The ABI and the commercial building industry

Posted by kbanks on Feb 4, 2011 in ABI | Comments Off

There are three letters we’ve been frequently hearing in our communities: ABI. In case you didn’t know, the Architecture Billing Index is the leading indicator on nonresidential construction activity by approximately 9-12 months.

The indexes are developed from a monthly Work-on-the-Boards survey panel where 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.

So why is the ABI important to consider? To start, Architect magazine notes in the fall of 2010 the ABI reached its highest mark since 2007 and jumped two more points in December. Crossing the 50 point milestone indicates a positive movement in both billings and design service activities. And, according to AIA Chief Economist Kermit Baker, the first quarter of 2011 will give us a much better sense of the strength of this upturn.

From our point of view, the commercial building market is still competitive for contractors, but definitely showing signs of growth. Hirings have increased, and while a full comeback isn’t expected to happen quickly, the future of the market will be stable.

If you’re out in the field, are you seeing the improvements indicated by the ABI? What changes have you seen in the industry in the past several months?