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By Carolyn Nutter 21 Feb, 2024
WASHINGTON – February 21, 2024 – Architecture firm billings remained soft entering into 2024, with an AIA/Deltek Architecture Billings Index (ABI) score of 46.2 in January. Any score below 50.0 indicates decreasing business conditions. “This now marks the lengthiest period of declining billings since 2010, although it is reassuring that the pace of this decline is less rapid and the broader economy showed improvement in January,” said Kermit Baker, PhD, AIA Chief Economist. "Firms are seeing growth with inquiries into new projects and value of newly signed design contracts is holding steady, showing potential signs of interest from clients in new projects.” Business conditions remained weak at firms in all regions of the country except the Midwest, where modest growth was seen in three of the last four months. Firms with a multifamily residential specialization continue to report the softest business conditions of all specializations. The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients. Key ABI highlights for January include: • Regional averages: Northeast (43.6); Midwest (50.9); South (45.2); West (46.6) • Sector index breakdown: commercial/industrial (47.0); institutional (48.5); mixed practice (firms that do not have at least half of their billings in any one other category) (42.9); multifamily residential (44.6) • Project inquiries index: 53.8 • Design contracts index: 49.7 The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Every January the AIA research department updates the seasonal factors used to calculate the ABI, resulting in a revision of recent ABI values. Visit AIA’s website for detailed information about this, and past billing index reports.
By Carolyn Nutter 25 Jan, 2024
WASHINGTON – January 24, 2024 – The AIA/Deltek Architecture Billings Index (ABI) remained below 50 for December, indicating soft business conditions to close out 2023. The score of 45.4 remained essentially flat from November. Any score below 50.0 indicates decreasing business conditions but there are encouraging signs of the pipeline. “Billings at firms declined for eight months of the year, and the last four months saw this overall weakness accelerate,” said Kermit Baker, PhD, AIA Chief Economist. " Fortunately, project backlogs at firms eased only slightly through the year despite the overall reported softness in billings.” Firm billings declined at firms in all regions of the country except the Midwest in December, where billings were essentially flat. Business conditions were also weak for most of the year at firms of all specializations, with firms with a multifamily residential specialization experiencing a particularly challenging year. In addition, most firms report that over the past six months at least some of their projects have been significantly delayed, put on hold, or even cancelled. On average, almost 30% of projects on a dollar basis have fallen into one of these categories. The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients. Key ABI highlights for December include: • Regional averages: Northeast (45.9); Midwest (50.3); South (43.4); West (45.3) • Sector index breakdown: commercial/industrial (46.4); institutional (46.5); mixed practice (firms that do not have at least half of their billings in any one other category) (42.3); multifamily residential (45.8) • Project inquiries index: 53.1 • Design contracts index: 50.0 The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Visit AIA’s website for detailed information about this, and past billing index reports.
By Carolyn Nutter 20 Dec, 2023
The AIA/Deltek Architecture Billings Index (ABI) remained below 50 for the fourth consecutive month. The score of 45.3 increased by one point from October, indicating slightly fewer firms reporting a decline in billings. Any score below 50.0 indicates decreasing business conditions but there are encouraging signs of the pipeline. “This marks the seventh month in 2023 with a decline in billings. Over the past three months this pace of decline has accelerated, with firms in all specializations and in all regions of the country reporting weakening business conditions,” said Kermit Baker, PhD, AIA Chief Economist. "However, with signs that credit conditions are beginning to ease, firms are reporting an uptick in inquiries for future projects.” Key ABI highlights for November include: Regional averages: Northeast (44.4); Midwest (49.0); South (46.7); West (39.5) Sector index breakdown: commercial/industrial (45.7); institutional (46.6); mixed practice (firms that do not have at least half of their billings in any one other category) (42.7); multifamily residential (42.1) Project inquiries index: 56.9 Design contracts index: 48.1 The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the billings from the previous month. The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Visit AIA’s website for detailed information about this, and past billing index reports.
By Carolyn Nutter 15 Nov, 2023
WASHINGTON – November 15, 2023 – The AIA/Deltek Architecture Billings Index (ABI) reports that business conditions at architecture firms continued to soften in October. For the third consecutive month, the ABI score was under 50, indicating that a significant share of firms are seeing a decline in billings. “This report indicates not only a decrease in billings at firms, but also a reduction in the number of clients exploring and committing to new projects, which could potentially impact future billings. The soft conditions were evident across the entire country as well as across all major nonresidential building sectors,” said Kermit Baker, PhD, AIA Chief Economist. The score of 44.3 for October dipped slightly below the score of 44.8 in September. Billings were universally soft across the entire country in October, with firms located in the West and Northeast continuing to report the softest conditions overall for the second month in a row. Key ABI highlights for October include: • Regional averages: Northeast (42.1); South (48.5); Midwest (48.9); West (40.0) • Sector index breakdown: commercial/industrial (43.7); institutional (49.1); mixed practice (firms that do not have at least half of their billings in any one other category) (44.0); multifamily residential (40.1) • Project inquiries index: 48.8 • Design contracts index: 46.5 The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the billings from the previous month. The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Visit AIA’s website for detailed information about this, and past billing index reports.
By Carolyn Nutter 23 Oct, 2023
WASHINGTON – October 18, 2023 – Business conditions at architecture firms declined again in September, the AIA/Deltek Architecture Billings Index (ABI) reports. The score of 44.8 for September is the lowest score reported since December 2020 during the height of the pandemic. Any score below 50.0 indicates decreasing business conditions and this score indicates a significant increase in firms reporting declining billings. “The September ABI score reflects a marked downturn in business conditions at architecture firms, with the sharpest decline observed since the peak of the pandemic," said Kermit Baker, PhD, AIA Chief Economist. "While more firms are reporting a decrease in billings, the report also shows the hesitance among clients to commit to new projects with a slump in newly signed design contracts. As a result, backlogs at architecture firms fell to 6.5 months on average in the third quarter, their lowest level since the fourth quarter of 2021.” It's clear that all regions of the country are feeling this impact, with firms in the West continuing to face particularly challenging conditions. Only one sector, firms with an institutional specialization, remained flat while all other sectors reported declining billings. Firms with a multifamily residential specialization saw more decline, a continuation of month over month declines since August 2022. The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the billings from the previous month. Key ABI highlights for September include: • Regional averages: Northeast (46.4); South (46.2); Midwest (49.3); West (44.3) • Sector index breakdown: commercial/industrial (45.0); institutional (50.1); mixed practice (firms that do not have at least half of their billings in any one other category) (46.2); multifamily residential (43.5) • Project inquiries index: 53.7 • Design contracts index: 46.2 The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Visit AIA’s website for detailed information about this, and past billing index reports.
By Carolyn Nutter 20 Sep, 2023
WASHINGTON – September 20, 2023 – The AIA/Deltek Architecture Billings Index (ABI) eased modestly in August, with a score of 48.1, marking the eleventh consecutive month of essentially flat billings at architecture firms. Any score below 50.0 indicates decreasing business conditions. This follows a period of robust growth in 2021 and 2022. While inquiries into new projects remained relatively strong in August, the value of newly signed design contracts declined for the first time since April, indicating that fewer clients signed contracts for new projects than in the prior three months. “Business conditions at architecture firms continue to be sluggish,” said Kermit Baker, PhD, AIA Chief Economist. “New project work coming into architecture firms as well ongoing project activity remain stalled in a relatively narrow range and exhibit very little month-to-month variation. Through this pause has taken pressure off tight staffing conditions across the profession, there is considerable uncertainty over the direction of future activity.” Business conditions also remained soft at firms with a multifamily residential specialization and declined modestly at firms with an institutional specialization. However, firms with a commercial/industrial specialization reported billings growth for the third month in a row in August. The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients. Key ABI highlights for August include: • Regional averages: Northeast (50.6); South (49.9); Midwest (48.1); West (45.8) • Sector index breakdown: commercial/industrial (51.5); institutional (49.4); mixed practice (firms that do not have at least half of their billings in any one other category) (46.9); multifamily residential (44.1) • Project inquiries index: 54.8 • Design contracts index: 47.9 The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Visit AIA’s website for detailed information about this, and past billing index reports.
By Carolyn Nutter 29 Aug, 2023
WASHINGTON – August 23, 2023 – The American Institute of Architects (AIA)/Deltek Architecture Billings Index (ABI) results for July signals mostly stable business conditions. The ABI score was 50.0, indicating that billings at architecture firms remained flat for the month. “This is the third straight month that billings at architecture firms have stabilized,” said AIA Chief Economist Kermit Baker, PhD. “New project work has been even stronger over this period. This suggests that design work may finally begin to increase over the coming months, although somewhat modestly.” Firms with a commercial/industrial specialization reported their strongest billings growth in more than a year, while firms with a multifamily residential specialization continued to report declining billings. While this marks the ninth consecutive month of growth for firms located in the Midwest region, firms in other regions reported modest declines in billings. The ABI is a leading economic indicator derived from a monthly survey of AIA member-owned firms which measures demand for design services throughout U.S., providing insight into future construction activity across various sectors including commercial/industrial/institutional buildings and multifamily residential projects. Key ABI highlights for July include: • Regional averages: Midwest (51.6); West (49.6); Northeast (49.3); South (48.9) • Sector index breakdown: commercial/industrial (52.7); institutional (51.2); mixed practice (firms that do not have at least half of their billings in any one other category) (46.3); multifamily residential (45.4) • Project inquiries index: 54.5 • Design contracts index: 50.0 The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Visit AIA’s website for detailed information about this, and past billing index reports.
By Carolyn Nutter 19 Jul, 2023
WASHINGTON – July 19, 2023 – Architecture firms reported flat billings in June, according to the latest Architecture Billings Index (ABI) from the American Institute of Architects (AIA) and Deltek. The ABI score of 50.1 for the month indicates that billings at architecture firms remained steady as design activity continues to slowly recover from roiled economic conditions. This also marks the first time since last fall that there have been two consecutive months of scores above 50, although growth in June was weaker than May (any score above 50 indicates an increase in firm billings). “It is encouraging to see two consecutive months of stability in billings after a couple quarters of weakness due to high inflation, rising interest rates, and increased construction costs,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “We are still facing some headwinds in the broader economy, but this respite suggests that market conditions may be finding firmer ground.” Firms located in the Midwest continue to report the strongest billings for the eighth consecutive month, while firms in nearly all regions of the country also reported improving business conditions in June. Firms also reported that inquiries into new projects fell slightly from 57.2 to 56.7 the previous month. Further, the value of new design contracts edged up to 52.7 in June from 52.3 in May. Firm backlogs have decreased from their record-high levels in 2022 but remain robust at an average of 6.8 months. The AIA/Deltek ABI is a leading economic indicator derived from a monthly survey sent to AIA member-owned firms which measures demand for design services by architecture firms throughout U.S., providing insight into current and future construction activity across various sectors including commercial/industrial/institutional buildings and residential projects such as single-family housing and multifamily units. Key ABI highlights for June include: • Regional averages: Midwest (52.4); Northeast (50.6); South (50.5); West (48.6) • Sector index breakdown: institutional (55.4); mixed practice (firms that do not have at least half of their billings in any one other category) (48.8); commercial/industrial (47.8); multi-family residential (47.4) • Project inquiries index: 56.7 • Design contracts index: 52.7 The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Visit AIA’s website for detailed information about this, and past billing index reports.
By Carolyn Nutter 21 Jun, 2023
WASHINGTON – June 21, 2023 – Architecture firms experienced a rebound in billings in May after a downturn in April, according to the latest Architecture Billings Index (ABI) from the American Institute of Architects (AIA) and Deltek. The index score for May was the highest it has been since September 2022. Inquiries into new projects and design contracts also increased this month, reaching their highest levels since February. The billings score for April increased from 48.5 in April to 51.0 in May (any score above 50 indicates an increase in firm billings). Firms also reported that inquiries into new projects accelerated to 57.2 from 53.9 the previous month. Further, the value of new design contracts also moved up to 52.3 in May from 49.8 in April. “The modest improvement in overall demand for architectural services that we saw last month is encouraging news", said AIA Chief Economist Kermit Baker Hon. AIA, PhD., “However, there continues to be variation in the performance of firms by regional location and building specialization. This suggests that overall business conditions for the profession likely will continue to be variable." Despite growth in the overall ABI this month, business conditions remain variable in different regions of the country. Billings improved at firms located in the South for the second consecutive month in May, while they were essentially flat at firms located in the Midwest, following six months of growth. However, billings continued to decline at firms located in both the West and Northeast, where scores have been below 50 since last fall. By firm specialization, business conditions softened further at firms with a multifamily residential specialization in May, falling to the lowest level in two years. Billings also declined for the ninth consecutive month at firms with a commercial/industrial specialization. On the other hand, business conditions improved for the second month in a row at firms with an institutional specialization, as they reported their strongest growth since last year. Key ABI highlights for May include: • Regional averages: South (52.3); Midwest (49.6); Northeast (48.7); West (47.7) • Sector index breakdown: institutional (53.4); mixed practice (firms that do not have at least half of their billings in any one other category) (52.7); commercial/industrial (47.5); multi-family residential (43.0) • Project inquiries index: 57.2 • Design contracts index: 52.3 The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score. Visit AIA’s website for detailed information about this, and past billing index reports.
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