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    aia billings index - let's look behind the methodology...

    Gregory Walker
    Oct 3, '11 4:32 PM EST

    quick break from the start up train - the aia's architectural billings index (abi) is one of the more important benchmarks and 'canaries' that measures the overall health of the profession. if you want some more background reading on how the readings are measured, you can read this description on the aia's website.

    as a participant in the surveys that form the index results, though, i admit some skepticism about how the tea leaves are being read. 

    so, with the current month's survey in my box, i thought it would be useful to share the actual questions and end by posing a few for all of you:

    first, the actual survey -

    1.* How would you estimate your firm's gross billings/billable work in September compared with the previous month? (If your firm doesn't bill monthly, please estimate the work that will be billed for this period)

    -Substantially increased (5% or more)
    -Remained about the same
    -Substantially decreased (5% or more)


    2. * How did inquiries for new work (e.g., bids, RFPs, solicitations, invitations for interviews, etc.) in September compare with the previous month?
    -Substantially increased (5% or more)
    -Remained about the same
    -Substantially decreased (5% or more)


    3. How did the value of new design/design-build contracts (or formal authorizations to proceed, letters of agreement) in September compare with the previous month? (Remember that our intention with this question is to capture any agreement, either formal or informal, that gives you assurance of a client's commitment to a new project.)

    -Substantially increased (5% or more)
    -Remained about the same
    -Substantially decreased (5% or more)


    4. As a reminder, we are now asking about backlogs on a quarterly basis. As of the end of September, what is your estimate of the backlog of projects at your firm; that is, without any new work, how much in the way of active projects do you currently have in-house to maintain your staff at current billings levels?

    -Less than one month
    -At least one month, but less than three months
    -At least three months, but less than six months
    -At least six months, but less than one year
    -More than one year


    5. Many architects – as well as unlicensed architecture staff – have been downsized during the recession of the past several years. Of the architects that you know in your area who have lost their positions, please provide your best estimate of what they are doing at present.

    Of the architects who have been downsized over the past several years, approximately what percent are: (Please provide your best estimate of percentage; percentages should total 100%. Please only enter the number and DO NOT enter the "%" sign in your response.)
    a. Retired, or are not looking for work for other reasons
    b. Currently working in architecture on a part-time or contract basis
    c. Currently working in other jobs temporarily, waiting for architecture positions to open up
    d. Currently working in other jobs, and are unlikely to return to architecture when architecture positions open up
    e. Not currently working, waiting for architecture positions to open up
    f. Not currently working, but are unlikely to return to architecture when positions open up
    g. Other (please specify in Question 6 below) 


    6. Please specify other actions taken by architects in your area who have lost their positions, if selected "Other" in Q5 above:


    7. Comments on business conditions in your area:



    now, a few questions of my own (and i'm not a statistician): doesn't the range of the first 3 questions seem really narrow? as a small firm, our billings can vary wildly depending on the phase we're in. for example, if we have a major project in for an owner review, our actual billings on it may be low that month. similarly, we may have delayed billing a client; had a ton of inquiries one month that are still simmering into the next but may have very few calls otherwise. overall, business may be pretty steady when looked at over a quarter, but swinging if you look at it month to month. even with the understanding that, with many, many firms, an averaging will occur, i'm wondering why the focus is on such a narrow band. 

    (it should be pointed out that these 3 questions are the same every month, as is #7.4-6 tend to change each month.)


    so, how would you propose to re-write the questions to help make this a better indicator for all of us?


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Central to the blog is a long running interest in how we construct practices that enable and promote the kind of work we are all most interested in. From how firms are run, structured, and constructed, the main focus will be on exploring, expanding and demystifying how firms operate. I’ll be interviewing different practices – from startups to nationally recognized firms, bringing to print at least one a month. Our focus will be connecting Archinect readers with the business of practice.

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