US Sept architectural index reverses three-year no-growth trend

20 October 2010 19:21  [Source: ICIS news]

HOUSTON (ICIS)--A measure of future US construction activity moved into positive territory in September for the first time in nearly three years, the American Institute of Architects (AIA) said on Wednesday.

The AIA’s Architecture Billings Index (ABI) was at 50.4 for the month, up from 48.2 in August. It was the fourth consecutive monthly gain, but the first score above 50 - an indicator of increased billings for architectural design services - since January 2008.

The AIA’s new-project inquiries index rose to 62.3 for the month, a 14% increase from 54.6 in August.

The ABI, derived from a monthly survey of AIA-member firms, reflects a lag of 9-12 months between architecture billings and construction spending, according to the AIA.

The survey reflected improvement in most regions, ranging from a gain of 3.6% in the midwest to an 11% increase in the northeast, where good weather have bolstered construction markets. The index declined by 3% in the west.

The ABI increased marginally among most construction sectors, but was led by an 11% gain in the commercial and industrial segment for September.

AIA chief economist Kermit Baker was encouraged by the news, but offered a warning.

“We will need to see consistent improvement over the next few months in order to feel comfortable about the state of the design and construction industry,” he said. “While there has been increasing demand for design services, it is happening at a slow rate, and there continue to be other obstacles that are preventing a more accelerated recovery.”

Among those obstacles, he said, are still-restrictive credit terms and stiff competition for design projects.

Non-residential construction, which includes shopping centres, offices and other projects covered by the ABI, generates $160-230 (€117-168) worth of consumption of chemicals and derivatives for every $1,000 spent on the project, according to the American Chemistry Council (ACC).

($1 = €0.73)

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By: Larry Terry
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