AIA: "Architecture Firm Billings Strengthen in April" - InvestingChannel

AIA: “Architecture Firm Billings Strengthen in April”

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: Architecture Firm Billings Strengthen in April

The American Institute of Architects (AIA) is reporting today that architecture firm billings rose for the seventh consecutive month, with the pace of growth in April increasing modestly from March.

Overall, the AIA’s Architecture Billings Index (ABI) score for April was 52.0 (any score over 50 is billings growth), which indicates the business environment continues to be healthy for architecture firms despite continued labor shortages, growing inflation in building materials costs and rising interest rates. The ABI also revealed that business conditions remained strong at firms located in the West, while billings softened slightly at Midwest firms.

“While there was slower growth in April for new project work coming into architecture firms, business conditions have remained healthy for the first four months of the year,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Although growth in regional design activity was concentrated at firms in the sunbelt, there was balanced growth so far this year across all major construction sectors.”

• Regional averages: West (55.1), Midwest (49.6), South (51.8), Northeast (50.3)

• Sector index breakdown: multi-family residential (50.7), institutional (52.0), commercial/industrial (52.7), mixed practice (50.6)
emphasis added

AIA Architecture Billing Index Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 52.0 in April, up from 51.0 in March. Anything above 50 indicates expansion in demand for architects’ services.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

According to the AIA, there is an “approximate nine to twelve month lag time between architecture billings and construction spending” on non-residential construction.  This index was positive in 11 of the last 12 months, suggesting a further increase in CRE investment in 2018.

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