The Architecture Billing Index fell..again

[Jason T. Radice]

I don’t need to tell most of you, but I thought you’d like to be kept up on the state of business in the profession…well, technically, an allied profession. Since ASLA only does quarterly indicies, and AIA does monthly, here are the AIA’s monthy numbers for June.

 

The ABI dropped a full point to 46.3. Anything below a 50 is a contraction in the market. The market has been dropping more and more each month since early spring. Institutional appears to be the weakest market as municipal and federal government contracts are drying up out of lack of funding. The west coast is the best coast with a 51.7 average…stay tuned!

 

 

http://www.architectmagazine.com/architecture/revenue-at-us-architecture-firms-down-for-third-consecutive-month.aspx?cid=ANW110722002&id=300205

[Trace One]

“It is the first quarter of positive growth. With this index, a score of 50 is neutral, no growth, no loss. So, there is .2 points growth. Great. Losses had been slowing over the past months, but then it picked up again. Hopefully, this is the start of higher billings, but given the track record of this index, it is likely just a blip and losses will continue next quarter.”

 

Jason, here is your response when I posted a link to this index in December of 2010. At that time, you seemed cynical and dismissive, to say the least, about the value of this index. Have we changed our minds?

[Jason T. Radice]

Not at all, there has been long period of significant and increasing declines in the ABI (at least 5 months now), that is a trend. I was not dismissive of the ABI, I was dismissive of the growth. What I was referring to with “track record” is that due to its frequency, just like any snapshot index (including the stock market and the weekly first-time unemployment filings), do not show the entire story. One month of growth or one day of stock gains do not a trend make. The ABI has frequently showed blips of positives as well, and we get an overreaction that things are going to be rosy. Six solid months of growth (and not this 2-5% stuff) and we’ll take another look at it. Sorry if it read the worng way.

More importantly, I was correct in my assumption regarding the losses returning. Its like I’m Nostradamus or something…come on lotto numbers!. The ASLA index is too infrequent, as it shows only quarters, so it is difficult to show trends which can develop in the months between, we don’t get the play-by-play.

   

 

Here is the chart through May:

 

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