US March architectural index dips slightly but still shows growth

20 April 2011 21:13  [Source: ICIS news]

HOUSTON (ICIS)--The American Institute of Architects’ (AIA) March index of future construction activity declined marginally from February, the organisation said on Wednesday.

The AIA’s Architecture Billings Index (ABI) was 50.5 for March - down from 50.6 the previous month - but still higher than the 50.0 index in January.

Any score above 50 indicates an increase in billings, according to the AIA.

The ABI results reflect a lag of 9-12 months between architecture billings and construction spending, according to the AIA.

A year ago, strict credit terms dampened demand for architectural design services, and credit constraints are still a reality.

“Demand is not falling back into the negative territory, but also not exhibiting the same pace of increases seen at the end of 2010,” AIA chief economist Kermit Baker said of design activity at AIA-member architectural firms, whose feedback forms the basis of the monthly billings index.

“The catalyst for a more robust recovery is likely financing,” Baker added, “with stronger growth occurring only when lending institutions begin approving credit for construction projects with much greater regularity.”

Although the ABI slipped, the March new-project inquiries index rose to 58.7, up 4% from 56.4 in February.

Regionally, March results mostly reflected an ongoing uneven recovery. In the northeast, the March index increased sharply by 11%, after slipping in February.

The index declined again in the south and midwest, but rose for a third consecutive month in the west.

Among construction sectors, results were also somewhat mixed. Institutional fell for a third consecutive month to 48.0 from 48.9 in February and from 51.3 in January.

Multi-family residential rose by about 2% in March, while mixed practice declined by 3% and the commercial/industrial sector slipped by less than 1%.

Every $1,000 spent on non-residential construction generates $160-230 (€112-161) worth of consumable chemicals and derivatives, according to the American Chemistry Council.

($1 = €0.70)

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