Economy Watch: Architectural Billings Eke Out Gain in February

Architecture billings inched back up in February after dipping into negative territory for the first time in five months in January.

The American Institute of Architect’s Architecture Billings Index (ABI), which dipped into negative territory for the first time in five months in January, inched back up in February with a small increase in demand for design services. According to the organization, the index came in at 50.3 in February, up from 49.6 a month earlier. Both scores are near the threshold of 50, however. Below 50 indicates more architects reported a decrease in billings than an increase.

Demand for multifamily design services still leads the pack. The ABI breakdown by property type was as follows: multifamily residential (53.0), commercial/industrial (52.3), institutional (48.1) and mixed practice (47.7). Somewhat healthier was the AIA’s new projects inquiry index, which came in at 59.5, up from a reading of 55.3 the previous month.

The ABI is a leading indicator of commercial and residential property construction, reflecting a nine- to 12-month lead time between architecture billings and construction spending. The index is derived from a monthly “Work-on-the-Boards” survey that’s 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, compared to the month before.

“March and April are traditionally the busiest months for architecture firms, so we should get a clearer reading of underlying momentum over the next couple of months,” AIA chief economist, Kermit Baker noted. “Hopefully the relatively mild weather conditions recently in most parts of the country will help design and construction activity move ahead at a somewhat faster pace.”