AIA ABI Index for August 2010 - Another slight increase from previous month, but still showing declining demand

Although I've yet to see it posted on the AIA's own web-site, I did, this morning, find two different sites on the Internet where people are talking about the AIA ABI Index reading for August 2010. Below, you'll see the text of the press release about the August 2010 ABI Index reading, but, first, a couple of comments:

Comment #1 - although some finance and economics people appear to be having "positive thoughts" about the fact that the ABI Index is creeping towards 50 (it's been moving towards 50 for the last three months), note the sentence in the just-issued AIA Press Release that says this, "This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings.)" On the one hand, I guess it's only natural for people to want to have positive thoughts any time a number goes up rather than down. But, on the other hand, if the AIA says (and it has been saying this all along) that ANY reading UNDER 50 is an indication that demand for design services is continuing to decline, then positive thoughts are nothing more than (as Danny DeVito would put it) "delusional."

Comment #2 - if the lag-time between recovery in design services and recovery in construction (and recovery in reprographics generally coincides with recovery in construction, if not somewhat earlier than the recovery in construction) is 9 months or so, then that means that reprographers should begin seeing stronger revenues sometime during the Spring of 2011. I guess that also means that reprographers should be expecting a weak Q4 2010; let's hope it is not too weak. By most accounts, last year's Q4 (2009) was plain-out awful.

Okay, here's the information from the AIA ABI Index Press Release:

The American Institute of Architects (AIA) just released its monthly Architecture Billings Index (ABI) for August, which improved to 48.2 last month compared to 47.9 in July, and was the sixth monthly increase during the last seven months of the leading economic indicator for construction activity. Except for a slightly higher reading of 48.4 in April of this year, the August reading of the ABI was the highest index level since January 2008 (see chart above).

Although the ABI has still not risen about the benchmark level of 50 which signals overall expansion of billings, the leading indicator has been on an upward trend since early 2009 when the ABI hit a recession-low of 33.9, and has now risen by 14.3 points. This upward trend is evidence of a gradual and steady improvement in billings, and a signal of future improvements in construction activity.

Among the various components of the ABI that are above 50 and signal expansion include the Northeast average for billings (50.9), billings for commercial and industrial (50.6), and the Project Inquires Index (54.6).

According to the AIA:

Still not entering into the positive phase, the Architecture Billings Index (ABI) increased for the third straight month in August. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the August ABI score was 48.2, up slightly from a reading of 47.9 the previous month. This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was also up, moving from 53.1 to 54.6.