Led by an active multifamily housing market and sustained by solid levels of demand for new commercial and retail properties, the Architecture Billings Index reached its highest score in nearly a year in May.
The American Institute of Architects (AIA) reported the May ABI score was 53.1, up sharply from the mark of 50.6 in the previous month. Any score above 50 indicates an increase in billings.
“Business conditions at design firms have hovered around the breakeven rate for the better part of this year,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Demand levels are solid across the board for all project types at the moment. Of particular note, the recent surge in design activity for institutional projects could be a harbinger of a new round of growth in the broader construction industry in the months ahead.”
Commercial construction spending fell 3.7% to $72.0 billion in April, but remains 6.8% above April of 2015. Educational construction spending was down 2.4% to $88.4 billion, still 5.4% greater than April a year ago.
If design services are, indeed, in healthy demand then spending should pick up accordingly in the roughly one year between design services and actual construction breaks ground.