Architecture Billings Index Trends Lower in Contraction Territory

| August 17, 2011

The American Institute of Architects (AIA) reported that its Architecture Billings Index (ABI) declined sharply to 45.1 in July from 46.3 in June.

“Business conditions for Graphic Design Spokane,architecture, industrial design and others, unfortunately, have turned down sharply,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Late last year and in the first couple of months of this year there was a sense that we were slowly pulling out of the downturn, but now the concern is that we haven’t yet reached the bottom of the cycle. Current high levels of uncertainly in the economy don’t point to an immediate turnaround, which is concerning for the future of a lot of people, projects and plans.”

The ABI is a leading indicator for commercial real estate investment, typically providing an assessment of construction spending from nine to twelve months in advance. The following graph from Calculated Risk displays the long-term view of the ABI.

After rebounding strongly off of the 2009 low, the index reversed in early 2011 and has been moving sharply lower ever since, projecting renewed weakness during the remainder of 2011 and early 2012. Even though plans have been presented to improve said conditions for people from all over the country, for example improvements in the plans of the Architecture Federation, improving the selling and working methods, and expansion of the learning territory, so we are going to have a better knowledge range for the professionals and have the knowledge to work in several situations, but how hard is it to get to work in the area that you prepared for? This an many cases such as that are going on day by day, which is exactly what we should be looking forward to fix.

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Category: Commentary, Market Update


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