Architecture firm billing activity is contracting once again after two months of a slowing decline, according to a new report from the American Institute of Architects (AIA).
The pace of decline during November accelerated from October, posting an Architecture Billings Index (ABI) score of 46.3 from 47.5 (any score below 50 indicates a decline in firm billings). The pace of inquiries into new projects slowed, but remained positive with a score of 52.0, however the value of new design contracts dipped back into negative territory with a score 48.6.
“In previous design cycles, we typically haven’t seen a straight line back to growth after a downturn hits,” said AIA Chief Economist, Kermit Baker, Hon. AIA, Ph.D. “The path to recovery is shaping up to be bumpier than we hoped for. While there are pockets of optimism in design services demand, the overall construction landscape remains depressed.”
Key ABI highlights for November include:
- Regional averages: Midwest (50.1); West (48.3); South (46.7); Northeast (38.7)
- Sector index breakdown: multi-family residential (52.2); mixed practice (49.5); commercial/industrial (47.5); institutional (41.9)
- Project inquiries index: 52.0
- Design contracts index: 48.6
The regional and sector categories are calculated as a three-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.
About the ABI
The Architecture Billings Index is an economic indicator for nonresidential construction activity, with a lead time of approximately 9–12 months. Investment groups like Wells Fargo, media outlets, firms of all sizes, and business leaders rely on this leading monthly economic indicator to assess business conditions and predict and track the market.
The index is derived from AIA’s Work-on-the-Boards survey, which has gathered data on shifts in billings from architectural firm leaders for over 20 years. This data is a trusted tool used by the design and construction industry and other firms to predict and track movements in the market
Learn more about the ABI.