Despite having its highest score since January, the Architecture Billings Index (ABI) continues to point to difficult conditions for the nonresidential construction market. There have been six consecutive months with negative scores, indicating that business levels at U.S architecture firms continue to worsen.
As a leading economic indicator of construction activity, the ABI shows an approximate 9- to 12-month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the July ABI rating was 46.8, up slightly from the 46.1 mark in June (any score above 50 indicates an increase in billings). The inquiries for new projects score was 54.6.
“Financing for new projects continues to be a problem,” says AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Many projects are being reconsidered due to construction cost increases. And while there are a good number of projects still in the queue, owners are taking longer to proceed to the next phase of the design process.”
Key July ABI highlights:
· Regional averages: Midwest (50.0), South (47.7), Northeast (46.5), West (42.2)
· Sector index breakdown: institutional (53.6), commercial/industrial (48.8), mixed practice (45.6) multifamily residential (39.2)
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