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Architectural Billing Index Dips in January
'Minor Decrease in Design Services'


The Architectural Billing Index stayed above 50 for most of 2015, but it began the new year in negative territory, dropping to 49.6 in January, the American Institute of Architects said.

Although the Architectural Billing Index was in generally positive territory in 2015, it has dropped to 49.6 in January, from 51.3 in December, to begin the new year.

The American Institute of Architects said the score reflects a "minor decrease in design services," as any reading above 50 equates to an increase in billings, while anything below 50 is just the opposite.

The AIA's new projects inquiry index was at 55.3, down from a reading of 60.5 the previous month.

As a leading economic indicator of construction activity, the ABI reflects the approximate nine-to-twelve month lead-time between architecture billings and construction spending.

Despite the January setback, the AIA said it is only a glitch because strong market conditions prevail.

"The fundamentals are mostly sound in the nonresidential design and construction market," said Kermit Baker, chief economist for the AIA.

Certain unsettling events in January may have been contributing factors to the ABI's decline.

"January was a rocky month throughout the economy, with falling oil prices, international economic concerns, and with steep declines in stock market valuations in the U.S. and elsewhere," Baker said. "Some of the fallout of this uncertainty may have affected progress on design projects."

Regional averages for the month of January: Midwest, 48.9; Northeast, 50.4; South 50.3; West, 50.8.

American Institute of Architects:

Homebuilders' Top Worry in 2016: Labor
Homebuilders overwhelmingly responded in a recent survey that a shortage of labor is a problem that concerns them the most of any issue in 2016.

Homebuilders were asked what they thought would be their most significant problem to deal with this year, and 76 percent of the respondents cited the "cost and availability of labor" as their most pressing worry.

The lack of a qualified labor force in the building trades has been something homebuilders and contractors have been grappling with for over three years, the National Association of Home Builders said.

In 2013, 53 percent of builders rated labor as a significant problem, followed by 61 percent in 2014 and 71 percent in 2015.

"An expected skilled labor shortage can constrain an improving housing market," said the NAHB, the trade group that conducted the survey.

Second on the 2016 list, at 59 percent, was the "availability of developable lots." Close behind, at 57 percent, was "federal environmental regulations and policies."

In fourth, at 56 percent, was building materials prices. "Impact, hook-up, inspection or other fees" and "concern about the employment-economic situation" tied for fifth at 55 percent.

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July 17, 2019, 8:27 pm PDT

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