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| U.S. Architecture Billings Index was Positive Every Month in 2005 The American Institute of Architects (AIA) reported that billings at U.S. architecture firms were positive every month in 2005 for the first time since 2000, pointing towards 2006 being the best year for nonresidential construction in six years. With construction accounting for nine percent of GDP, increased nonresidential activity will ease the effects of a projected slowdown in the residential market. The Architecture Billings Index (ABI), a leading economic indicator of nonresidential construction activity, had a rating of 50.4 in December 2005 (any score above 50 indicates a positive score), compared to 58.4 for November 2005 and 47.8 for December 2004. CIBC World Markets senior industrial multi-industry analyst, Robert P. McCarthy, CFA, said, “The AIA's forecast for accelerating upcycle in nonresidential construction activity for ’06-’07 has positive implications in particular for electrical equipment suppliers. Recent channel checks with these suppliers indicate that backlogs tied to nonresidential construction are firming for the back half of 2006, particularly in lighting fixtures. Additionally, recent pricing actions in the lighting fixture space appear to be gaining traction, indicative of a solid, potentially accelerating demand environment.” 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 six 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. write your comments about the article :: © 2006 Construction News :: home page |