Wednesday, January 19, 2011

AIA ABI Index for December 2010 - above 50, again, for the 3rd time in the past four months

Before you read the AIA ABI Index Press Release for December 2010 (published on January 19, 2011, and I found that on the web-site - and that's a great blog to follow), I'd like to make some comments about a discussion I had with an Architect, over dinner in Budapest, Hungary on Monday night. I had asked him, "how's business." His response was (a) "we've had more new project inquiries in the past 30 days than we had (in total) during the previous six months, and" (b) "real estate developers we are talking to are indicating that the project financing market is coming back to life." Those comments were made before the most recent AIA ABI Index Press Release was issued.

As to the AIA ABI Index for December 2010, with a 50+ reading for December 2010, this marks the third month out of the past four months that the ABI Index has hit over 50. Historically, a reading of 50 or higher indicates increasing design activity. It "sounds like" we are finally seeing a "positive" trend!

The Repro PPoP Index published on "Reprographics 101" also shows a positive trend.

Here's the most recent AIA ABI Index Press Release:

Washington, D.C. – January 19, 2011 – "On the heels of its highest mark since 2007, the Architecture Billings Index (ABI) jumped more than two points in December. 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 December (2010) ABI score was 54.2, up from a reading of 52.0 the previous month. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 62.6, up slightly from a mark of 61.4 in November." “This is more promising news that the design and construction industry is continuing to move toward a recovery,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. However, historically December is the most unpredictable month from a business standpoint, and therefore the most difficult month from which to interpret a trend. The coming quarter will give us a much better sense of the strength of the apparent upturn in design activity. The New Project Inquiries Index is at the highest level since July 2007 and the Billings Index is the highest level since November 2007, so both indexes are now above their pre-recession levels.

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