One of the better data points to predict U.S. construction spending up to about 1 year in the future is the Architecture Billings Index (ABI). Since consumer spending relies heavily on construction spending and associated service side requirements, the ABI is very important reflection of the upcoming overall economy. So lo and behold, the latest data just released shows that the ABI is at an all-time historic low. And what about any guidance offered by their Chief Economist: “Aside from historically low project demand, all regions are showing very poor business conditions. This is not likely to reverse itself anytime soon.” It appears da boyz forgot to massage one economic news release.

Darn it - VHF

--

Architecture Billings Index Drops to its Lowest Level Ever

Inquiries for new projects also drop to historic low

Washington, D.C., April 23, 2008 — Emblematic of the various struggling sectors in the overall economy, the Architecture Billings Index (ABI) dropped two points in March and fell to its lowest level since the survey’s inception in 1995. As a leading economic indicator of construction activity, the ABI shows an approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the March ABI rating dropped to 39.7, following its steep 9-point decline in February (any score above 50 indicates an increase in billings). The inquiries for new projects score was 48.0, also the lowest mark for the survey.

“We’ve seen an 11-point fall-off in the first quarter of the year and the prognosis for commercial construction later this year is not favorable at this point,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Aside from historically low project demand, all regions are showing very poor business conditions. This is not likely to reverse itself anytime soon.”