Sunday, July 25, 2010

AIA ABI Index for June 2010 - Very slight increase from May, but still under 50!

I still don't see the June ABI Index report on the AIA's web-site, but, after Googling a bit, I found an article on the Denver Business Journal's web-site that spoke about the June 2010 AIA ABI Index ......

From the Denver Business Journal:
Demand for architectural design services nationwide continued to decline in June — with the western states, including Colorado, reporting the lowest demand by region — according to an American Institute of Architects report Wednesday.

Nationwide, the AIA’s Architectural Billing Index, or ABI, was 46 last month, up slightly from 45.8 in May and an increase from 37.7 in June of ’09.

In the West, the ABI inched up to 43.6 last month from 42.9 in May, and rose from 39.9 for the prior-year June. The ABI is a leading economic indicator of construction activity, showing the nine- to 12-month lag between when architecture firms bill clients and when money is spent on a construction project. A score above 50 represents an increase in billings.

The ABI blames drops in commercial real estate values for the lack of new construction. “The steep decline in nonresidential property values has slowed investment in new facilities,” AIA Chief Economist Kermit Baker said in a statement. “Conditions at architecture firms remain very soft, but we’re optimistic that they will improve before the end of the year.”

While less commercial construction is tough on the architectural and construction industries, it can be good for the absorption of vacant space in existing industrial, office and retail buildings, according to real estate brokers. It also keeps rental rates relatively strong.

For June, the northeastern part of the country had the highest ABI by region at 47.7, up from 42.8 for the same month last year but down from 50.6 in May. The South’s score last month was 46.7, up from 40.5 year over year and up from 45.9 the previous month. The Midwest’s June ABI was 46.3, up from 36.2 year over year but down from 48.5 in May.

The ABI is calculated from monthly surveys sent to AIA members, asking whether their billings increased, decreased or stayed the same from one month to the next. The score is created based on the proportion of respondents choosing each option.

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Joel's comment:

Just to repeat, Kermit Baker (of the AIA) said, “Conditions at architecture firms remain very soft, but we’re optimistic that they will improve before the end of the year.”

Kermit Baker is an optimist! But, remember, there's "power in positive thinking"! Let's HOPE that Kermit is right!

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