The American Institute of Architects (AIA) recently released the Architectural Billings Index (ABI) rating for January 2009, which reached a new historic low of 33.3, down from the recalibrated rating of 34.1 in December 2008 (originally rated at 36.4). The ABI is a leading economic indicator of construction activity, reflecting the approximate nine- to 12-month lag time between architecture billings and construction spending. Firms of varying sizes in all regions make up the ABI's survey panel.
According to AIA's chief economist, Kermit Baker, PhD., Hon. AIA, the recently enacted stimulus bill's provisions for funding of construction projects may help improve business conditions in the design and construction industries. However, he indicates, it is still unclear whether banks will begin extending credit again, making it difficult to predict when projects that have been on hold will start up again.
Inquiries for new projects increased from December to January, with a new score of 43.5, up from 38.5. Though this increase may be seen as a positive sign, it's a soft number and is most likely due to the industry's anticipation of the stimulus bill, according to Baker. "I have a feeling we still haven't seen the bottom," he says.
January's ABI showed that the mixed-practices sector has experienced a less severe drop in ratings than other sectors, although it still has fallen in past months. Mixed practices rated 39.6, followed by the institutional sector at 37.1, commercial/industrial at 33.8, and multifamily residential at 29.5. Mixed practices may be doing so well comparatively because they are able to rely on a greater diversity of work, giving them an advantage in a difficult economy, says Baker. "Some firms have also benefited by having work overseas," he adds.