Architecture Billings Index Indicates More Construction In Pipeline

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Robison Wells
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The Architecture Billings Index (ABI) released its report for May 2021, showing that the demand for architectural services is at a record high. The ABI measures demand through tracking signed contracts. It hit 58.5 in May, up from 57.9 in April. (Anything above 50 indicates an increase over the previous month. Anything lower than 50 marks a decrease.)

This is the fourth month in a row of gains, and according to the American Institute of Architects, 58.5 is one of the highest rates in the 25 years that the ABI has existed.

“Despite ballooning costs for construction materials and delivery delays, design activity is roaring back as more and more places reopen,” said AIA chief economist Kermit Baker in the AIA’s press release. “However, concern over rising inflation and ongoing supply chain disruptions, as well as emerging labor shortages, could dampen the emerging construction recovery.”

The “Project Inquiries” index, which measures the interest in future projects, rose to 69.2 in May. (April was 70.8, but due to the definition of the index, the May number shows an increase over the April number.) The “Design Contracts” index was at 61.7 in April and rose again to 63.2 in May.

By region, the Midwest lead, followed closely by the South. The West rose, but by less. The Northeast came in last place (but still showed a rise at 54.2). By industry, commercial and industrial work were leading the pack, with multifamily residential behind and mixed-practice firms at the bottom.

However, Baker said that much of this growth would likely be even higher if it were not being held back by construction costs and labor and material shortages.

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