Construction Economic Outlook
Unexpected Rebound in Leading Demand Indicator
After 4 consecutive months of decline, the AIA Architecture Billings Index (ABI) hit a 2011 high of 51.4 in August. This marks just the sixth time in over 3 years the index has indicated growth in demand for design services. The Midwest region and mixed-use sector saw the greatest improvement in demand, while the Northeast region and multifamily residential sectors remain the weak spots.
"Based on the poor economic conditions over the last several months, this turnaround in demand for design services is a surprise," said AIA Chief Economist Kermit Baker, Ph.D., Hon. AIA. "Many firms are still struggling, and continue to report that clients are having difficulty getting financing for viable projects, but it's possible we've reached the bottom of the down cycle."
As a leading economic indicator of construction activity, the ABI reflects the approximate 9-to-12-month lag time between architecture billings and construction spending.
News provided by IRMI.