Demand for design services recovered in December to end 2014 on a healthy and stable note—especially for the nonresidential construction industry, according to the Architecture Billings Index (ABI) released by the AIA today. The ABI reported that December’s index score was 52.2, making it one of the ten months in 2014 that experienced growth. The December score is up from November’s mark of 50.9. Any score above 50 indicates an increase in billings whereas a mark below 50 represents contraction.
The new projects inquiry index was 58.2, only slightly below November’s 58.8. The AIA’s newest metric, which tracks new design contracts, reported a mark of 49.9, falling below a 54.9 score in November.
“Business conditions continue to be the strongest at architecture firms in the South and the Western regions,” said AIA chief economist Kermit Baker, Hon. AIA, in a press release. “Particularly encouraging is the continued solid upturn in design activity at institutional firms, since public sector facilities were the last nonresidential building project type to recover from the downturn.”
Here are the national and sector breakdowns for the December ABI report.
National Highlights
National Billings: December’s score of 52.2 is 1.3 points above November’s 50.9 and 1.5 points below October’s 35.7.
Project inquiries: The values in this category declined for the third consecutive month, but December's score (58.2) marks nearly six years of growth in this category. December’s posted score is slightly below November’s 58.8 and 4.5 points below that of October (62.7).
Design Contracts: The values in the design contracts category fell into the red for the first time March 2014. December’s score of 49.9 is five points below November’s 54.9.
Regional Highlights
Northeast: The Northeast, in its fourth consecutive month of contractions, is the only region not experiencing increasing demand for design services. The December score of 45.5 falls just below that of November's 46.1.
Midwest: The Midwest is the only region to experience an increased monthly score from November (50.5) to December (50.8) in this report.
South: This region, in its second year of consistent monthly growth, received the highest regional score in this report. December’s score of 56.8 falls slightly under November’s mark of 57.5.
West: In the region’s seventh consecutive month of growth, the index fell marginally from November’s score of 53.3 to December’s 52.9.
Sector Highlights
Multifamily Residential: This sector, which has experienced consistent monthly growth for more than three years, rose from a score of 55.4 in November to 55.7 in December.
Commercial/Industrial: In the positive every month in 2014, this sector dropped slightly from 51.8 in November to 51.2 in December.
Institutional: December’s mark of 52.5 is down marginally from November’s score of 52.7, marking the seventh straight month of growth.
Mixed Practice: In its second consecutive month in the red, this sector experienced a drop from a score of 49.5 in November to 45.8 in December.
Charts: Maggie Goldstone; Source: AIA Architecture Billings Index