Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Pace of demand for design services rapidly accelerates
Demand for design services in March expanded sharply from February according to a new report today from The American Institute of Architects (AIA).
AIA’s Architecture Billings Index (ABI) score for March was 58.0, up from a score of 51.3 in February. Any score above 50 indicates an increase in billings. During March, scoring for both new project inquiries and design contracts expanded, posting scores of 63.9 and 60.5, respectively.
“The spike in firm billings in March may reflect a desire to beat the continued interest rate hikes expected in the coming months,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “However, since project backlogs at architecture firms have reached seven months, a new all-time high, it appears that firms are having a difficult time keeping up with this uptick in demand for design services.”
• Regional averages: South (57.2); Midwest (56.2); West (54.0); Northeast (46.3)
• Sector index breakdown: mixed practice (58.2); multi-family residential (57.2); commercial/industrial (55.3); institutional (50.5)
This graph shows the Architecture Billings Index since 1996. The index was at 58.0 in March, up from 51.3 in February. Anything above 50 indicates expansion in demand for architects’ services.
Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
This index has been positive for fourteen consecutive months. This index usually leads CRE investment by 9 to 12 months, so this index suggests a pickup in CRE investment in 2022.