Billings at U.S. architecture firms were positive for the 12th consecutive month in January, indicating positive growth for the construction industry this year, the American Institute of Architects reported.

The institute’s Architecture Billings Index, a leading economic indicator of nonresidential construction activity, had a January rating of 55.5 (any score above 50 indicates an increase), up from the seasonally adjusted score of 53.7 in December 2005.

By region, the South led the nation with an ABI rating of 58.7, followed by the Northeast (53.8), the Midwest (53.5), and the West (50.1).

Based on the approximately six- to nine-month lag time between architecture billings and construction spending, business conditions appear favorable for the nonresidential construction market in 2006 and possibly into 2007.

“As the residential market shows signs of softening, the nonresidential market is in excellent position to pick up the slack in construction activity,” said AIA Chief Economist Kermit Baker, Ph.D. “Nonresidential construction not only represents billions of dollars in economic activity, but also generates a lot of related spending in furnishings and interior decor.”

According to Department of Commerce figures on construction put in place, spending on nonresidential construction in 2005 totaled $487 billion, accounting for 4 percent of GDP. The impact on the overall economy is significant, considering that the AIA Consensus Construction Forecast Panel has anticipated close to 5 percent real growth in nonresidential building construction this year, with growth evenly balanced between the commercial/industrial and institutional sectors.

The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on construction put in place, the findings amount to a leading economic indicator that provides an approximately six month glimpse into the future of nonresidential construction activity.


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