Our Blog
WASHINGTON – September 18, 2024 – August marked the nineteenth consecutive month of declining billings for architecture firms, according to the latest data from the AIA/Deltek Architecture Billings Index (ABI). The pace of decline during August accelerated, posting an ABI score of 45.7, a decrease from 48.2 in July. “Unfortunately, even the impending interest rate cuts didn’t move the needle on project inquiries or new design contracts at architecture firms,” said Kermit Baker, PhD, AIA Chief Economist. “Hopefully, once the trajectory of further cuts gets clarified, delayed projects will restart, and new projects will gather momentum.” Key ABI highlights for August include: • Regional averages: Northeast (48.2); South (46.8); Midwest (46.6); West (45.7) • Sector index breakdown: mixed practice (firms that do not have at least half of their billings in any one other category) (48.6); institutional (47.4); commercial/industrial (46.6); multifamily residential (44.0) • Project inquiries index: 52.4 • Design contracts index: 47.3 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.
WASHINGTON – August 21, 2024 – July marked the eighteenth consecutive month of declining billings for architecture firms, according to the latest data from the AIA/Deltek Architecture Billings Index (ABI). While the ABI score of 48.2 indicates that fewer firms reported declines in billings compared to June, over half of the responding firms continue to navigate challenging business conditions. "Architecture firms continue to face a billings slowdown,” said Kermit Baker, PhD, AIA Chief Economist. “However, the emerging prospects of lower interest rates coupled with a modest uptick in project inquiries suggest that some dormant projects may be revived in the coming months.” Newly signed design contracts saw a decrease for the fourth consecutive month, although the rate of decline has slowed. Notably, inquiries into new projects have increased, although at a continued slow pace. Regionally, firms located in the Northeast experienced stable billings for the second consecutive month, representing the first two-month period with scores at or above 50 since mid-2022. Billings declined in other regions, yet the pace of those declines has decreased across the board 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 June include: • Regional averages: Northeast (50.0); Midwest (47.6); South (46.3); West (46.0) • Sector index breakdown: commercial/industrial (45.0); institutional (49.1); mixed practice (firms that do not have at least half of their billings in any one other category) (47.7); multifamily residential (45.4) • Project inquiries index: 52.4 • Design contracts index: 46.5 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.
WASHINGTON – July 24, 2024 – Business conditions remained soft at architecture firms in June with the AIA/Deltek Architecture Billings Index (ABI) reporting a score of 46.4. Any score below 50 indicates a billings decline, although this month’s score indicates that somewhat fewer firms reported a decline in billings in June than in May. "Architecture firms continue to face a period of headwinds in the construction sector, driven by elevated interest rates, high construction costs, and generally weak property values,” said Kermit Baker, PhD, AIA Chief Economist. “This is the seventeenth consecutive month of a billings decrease and yet, despite the softness firms remain generally optimistic that conditions will start to improve once interest rates begin to ease.” Indicators of future work remained generally soft as well: • Only slightly more than half of the responding firms reported an increase in inquiries into new work. • Firms reported a third consecutive month of decline in value of newly signed design contracts. • While many firms still have a healthy backlog of projects in the pipeline, 6.4 months on average, this is the lowest that backlogs have been in more than three years. 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 June include: • Regional averages: Northeast (52.2); Midwest (40.9); South (43.9); West (43.1) • Sector index breakdown: commercial/industrial (42.0); institutional (44.3); mixed practice (firms that do not have at least half of their billings in any one other category) (46.9); multifamily residential (45.1) • Project inquiries index: 51.6 • Design contracts index: 45.6 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.
WASHINGTON – June 26, 2024 – The AIA/Deltek Architecture Billings Index (ABI) score declined to 42.4 in May, as more firms reported a decrease in billings than the month prior. "The decline in the May ABI score continues a year and a half of weakness in design billings at U.S. architecture firms. However, firms only reported modest declines over the first half of this period,” said Kermit Baker, PhD, AIA Chief Economist. “Over the past nine months, volatility has increased, and scores have softened more significantly, with the May score the weakest reported since the end of the pandemic recession." The pipeline of new work coming into firms is showing increasing softness. While inquiries into new projects continue to increase, they did so at a slower pace than in recent months. Additionally, architecture firm billings remained soft across all regions and sectors in May. Billings declined at firms in all regions of the country for the fourth consecutive month, as conditions remained weakest at firms located in the Midwest. 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 May include: • Regional averages: Northeast (47.7); Midwest (41.7); South (46.0); West (46.3) • Sector index breakdown: commercial/industrial (48.2); institutional (43.2); mixed practice (firms that do not have at least half of their billings in any one other category) (42.8); multifamily residential (47.3) • Project inquiries index: 52.1 • Design contracts index: 45.6 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.
WASHINGTON – May 22, 2024 – Architecture firm billings remained soft in April, with an AIA/Deltek Architecture Billings Index (ABI) score of 48.3 for the month. The score rose from 43.6 in March but still indicates that billings continue to decline at most architecture firms. While the value of newly signed design contracts dipped slightly in April, there remains interest from clients as inquiries into new projects continue to increase. “These findings indicate that while there is still caution among clients, there are also positive signs with increasing inquiries into new projects,” said Kermit Baker, PhD, AIA Chief Economist. “Continued high interest rates make it difficult for some projects to move forward, but there is ongoing interest in pursuing these projects once conditions improve. In the meantime, design activity is expected to remain sluggish.” Architecture firm billings continued to decline at firms in all regions of the country, with firms located in the Midwest and South reporting the sharpest declines. Business conditions also remain soft at firms of all specializations, with the weakest conditions continuing at firms with a multifamily residential specialization. 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 April include: • Regional averages: Northeast (45.9); Midwest (44.2); South (44.7); West (47.8) • Sector index breakdown: commercial/industrial (47.4); institutional (46.1); mixed practice (firms that do not have at least half of their billings in any one other category) (43.9); multifamily residential (45.6) • Project inquiries index: 54.8 • Design contracts index: 49.2 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.
WASHINGTON – April 24, 2024 – The AIA/Deltek Architecture Billings Index (ABI) reported a score of 43.6 for the month of March, indicating business conditions continue to soften for architecture firms. This marks the 14th consecutive month of declining billings at firms as inflation, supply chain issues and other economic challenges continue to affect business. “Elevated construction costs coupled with prolonged high interest rates continue to discourage new project activity,” said Kermit Baker, PhD, AIA Chief Economist. However, institutional design work seems to have stabilized, providing a solid base for the profession as it awaits a more positive economic environment for construction. All regions of the country reported a decline in billings, with business conditions looking the softest this month at firms in the Midwest and the South. While there was a decline in billings for firms of all specializations, billings declined at a faster pace for firms with a commercial/industrial specialization. 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 March include: • Regional averages: Northeast (46.0); Midwest (45.2); South (45.3); West (47.6) • Sector index breakdown: commercial/industrial (42.9); institutional (49.9); mixed practice (firms that do not have at least half of their billings in any one other category) (48.3); multifamily residential (44.2) • Project inquiries index: 54.9 • 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.
AIA/Deltek ABI Reports Moderation in the Slowdown in Business Conditions at Architecture Firms in February
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.
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.