AIA: Architecture "Design activity strongly increases" in April - InvestingChannel

AIA: Architecture “Design activity strongly increases” in April

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

From the AIA: Design activity strongly increases

Continuing its meteoric rebound, the Architecture Billings Index (ABI) recorded its third consecutive month of positive billings, according to a new report today from The American Institute of Architects (AIA).

AIA’s ABI score for April rose to 57.9 compared to 55.6 in March (any score above 50 indicates an increase in billings). Neither score has been achieved since before the Great Recession. During April, new project inquiries and new design contracts reached record highs with scores of 70.8 and 61.7 respectively.

“This recent acceleration in the demand for design services demonstrates that both consumers and businesses are feeling much more confident about the economic outlook,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “The pent-up demand for new and retrofitted facilities is keeping architecture firms in all regions and building sectors busy.”

• Regional averages: Midwest (60.6); South (58.3); Northeast (55.0); West (52.4)

• Sector index breakdown: commercial/industrial (59.1); multi-family residential (56.9); institutional (56.7); mixed practice (55.0)
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 57.9 in April, up from 55.6 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.

This index had been below 50 for eleven consecutive months, but has been solidly positive for the last three months.  

The eleven months of decline represented a significant decrease in design services, and suggests a decline in CRE investment through most of 2021 (This usually leads CRE investment by 9 to 12 months), however we might see a pickup in CRE investment towards the end of the 2021.

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