Economy Watch: Architects Even Busier in May

The American Institute of Architects' Architecture Billings Index rose to 52.8, an uptick compared to April, which bodes well for construction spending in the upcoming year.
Architecture Billings Index reached 52.8 in May

The American Institute of Architects reported that its Architecture Billings Index score for May was 52.8, which reflects a healthy business environment for architects and—somewhat later—developers. The score even represents an uptick compared to April, when the index stood at 52.0. That means that architects are still busy.

The index is a leading economic indicator of commercial and residential construction activity, since there are typically nine to 12 months between architecture billings and construction spending. Thus, when the index points to growth in architectural billings, it also forecasts U.S. construction spending growth, though not always in each property sector.

The AIA asks its members whether billings increased, decreased or stayed the same for the month compared to the previous month to calculate the index. If the index comes in above 50, that points to an increase in billings, while results below 50 mean a decline.

Separately this week, the Census Bureau reported that U.S. apartment construction is still robust. In May, compared with an year earlier, multifamily construction starts were up 27.4 percent. Compared with the previous month, they were up 11.3 percent, though month-over-month apartment starts tend to be fairly volatile.