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12.23.2010
AIA Billings Index Up in the Air
Optimism takes cautious hold as November Billings jog up
Billings (blue) and inquiries (red) for the past 12 months.
The Architect's Newspaper

In the second half of 2010, AIA’s Architecture Billings Index was more like a ride at Coney Island than anything currently running at the old amusement park. But at least it’s going out on a high note: the November Billings Index, released on December 22, rose more than three points reaching the highest mark since December 2007. The month’s score of 52 was up from 48.7 the previous month, that score a slide down from September when the index climbed over the 50 point mark for the first time since January 2008. (Any score above 50 indicates an increase in billings or inquiries.)

Billings by region: Northeast (orange), Midwest (blue), South (red), West (green).Billings by region: Northeast (orange), Midwest (blue), South (red), West (green).

AIA chief economist Kermit Baker was heartened, if professionally cautious: “Month-to-month changes can be overblown in terms of understanding what’s going on. I try to see the larger trends. We started the year at 42.5, a steep downturn, and now we are seeing a trend showing continuous swings upward and above 50. We could see another month below 50 but since three of four regional sectors are now modestly above the mark, it’s easier to believe the uptrend is staying with us.”

In November, Baker noted that the South for the first time eked up to 50.5 “joining the club”, while the Northeast led the pack with billings at 51, and the Midwest followed at 50.9. The West, though still below the waterline at 48.7, is heading in the right direction, and was up from 44.3 in October.

Billings by sector: Residential (green), commercial/industrial (pink), institutional (gold), mixed-use (purple).Billings by sector: Residential (green), commercial/industrial (pink), institutional (gold), mixed-use (purple).

The breakdown by sector held some surprises. Residential averages rose steeply to 51.1, up two points, but commercial/industrial dipped down to 49.8, ending a lucky streak above 50 for over six months. “I didn’t see that one coming,” said Baker. While anecdotal evidence suggests that university projects are picking up, the institutional index held pretty steady, a negligible shift to 49.3 from 50.8.

Architects are accustomed to a certain amount of volatility in the field, riding the professional roller coaster seems to come with the territory. But there is little indication, so far, that the steep dive of the past two years is going to be offset by a joyride back to over-the-top flush times. Improvements continue at a snail’s pace. According to Baker, that’s good news if it means a new paradigm that is less cyclical overall; but it is not good news if modest upturns are accompanied by full-force downturns. “The upturn needs to be steep enough to get new jobs going again,” Baker said.

Julie V. Iovine