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Architecture Billings Index Contracts for Second Straight Month in December

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Following consistently increasing demand for design services throughout most of 2013, the Architecture Billings Index (ABI) has posted its first consecutive months of contraction since May and June 2012.

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As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lead time between architecture billings and construction spending.

The American Institute of Architects reported the December ABI score was 48.5, down from a mark of 49.8 in November. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.2, up from the reading of 57.8 the previous month.

“What we thought last month was an isolated dip now bears closer examination to see what is causing the slowdown in demand for architectural services,” said AIA Chief Economist Kermit Baker. “It is possible that some of this can be attributed to the anxiety in the marketplace caused by the shutdown of the federal government, but it will be important  to see how business conditions fare through the first quarter of this year when we no longer have end-of-the-year issues to deal with.”

Key December ABI highlights:

• Regional averages: West (53.2), South (51.2), Midwest (47.0), Northeast (42.8)

• Sector index breakdown: multi-family residential (53.8), mixed practice 51.0), commercial / industrial (47.1), institutional (44.8)

• Project inquiries index: 59.2

The regional and sector categories are calculated as a 3-month moving average, whereas the index and inquiries are monthly numbers.

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