“Billings at architecture firms across the country continue to increase. As a leading economic indicator of construction activity, the Architecture Billings Index (ABI) reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the November ABI score was 53.2, up from the mark of 52.8 in October (see red line above). This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.6, up slightly from the 59.4 mark of the previous month (blue line in chart).”
“These are the strongest business conditions we have seen since the end of 2007 before the construction market collapse,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The real question now is if the federal budget situation gets cleared up which will likely lead to the green lighting of numerous projects currently on hold. If we do end up going off the „fiscal cliff‟ then we can expect a significant setback for the entire design and construction industry.”
MP: The 53.2 reading for the Billings Index in November was the highest level since November 2007, five years ago, and continues the upward trend in billing activity for architectural services that started four years ago. As a leading indicator of future construction activity, we can expect this year’s gains in construction and building activity to continue into next year.
Related from Forbes:
Construction employment in the U.S. is poised to rebound as a swelling pipeline of projects prompts companies to expand. Builders in October had the most job openings and broke ground on more homes than at any time in four years, government data show. Billing by architecture firms, which typically leads construction by at least nine months, is climbing at the fastest pace since December 2010.
“You have a lot of projects right now in design and development, and as soon as the financing hits and the approvals are out, then the shovels go in the ground,” said Suzanne Breistol, co-owner of ConstructionConnection.com, a Marble Falls, Texas-based employment consulting service.