reflects an increase in design activity (any score above 50 indicates an increase in billings). The new projects inquiry index was 66.4, up noticeably from the reading of 63.2 the previous month and its highest level in a calendar year.

The AIA has also added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contracts in June was 55.7—the highest mark since that indicator started being measured in October 2010.

Key highlights from the June ABI include the following:

• Regional averages: Midwest 56.3, South 53.9, Northeast 51.1, West 48.7

• Sector index breakdown: Multi-family residential 57.7, mixed practice 53.8, commercial/industrial 53.1, institutional 50.2

• Project inquiries index: 66.4

• Design contracts index: 55.7

The regional and sector categories are calculated as a three-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average.

As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead-time between architecture billings and construction spending.

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