Category Archives: Architects

Architecture Billings Index says Q3 GDP should be muted

Architecture Billings Index says Q3 GDP should be muted

Tom McClellan
Editor, The McClellan Market Report

Chart In Focus

The preliminary report of 3rd quarter GDP for the U.S. is due out on Friday, Oct. 26, and so far the consensus expectation is for a rise of 1.9%.  But my analysis of the data from the American Institute of Architects shows that the Q3 number could be even lower than that.

What the AIA does is to survey its member firms to see what they have to say about both actual billings from current customers and inquiries about potential new projects.  The two pieces of data are reported each month by the AIA, and I have found that they give good information about what the GDP numbers are likely to do.

This week’s chart compares a 6-month simple moving average of the “inquiries” data (as opposed to the actual billings which the AIA also tracks).  It makes a pretty good model for what overall GDP will do.  The implication is that Q3 should see a drop in growth rate versus Q2, but still positive.

The ABI data and GDP data are concurrent in real time (i.e. no leading indication), but in reporting time there is a lag due to the delay in getting out the GDP data.  So by watching what the monthly reports of the ABI data have been saying, we can get a really good idea of what the GDP numbers will be.  We have to keep in mind, though, that what the statisticians report for the preliminary GDP number may differ quite a bit from the later final numbers, and indeed they may differ from real life.  But for anyone who finds it useful to watch the reports on GDP, this ABI data can be a useful way to model that data.

Interestingly, we are also just hearing bullish reports out of some of the big nationwide homebuilding companies.  But we should all filter that bullishness through an examination of what the ABI data have to tell us about home sales.

This next chart looks at the raw monthly ABI Inquiries data versus home sales as reported by the Census Department.

ABI Inquiries vs New Home Sales

The Inquiries data saw a spike peak in February 2012, but has remained pretty tepid since then.  So the Architecture Billings Index data is not yet saying that a big spike up in new home sales is looming anytime soon.  It is worth noticing in this chart that the most recent readings on new home sales are still not even back up to the incentive-fueled levels seen in 2009 and early 2010.  So to paraphrase what Mark Twain once said about his own death, rumors of a huge housing recovery may have been greatly exaggerated.

For more information or would like to subscribe to the Architecture Billings Index dataset, please contact James Chu, Director of Market Research at the American Institute of Architects, or (202) 626-8045.


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Architect Shortage Ahead?

Architect Shortage Ahead?

By Building Experts Team

Architect 300x200 Architect Shortage Ahead?According to a rash of recent articles that might be the case. When the housing market burst in 2008 many architects found themselves out of a job as firms, both large and small, closed their doors or laid off a majority of their workforce. In addition, recent architecture graduate students found the prospective of even a low paying internship daunting, with many exiting the industry within months of graduating.

For those architects who decided to stick it out and weather the economic storm, the last four years have been an uphill battle. Projects have been sparse and far between and many older architects, who younger architects considered their mentors and teachers, decided to “retire early” to avoid the effects of a failing economy. Many industry insiders believe the combination has left a large hole in the growth of the architecture profession, both by the numbers and in terms of skills and experience. Unfortunately, the negative effects may be felt by the industry as early as 2014.

According to a recent survey of 1,007 U.S. designers, conducted by McGraw-Hill Construction, “found that nearly one-quarter of respondents anticipated a shortage of architects.” Furthermore, of the firms surveyed, “ both large (more than 50 employees) and small (less than 10) anticipated some kind of shortage of designers, but nearly half of respondents from larger firms expect it to be severe.”

And the anticipated shortage won’t be a problem for just designers, but also for the laborers and builders. As the housing market begins to revive itself in many regions across the country, builders are starting to talk about the looming labor shortage, which for many is already here. In a recent Housing Zone article, the author, a building developer, talks about the shortages he is hearing about in many cities in Texas, as well as Nashville and Charlotte. Similar to the design industry, the few workers that have remained don’t possess the experience, knowledge and skills their predecessors did, which makes for a very uncertain and shaky future.

As design firms and builders begin to rebuild their firms, win larger projects, and grow their workforce, it will be essential for them to market themselves as the workplace of choice. Although no one can predict what the next few years will hold, what we do know is that the industry landscape is changing, drastically. Being flexible and thinking strategically are essential concepts for architecture firms and builders to embrace now in order to attract top talent and prosper in the years ahead.

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Architecture Billings Index as a Leading Indicator



By Tom McClellan, McClellan Financial Publications

There are already several signs that the economy may be slowing itself into another recession, but a relatively new index is gaining a lot of attention.  The Architecture Billings Index (ABI) reflects surveys of about 300 architectural firms in the U.S.  It is a diffusion index, measuring the percentages of firms reporting a significant increase or decrease in activity.  There are two components, inquiries and billings, and the data are seasonally adjusted to reflect the fact that certain times of the year are less busy than others.

The American Institute of Architects maintains the index data, and you can read more about its computation and use at

It is not surprising to see that both the Inquiries and Billings Indices correlate well with lumber prices, given that both lumber and architectural work are big inputs into construction activity.  I have noted in past Chart In Focus articles (linked below) how lumber prices are a great leading indicator for several important aspects of the economy.

It is important to point out that these data are not in the public domain.  I got them by subscribing, with the condition that I not share the raw data, but it is okay for me to chart them and share them in this way.  I was also asked to add this statement: “For more information, or if you would like to subscribe to the Architecture Billings Index dataset, please contact James Chu, Director of Market Research at the American Institute of Architects, or (202) 626-8045.”

Given the ABI data’s good correlation to the economically sensitive lumber prices, I wanted to take a look at how these data relate more directly to GDP.  So I created the chart below which examines the ABI Inquiries Index versus the annual growth rate in real GDP.  I found it interesting that the Inquiries version correlated a little bit better than the actual Billings data for this purpose.

Even with the seasonal adjustments already included in the data, the raw index values still show a good bit of noise.  So I added a 6-month simple moving average (SMA) to help calm down the data.  What we see when considering both the raw values and the moving average is that there is a slight leading indication given for what the GDP numbers will do.  The ABI data correctly foreshadowed the big downturn in GDP that we saw in 2008, and also gave an early warning about the rebound in GDP that was to commence from the low in the 2nd quarter of 2009.

It is nice to have that slight leading indication, for anyone concerned about what GDP numbers will do, but here is where the real value is.  The ABI data are published each month, and thus they come out well in advance of the quarterly GDP numbers compiled by the Commerce Department.  So without having to wait to see what the GDP numbers did in hindsight, you can look at the ABI data to get a pretty good idea of what the GDP data are going to say.

Both the Inquiries and Billing indices topped in December 2010, and have been falling throughout 2011 in spite of the Fed’s efforts to inflate the money supply via QE2.  The Billings index is back below 50, showing overall shrinkage in billings for the firms surveyed.  With POMOs set to end this month, the stock market and the economy are going to have to try to survive without the Fed’s steroids.  The ABI data suggest that this summer is not going to go well in the post-QE2 environment.

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Great Designs in Wood (12)

Great Designs in Wood (12)

Posted by Chuck Ray at 5:13 PM

This fascinating structure really exhibits an aspect of wood not usually featured; that is, the architectural interest of the wood components as a system. Usually, wood homes and buildings feature the natural beauty of the wood components in prominent places, while allowing other physical elements of the design to “accessorize” the building, in the process delegating the structural design a less prominent visual role. This home allows you to appreciate the beauty of the wood while you marvel at the structural flexibility and integrity of wood design potential.

From we get an introduction to the home:

“The Guscott Kemp Residence has been designed by Scott M. Kemp Architect, it represents a new approach to sustainable home construction, and is located in Ladner, British Columbia, Canada.

The concept idea was to create a house as a simple shelter based on sustainable features, and to be designed as small as possible in order to allow for maximum flexibility, including adaptability of use with aging residents and subsequent reduced mobility. Also, we have to mention that the house has achieved a LEED PLATINUM rating from the Canadian Green Building Council. The house provides protection and creates a great connection between the indoor and the outdoor space, maximizing the exposure of views to the north with the desire for maximum sunshine.”

From the website HomeTrendare these additional comments:

“The house is zero carbon, all heating, including hot water is through a heat pump using a closed circuit system which has a geothermal heat-exchange plate hanging in the river below the dock. The house includes a fireplace and has no connection with the gas. Minimal air leakage was obtained by using SIP panels and careful detailing. The form of construction is designed in accordance with solar orientation, with 90% of south glass shade at midday on June 21 and exposed on Dec. 21.”

Sometimes these cutting-edge architectural showpieces aren’t really too livable, but this home really does look like a xylophile’s dream. The nice kitchen is small, but functional, and integrates modern conveniences without ostentatious displays of technology. My wife likes more granite and chrome, and she would have to have a cooking island, but if she’d let me build the rest of this home, I’d let her go a little wild with the bling.

The living spaces are airy, yet cozy, and utilize the natural light pattern variability throughout the day to maximize that presence of sunlight so important to folks who reside above the 45th parallel. And exterior views appear to continually draw the resident’s thoughts to the natural beauty of the riverside setting.

The construction detail exhibits beauty and power that goes with good, simple, wood engineering. And all this was achieved at a construction cost of $230/sq. ft.


“The house is constructed with two building systems: SIP panels (structural insulated panels) and exposed timber framing. Sip panels make up the southern portion of the house (garage and workshop including the side walls) and the roof. The remaining portion of the house is made up of an exposed timber framing. The framing is not, however constructed from large heavy timber sections but conventional dimensioned timbers (2×6, 2×8 and 2×10) intertwined together to create a heavy timber expression. The lattice joints form a truss to provide lateral bracing.”

And the home even has a great story from the wood sourcing standpoint…

“No trees were cut to build the house. All the timber was milled from salvaged logs harvested from an elk reserve on Vancouver Island. A significant number of trees were blown down during the large winds storm that hit the west coast several years ago. The fallen trees presented a significant fire hazard as well as obstructing the natural migratory routes of the elk.”

A lot of thought went into the execution of this dream home. In a perfect world, all homes would reflect a sensitivity of our space on the planet as well as this one does. And no building material helps us make that connection better than wood. Unless we build in a hole in the ground.

I’ll take the wood home.

More pictures of the house can be seen here and here.

Go Wood!

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The AIA – 2011 Awards Recipients

The American Institute of Architects – Awards Recipients, Awards.

2011 AIA Awards Recipients

The American Institute of Architects has a long tradition of recognizing individuals and organizations for their outstanding achievements in support of the profession of architecture and the AIA. Learn more about AIA National awards programs, submission information, and deadlines.

2011 Gold Medal Recipient

2011 Architecture Firm Award Recipient

2011 Edward C. Kemper Award Recipient

2011 Whitney M. Young Jr. Award Recipient

2011 Topaz Medallion for Excellence in Architectural Education Recipient

2011 Institute Honor Awards for Architecture

2011 Institute Honor Awards for Interior Architecture

2011 Institute Honor Awards for Regional and Urban Design

2011 Twenty-five Year Award Recipient

2011 FAIA Announcement

2011 Honorary FAIA Announcement

2011 Honorary AIA Announcement

2011 Institute Honors for Collaborative and Professional Achievement Award

2011 Associates Award

2011 Young Architects Award

2011 Thomas Jefferson Awards for Public Architecture

2011 AIA Housing Awards

2011 AIA/ALA Library Building Awards

2011 AIA/HUD Secretary’s Awards

The AIA National Honors and Awards team has implemented an online submission process for most award programs. Submissions have kept a similar format to what has been available in the past but are no longer submitted in a hard copy format.

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