Architecture Billings Index Reaches Highest Mark in Over Two Years

Business Conditions Slowly Improving

Washington, D.C. — May 19, 2010 — For the third straight month the Architecture Billings Index (ABI) has gone up. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the April ABI rating was 48.4, up from a reading of 46.1 the previous month. Although this score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings), it is the highest score since January 2008 when revenue at architecture firms headed into recession. The new projects inquiry index was 59.6.

“It appears that the design and construction industry may be nearing an actual recovery phase,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “The economic landscape is improving, although not across the board, but doing so at a gradual pace. It is quite possible that we will finally see positive business conditions in the foreseeable future.”

Key April ABI highlights:

o Regional averages: Northeast (51.0), Midwest (49.2), South (46.5), West (44.7)
o Sector index breakdown: commercial / industrial (48.5), mixed practice (48.4), institutional (46.8), multi-family residential (45.8)
o Project inquiries index: 59.6

About the AIA Architecture Billings Index
The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey's inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. The diffusion indexes contained in the full report are derived from a monthly survey sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month. The regional and sector data is formulated using a three-month moving average