Demand for architecture design services increased again in March, according to the American Institute of Architects (AIA). The Architecture Billings Index score for March was 51.9, up from February’s score of 50.3. The ABI score has been steadily increasing each month in 2016. Hopefully, we can avoid the sharp decline in design activity we saw last April and activity will continue to climb as we head into the warmer months of the year. Last year the strongest months for design activity were June and July. The ABI acts as an early predictor for future nonresidential construction spending and activity with the average lead time between billings and construction spending typically being nine to twelve months.
The new projects inquiry index was solid in March with a score of 58.1 despite being a bit lower from February’s 59.5. The design contracts index had a slight increase, going from 51.7 in February to 51.8 in March.
All four regions improved in March with their three-month averages. The Northeast (51.0), South (52.4) and West (50.4) regions all had increases in design activity. All scores above 50 indicate an increase in billings. The Midwest was hovering just below the 50 mark with a score of 49.8, which was up from 49.3 in February.
The three-month sector averages for March were positive with the exception of Institutional. Multi-family Residential led the way with a score of 55.7 followed by Commercial/Industrial at 51.8 which was still an increase despite being lower than the February score of 52.3. Mixed Practice jumped back up into positive territory going from 47.7 in February to 50.0 in March. Institutional edged down again in March to a score of 48.0.
For the first two months of 2016, we discussed the fact that the ABI scores this year were nearly identical to the 2015 scores for January and February. That trend continued in March with the score in 2016 at 51.9 and the March 2015 score was 51.7. So, for first quarter 2015 we had scores of 49.9 in January, 50.4 in February and 51.7 in March. In 2016 the scores were 49.6 in January, 50.3 in February and 51.9 in March. What we don’t want to see this year is a decrease in April like we did in 2015.