Best Year in Nonresidential Construction Since 2000 Expected to Help Offset Slowing Residential Market

Architecture Billings Index Was Positive Every Month in 2005

Jan 19, 2006, 00:00 ET from American Institute of Architects

    WASHINGTON, Jan. 19 /PRNewswire/ -- The American Institute of Architects
 (AIA) reported that billings at U.S. architecture firms were positive every
 month in 2005 for the first time since 2000, pointing towards 2006 being the
 best year for nonresidential construction in six years.  With construction
 accounting for nine percent of GDP, increased nonresidential activity will
 ease the effects of a projected slowdown in the residential market. The
 Architecture Billings Index (ABI), a leading economic indicator of
 nonresidential construction activity, had a rating of 50.4 in December 2005
 (any score above 50 indicates a positive score), compared to 58.4 for November
 2005 and 47.8 for December 2004.
     "Considering the sluggish consumer spending coupled with the softening
 residential sector, nonresidential construction should be viewed as a key
 driver for the overall economy in 2006," said AIA Chief Economist Kermit
 Baker, PhD, Hon. AIA.  "The nonresidential upturn should continue into 2007
 and can be attributed to pent up demand for new projects that weren't able to
 be undertaken in recent years."
     All major nonresidential sectors to benefit from improved business
     * The significant upturn in demand for office space and hotel facilities
       will drive the commercial market
     * Educational and healthcare projects are expected to see substantial
       growth this year, fueling the institutional sector
     * An up tick in manufacturing activity will drive the need for more
       industrial facilities
     * Post-hurricane rebuilding is projected to accelerate in mid-2006 and
       continue for several years
     Robert W. Baird & Co. senior industrial analyst, Michael A. Schneider,
 CFA, said, "We believe the AIA's forecast for accelerating growth in
 nonresidential construction activity in 2006 bodes well for construction-
 related companies. Indeed, the bullish outlook is consistent with indications
 of strengthening demand from the construction services companies in our
 coverage universe. Furthermore, our contacts concur that the rebuilding
 process in the aftermath of recent hurricanes should enhance the nascent
 construction cycle."
     About The American Institute of Architects
     For almost 150 years, members of The American Institute of Architects have
 worked with each other and their communities to create more valuable, healthy,
 secure, and sustainable buildings and cityscapes. AIA members have access to
 the right people, knowledge, and tools to create better design, and through
 such resources and access, they help clients and communities make their
 visions real.

SOURCE American Institute of Architects