Economy Watch: AIA Predicts More Construction Starts in 2018

The Architecture Billings Index has posted three consecutive months of design revenue growth, according to the AIA, which bodes well for construction spending growth next year.

By Dees Stribling, Contributing Editor

Source: AIA Architecture Billings Index (ABI), April 2017

Source: AIA Architecture Billings Index (ABI), April 2017

After beginning 2017 with a marginal decline, the Architecture Billings Index posted three consecutive months of growth in design revenue at architecture firms, including April, according to the American Institute of Architects, which published the index on Thursday. In April the index came in at 50.9, down from 54.3 in the previous month, but even so representing an increase in design services.

The new projects inquiry index was 60.2, up from a reading of 59.8 the previous month, while the new design contracts index increased from 52.3 to 53.2.

As a leading economic indicator of construction activity, the index reflects the nine- to 12-month lead time between architecture billings and construction spending. Since the end of the recession, the index has generally predicted U.S. construction spending growth, though not consistently throughout the real estate industry, such as for retail projects.

Survey participants are asked whether their billings increased, decreased or stayed the same in the month that just ended as compared to the month before. The results are then tabulated by the AIA. The index centers around 50, with scores above 50 pointing to an increase in billings, while scores below 50 indicate a decline.

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