Architecture Billings Index continues to trend downward
On the heels of a sizeable decrease in April, the Architecture Billings Index slowed even further in May, according to a June 22 release from the American Institute of Architects. 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. AIA officials reported the May ABI score was 47.2, a slight decrease from a reading of 47.6 the previous month. This score reflects a continued decrease in demand for design services (any score above 50 indicates an increase in billings).
"Whatever positive momentum that there had been seen in late 2010 and earlier this year has disappeared," said AIA Chief Economist, Kermit Baker, in the release. "The broader economy looks to be entering another soft spot, and certainly state budget constraints are adversely affecting the profession's ability to work on institutional projects. But there is no denying that the prolonged credit freeze from lenders for financing commercial projects is the number one challenge to a recovery for the design and construction industry."