After Inching Upward, Architectural Billings Index Plunges
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After several months of gains, the Architectural Billings Index dropped to 37.7 in June, down nearly five points from May’s 42.9. Most regional scores dipped several points, with the Midwest scoring the lowest (36.2). Building sector scores also dropped, with the institutional segment continuing to hover in the 30s.
On a brighter note, the June inquiries score was 53.8—the fourth straight month it has climbed above 50. (A score above 50 denotes an increase in activity; below 50, a decrease.)
The numbers were released Wednesday by the American Institute of Architects, which produces the survey based on surveys sent to firms. The index, a leading economic indicator, reflects a 9- to 12-month lag time between architectural billings and construction spending.
“It appears as though we may have not yet reached the bottom of this construction downturn,” says Kermit Baker, the AIA’s chief economist. Firms aren’t sure when the market will bounce back, he says, and “there also has been little movement in terms of stimulus funding allocated for design projects having the desired impact of leading to new work.”
Most of the regional scores decreased several points:
- The Northeast dipped to 42.8, down from 48.3 in May.
- The South slipped to 40.5, down from 41.3 in May.
- The West rose slightly to 39.9, up from 39.4 in May.
- The Midwest sunk to 36.2, down from 41.5 in May.
The building sector scores also fell:
- Multi-family residential was 42.7, down from 45.5.
- Commercial/industrial was 39.5, down from 43.1.
- Institutional dipped to 37, down from 38.
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Despite the plunge, scores are still considerably higher than earlier this year. In January, the national billings score sunk to 33.3, an all-time low; regional and building sector scores also hovered in the low- to mid-30s.
Still, the national billings score has fallen below 50 for 17 straight months. The last time it showed gains was in January 2008, when it landed at 50.2.
Read more economic news in our Recession and Recovery special section.
Update: The above sector scores for June were preliminary. Revised scores were released in August. They are as follows: South, 42.4; West, 39.7; Northeast, 41.7; Midwest, 38.3; multifamily residential, 42.1; commercial/industrial, 43.6; and institutional, 37.0.
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