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AIA: Design service billings experience 'substantial' decrease in July report | Dump Trucks Charlotte NC

Columbus Ohio Dump Truck Company Brief:

  • The American Institute of Architects (AIA) this week, in its latest Architecture Billings Index (ABI) report, found that there was a "substantial" decrease in architecture firm billings from July to August and a corresponding drop in the index's score from 50.1 to 47.2.
The AIA said this shift signifies the biggest weakness in design activity in the last several years.
  • The results were mixed for the AIA's two other indices. The Project Inquiries Index was in positive territory with an August score of 54.5, but the Design Contracts Index landed at 47.9. As part of a sector analysis, the AIA gave scores to institutional (50.6); multifamily residential (50.5); commercial-industrial (46.9); and mixed practice (46.3) billings as well.
  • The West was the only region with a positive billings score (51.2), while the South (48.2), Northeast (49.1) and Midwest (46.4) regions all showed decreases in billing activity.  
  • Dump Trucks Columbus OH Insight:

    Kermit Baker, the AIA's chief economist, said this most recent report reflects six months of billing and project activity declines, which could mean that the design industry is finally "facing some headwinds" since its expansion started in 2012.

    The ABI, according to the institute, is an economic indicator of nonresidential construction activity during the next nine months to a year. The data is based on the AIA's Work-on-the-Boards survey of architecture firms and is used to monitor shifts in both the design and construction segments. The ABI is a tool that the AIA says helps companies to determine:

    • Hiring and other resource needs
    • Guidance to stockholders
    • Opportunities for growth
    • Budgets
    • Bidding activity

    Another indicator of future nonresidential construction activity is the Associated Builders and Contractors' monthly Construction Backlog Indicator (CBI), a measure of how much columbus oh dump truck company columbus oh dump truck company have in the pipeline. The association released its latest CBI report this week, and, as of July, average backlog stands at 8.5 months, down 0.3 months and 2.9% from June.

    While still healthy, the slight decline in the average amount of columbus oh dump truck company columbus oh dump truck company have ahead follows along with the perception that the economy is beginning to soften, according to Anirban Basu, ABC's chief economist. However, the majority of columbus oh dump truck company that the ABC surveyed are still projecting higher sales and are planning to hire more staff in the short term.

    Of the three segments the ABC tracks, commercial and institutional projects took the biggest hit to their backlog, decreasing 0.6 months. The pipeline for infrastructure projects stayed about the same, while the heavy industrial segment's backlog increased an impressive 35.6% or 2.3 months.

    Construction companies with less than $30 million of annual revenue, which Basu said are particularly vulnerable to market shifts, saw their backlogs decrease by 0.8 months, or 9.8%, while those with revenues greater than $30 million a year saw increases. The pipeline for those columbus oh dump truck company bringing in between $50 million and $100 million jumped by 20.8% to 11.5 months, and companies that make more than $100 million enjoyed the biggest backlogs.

    But how does this play into the latest news from the AIA?

    Alec Carrick, the chief economist for ConstructConnect, told Construction Dive that one explanation for the disparity is that there has been a shift in the last year to megaprojects — those worth $1 billion or more. That's why, he said, of the major construction categories he tracks, engineering and industrial have remained in the positive, with a 6% and 68% increase in starts, respectively. In fact, for the period January through August of this year, when compared to the same timeframe last year, the number of starts for these megaprojects increased from 13, with a total value of $35 billion, to 24 with a total value of $93 billion.  

    The big projects run the gamut from LNG terminals to airports to ethane cracker plants, but they don't require the same kind of design services that make up some of the AIA's data, Carrick said. "The market has really changed over to more megaprojects at this stage of the cycle, and the smaller, midsize projects that have been trailing off — that's what's reflected in the billing index numbers."

    That being said, he added that the latest ABI, along with other economic indicators, are caution signs that the U.S. economy could be in for a slowdown. These include rising debt, a climbing federal deficit, the continuing trade war with China and other countries, lack of population growth and other economic metrics in the U.S. and around the world. The pace of job growth, he said, while still strong, has slowed a bit. 

    Barring something initiative on the scale of last year's corporate tax cuts, Carrick said, "For the economy as a whole, I have trouble seeing how the economy keeps going without a slowdown in the next year to year and a half."​