AIA predicts strong commercial construction market in 2006

The October index rating of 57.5 represents somewhat slower growth than the 60.5 score in September but exceeds the 57.1 monthly average for 2005. Architecture firms that specialize in commercial/industrial projects reported the strongest billings increase, with institutional firms operating at a stable rate and residential firms experiencing a slowdown in billings activity, according to an AIA news release.

Nonresidential construction activity is expected to be a strong economic sector in much of 2006, based on the approximately six-month lag time between billings for architectural services and construction activity.

With the construction industry accounting for 8 percent of U.S. gross domestic product, the index should indicate a positive future for industries involved in the construction process, including skilled labor, building materials manufacturers and suppliers, engineering, interior design and landscaping.

Among the highlights in the October index:

• Business conditions for U.S. architecture firms in the Northeast and Midwest have strengthened considerably in recent months.

• The 5.75 rating is the third highest index reading of the year for inquiries about new design projects, forecasting sustained momentum in the nonresidential construction industry.

• Thirty-one percent of firms report rising energy costs have caused an increase in demand for energy-efficient products

• Of the participating firms, 22 percent report interest in sustainable architecture practices

The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group.