U.S. Architecture Billings Index falls in January

Cautious optimism for design industry: January ABI 50.0, down 3.9 pts, new projects index falls 5 pts to 56.5.


A leading indicator of U.S. nonresidential construction activity weakened last month after two months of improving numbers, an architects' trade group said on Wednesday. AIA LogoThe monthly Architecture Billings Index fell almost 4 points in January to 50.0, a level that indicates neither expansion nor contraction of demand for design services, the American Institute of Architects said.

The billings index is considered a predictor of construction spending about nine to 12 months in the future, since buildings are designed long before they are erected. The latest readings suggest an anticipated recovery in U.S. nonresidential construction may not gain traction this year. A separate index of inquiries for new projects fell more than five points to 56.5, according to the AIA.

"This slowdown is indicative of what is likely to be a very gradual improvement in business conditions at architecture firms for the better part of this year," said AIA chief economist Kermit Baker. "We've been taking a cautiously optimistic approach for the last several months and there is no reason at this point to change that outlook."

The AIA's billings index dropped below 50 in January 2008, indicating falling demand, and stayed below that mark until last November. The separate inquiries index only fell below 50 briefly in 2008. It is typically higher than the billings index, as prospective customers solicit bids from multiple architecture firms.

Most diversified industrial companies get at least some revenue from nonresidential construction, selling machinery used for erecting buildings or components such as elevators or electrical and cooling systems.

A partial list of those in the US sector include:

  • Caterpillar Inc (CAT.N)
  • Deere & Co (DE.N)
  • Eaton (ETN.N)
  • Honeywell International Inc (HON.N)
  • Johnson Controls Inc. (JCI.N)
  • Terex Corp (TEX.N)
  • Tyco International Ltd (TYC.N)

As well as several in the European sector:

- Edited by Gust Gianos, Consulting-Specifying Engineer, www.csemag.com

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