According to American Institute of Architects (AIA), billings at architecture firms across the country continue to increase.
The AIA's Architecture Billings Index (ABI) reported the November ABI score was 53.2, up from the mark of 52.8 in October. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.6, up slightly from the 59.4 mark of the previous month.
"These are the strongest business conditions we have seen since the end of 2007 before the construction market collapse," said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. "The real question now is if the federal budget situation gets cleared up which will likely lead to the green lighting of numerous projects currently on hold. If we do end up going off the 'fiscal cliff' then we can expect a significant setback for the entire design and construction industry."
Key November ABI highlights:
Regional averages: Northeast (56.3), Midwest (54.4), South (51.1), West (49.6).
Sector index breakdown: multi-family residential (55.9), mixed practice (53.9), commercial / industrial (52.0), institutional (50.5).
Project inquiries index: 59.6.
The Architecture Billings Index (ABI) is considered a leading economic indicator of construction activity reflects the approximate nine to twelve month lag time between architecture billings and construction spending.
According to data from CBRE, vacant office space in the U.S. increased slightly by 10 basis points (bps) during the fourth quarter of 2017 (Q4 2017) to 13 percent. For the year, vacancy inched up 10 bps, marking the first year-over-year increase in vacancy since 2010.
The National Association of Home Builders is reporting this week that their latest Multifamily Production Index dropped 10 points to 46 in the third quarter of 2017. This is the lowest reading since the second quarter of 2011.