Architecture billings were up more than eight points in March after a string of historic lows, suggesting that the market for construction and design work could finally be experiencing a spring thaw after a brutal winter.
Last month, the Architecture Billing Index (ABI), a benchmarking tool compiled by the American Institute of Architects, posted a score of 43.7, up from 35.3 in February. This was the first time since September 2008 that the index edged above 40, although any score under 50 still indicates an overall downturn in demand for design services.
An economic indicator of construction activity in the pipeline, the ABI reflects a lag time of approximately nine to 12 months between architecture billings and construction spending. Single-family housing activity is not included in the study, but multifamily is.
One notable bright spot is that new project inquiries tipped the scale with a positive score of 56.6 in March, up significantly from 37.7 in December of 2008. While this number reflects only bids and not signed contracts, it's a sign of hope that momentum may be building for an uptick in construction activity.
“This news should be viewed with cautious optimism,” said AIA chief economist Kermit Baker. “The fact that inquiries for new projects increased in encouraging, but it will likely be a few months before we see an improvement in overall billings. Architects continue to report a diversity of business conditions, but the majority is still seeing weak activity levels.”
Breakout scores for specific sectors were mixed, confirming that the overall market remains in flux. Mixed architectural practices reported a score of 44.0 (down slightly from 45.1 in December), while institutional billings inched up to 42.9, from a previous score of 39.3. Significant gains were reported in commercial/industrial billings, which clocked in at 35.0, up from 28.1. Most dramatically, the multifamily residential score rose to 39.4, up from 30.0 in December.
Jenny Sullivan is senior editor, design for BUILDER.