Washington, D.C. – May 20, 2009

After an eight-point jump in March, the Architecture Billings Index (ABI) fell less than a full point in April. 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 April ABI rating was 42.8, down from the 43.7 mark in March. This was the first time since August and September 2008 that the index was above 40 for consecutive months, but the score still indicates an overall decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 56.8.

“The most encouraging part of this news is that this is the second month with very strong inquiries for new projects. A growing number of architecture firms report potential projects arising from federal stimulus funds,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Still, too many architects are continuing to report difficult conditions to feel confident that the economic landscape for the construction industry will improve very quickly. What these figures mean is that we could be seeing things turn around over a period of several months.”

Key April ABI highlights:

Regional averages: Northeast (47.1), South (45.0), Midwest (40.1), West (39.2)

Sector index breakdown: mixed practice (44.2), institutional (43.2), multi-family residential (43.2), commercial / industrial (41.7)

Project inquiries index: 56.8

The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. The diffusion indexes contained in the full report are derived from a monthly survey sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.

About the AIA Architecture Billings Index

For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. By using sustainable design practices, materials, and techniques, AIA architects are uniquely poised to provide the leadership and guidance needed to provide solutions to address climate change. AIA architects walk the walk on sustainable design. Visit www.aia.org/walkthewalk.

January 2009

According to forcasts by the American Institute of Architects, nonresidential construction spending when adjusted for inflation, is projected to decline by 11 percent in 2009.

Office buildings, hotels, and retail establishments are poised to see the largest declines in spending. Hotels are forcasted to decline (-20.2 percent), retail (-19.2 percent) and office buildings (-17.5 percent) in 2009.

According to AIA Chief Economist, Kermit Baker “As profits for businesses have fallen and the ability to get credit to finance projects has become far more difficult, construction plans have been put on hold or canceled outright in recent months”. He adds that the situation is not expected to turn around anytime soon and is likely to get worse before it gets better.

The decline is expected to slow somewhat in 2010, with retail seeing the most significant recovery (-6.6 percent in 2010 vs. -19.2 percent in 2009). One silver lining in the midst of the negative data, has been a drop in prices for key construction commodities. Adds Baker,“The downturn in nonresidential activity has helped stabilize construction costs. For example, prices for steel, gypsum products, lumber and cement have all come down recently which makes taking on projects more attractive to developers.”

The Institutional sector is also expected to see a drop in construction spending activity in 2009, however at a more modest level. Religious facilities (-9.4 percent) and Educational facilities (-7.4 percent) will be the most affected, while Health Care facilites should see only a modest decline (-3.6 percent). Religious and Amusement / Recreation facilties are expected to see marginally positive growth in 2010 (1.4 percent) and (1.0 percent) respectively, while Education and Health Care should experience a more modest decline in 2010 relative to 2009 (-1.9 percent vs. -7.4 and -3.6 respectively).

The AIA Consensus Construction Forecast Panel, whose purpose is to project business condition in the construction industry over the next 12 to 18 months, is conducted twice a year with research data from McGraw Hill Construction, Global Insight, Moody’s Economy.com, Reed Business Information, and FMI.

August 10, 2008

With the aim of drastically reducing the amount of energy that buildings consume by 2025, the U.S Department of Energy (DOE) has launched a new program called the Zero-Net Energy Commercial Building Initiative (CBI). The program's objective is to make new commercial buildings capable of generating as much energy as they consume available by using advanced energy efficiency technologies and on-site renewable energy generation systems, such as solar power and geothermal energy. In 2005, commercial buildings used 18 percent of energy in the United States, accounting for 18 percent of greenhouse gas emissions.

DOE’s Building Technologies Program aims to support High Performance Green Building activities in the Energy Independence and Security Act of 2007 (EISA 2007) including: technology research and development; provision of technical assistance to encourage widespread technology adoption; development of a means for measurement and verification of energy savings; work with code-setting bodies to ensure technologies are properly deployed; and analysis of incentives for builders, landlords, and tenants to ensure that cost-effective investments are made on a life-cycle basis.

Washington, D.C., July 23, 2008

The Architecture Billings Index (ABI) rebounded almost three points in June, after dropping two points the previous month. However, this is the fifth straight month that the index has remained below the 50 threshold, indicating that business levels at U.S architecture firms continue to deteriorate. As a leading economic indicator of construction activity, the ABI shows an approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the June ABI rating was 46.1, up from the 43.4 mark in May (any score above 50 indicates an increase in billings). The inquiries for new projects score was 51.8.

“Very recently, the Midwest has been showing the best regional conditions,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “But otherwise, these numbers are a continuation of weak conditions in the nonresidential construction sector. Given that inquiries for new project work have not seen much improvement, it’s likely we are several months away from a turnaround.”

Key June ABI highlights:

• Regional averages: Midwest (51.0), South (49.9), Northeast (40.7), West (36.1)
• Sector index breakdown: institutional (51.6), commercial / industrial (45.8), mixed practice (44.1) multi-family residential (37.9)
• Project inquiries index: 51.8


About the AIA Architecture Billings Index

The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. The diffusion indexes contained in the full report are derived from a monthly survey sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.

Washington, D.C., July 16, 2008

As the nonresidential sector has experienced cutbacks in demand for new space, the projections for construction activity for new nonresidential facilities are for a mild decline in 2008, with a more significant downturn in 2009. The forecasts are more negative for commercial and industrial buildings, with an especially large drop-off in the office and retail sectors. The two largest institutional categories, healthcare and education facilities, should see a slight increase this year and could help offset some of the losses in the other project categories. The continued increase in building material costs in recent years could also adversely affect the construction industry. These are highlights from the American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation’s leading construction forecasters which is calling for a 1.2% decline in inflation-adjusted activity in 2008, followed by a projected 6.7% decline in 2009.

“The more pessimistic forecasts this round stems from the lack of growth in the overall economy, the ripple effect from the faltering housing market and the anxiety in the credit markets leading to a restriction in lending for all types of construction projects,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The one bit of good news is that this contraction in activity is likely to be considerably milder than the construction recessions of the early 1990’s and earlier this decade.”

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Market Segment Consensus Growth Forecasts

Commercial / industrial 2008 2009
• Retail -8.3% -9.9%
• Office buildings -3.7% -12.3%
• Hotels 6.6% -9.9%
• Industrial facilities 4.6% -5.5%

Institutional
• Health care facilities 0.2% 1.1%
• Education 2.7% -1.1%
• Amusement / recreation 3.6% -8.5%
• Public safety 5.9% -1.9%
• Religious -11.7% -1.2%


Baker added, “Another key concern for the industry is that the cost of construction materials has increased more than twice that of consumer products and services – up 37% versus 18% since 2004. Petroleum-based materials and other key construction commodities such as steel, concrete and stone have experienced very sharp price increases in recent years.”

About the AIA Consensus Construction Forecast Panel
The AIA Consensus Construction Forecast Panel is conducted twice a year with the leading nonresidential construction forecasters in the United States including, McGraw Hill Construction, Global Insight, Moody’s economy.com, Reed Business Information, FMI, and the Portland Cement Association. The purpose of the Consensus Construction Forecast Panel is to project business condition in the construction industry over the coming 12 to 18 months. The Consensus Construction Forecast Panel has been conducted for 10 years.