Economy Watch: Architects Still Busy, Bodes Well for CRE
- Jul 21, 2016
The American Institute of Architects’ Architecture Billings Index was positive in June for the fifth consecutive month, buoyed by elevated levels of demand across all project types, according to the organization on Wednesday. The June index came in at 52.6, down from 53.1 in the previous month.
Also, the new projects inquiry index was 58.6, down from a reading of 60.1 the previous month. Both indexes are leading economic indicators of construction activity, reflecting the roughly nine- to 12-month lead time between architecture billings and construction spending. An uptick in architectural work predicts one in construction (in early 2017, in this case).
Overall, the score reflect an increase in design services, since any score above 50 indicates an increase in billings. The indexes are derived from a monthly “Work-on-the-Boards” survey 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, as compared to the previous month, and the results are then compiled.
“Demand for residential projects has surged this year, greatly exceeding the pace set in 2015,” said AIA chief economist Kermit Baker. “While we expect to see momentum continue for the overall design and construction industry in the months ahead, the fact that the value of design contracts dipped into negative territory in June for the first time in more than two years is something of a concern.”