DEFINITION of 'Architecture Billings Index - ABI'

A leading economic indicator of demand for commercial and industrial building activity. The ABI is based on responses to the monthly Work-on-the-Boards survey that asks the principals and partners of architecture firms (that are American Institute of Architects members), whether their billing activity for the previous month grew, declined or remained flat. The change in billing activity tells us about the level of demand for design services from architecture firms; in other words, it tells us about the level of interest in constructing new buildings. When the index is above 50, demand is increasing; when it is below 50, demand is falling.

BREAKING DOWN 'Architecture Billings Index - ABI'

Commercial and industrial building activity includes the construction of hotels, office buildings, multi-family residential, schools, hospitals and other institutional buildings. It is important because it affects numerous types of businesses, from architecture firms to reprographics companies to contractors. A positive Architecture Billings Index can be a sign of strength or recovery in the broader economy, while a negative ABI can signal weakness or a coming downturn.

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