Major Downturn in Commercial Construction

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Architecture Billings Index Points to Major Downturn in Commercial Construction

Architecture Billings Index Points to Major Downturn in Commercial Construction

Falls to lowest level since 2001 with nearly 9-point drop off

WASHINGTON, March 19 /PRNewswire-USNewswire/ -- Reflecting the

deteriorating conditions in the housing market and overall economy, the

Architecture Billings Index (ABI) tumbled almost nine points in February.

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 February ABI rating fell to 41.8, its lowest level since October 2001,

and down dramatically from the 50.7 mark in January (any score above 50

indicates an increase in billings). The inquiries for new projects score

was 54.3.

"This is a clear indication that there could be tougher times ahead for

design firms and a noticeable slowdown in commercial construction projects

coming online in the foreseeable future," said AIA Chief Economist Kermit

Baker, Ph.D., Hon. AIA. "Interestingly enough, we have also had some survey

members reporting that their business is in great shape from a billings and

demand standpoint. The one bright spot continues to be the institutional

sector with continued positive conditions for construction projects such as

schools, hospitals and government buildings."

Key February ABI highlights:

-- Regional averages: Northeast (51.5), South (48.3), West (46.3),

Midwest (42.6)

-- Sector index breakdown: institutional (54.9), multi-family

residential (46.6), mixed practice (43.9), commercial / industrial (40.6)

-- Billings inquiries index: 54.3

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.

Work-on-the-Boards

CONTACT: Scott Frank of American Institute of Architects, 202-626-7457,

media@aia.org

SOURCE American Institute of Architects