AIA Billings Index Declined to 44.8 in September
Washington, DC, October 18, 2023-The AIA/Deltek Architecture Billings Index (ABI) score of 44.8 for September is the lowest score reported since December 2020 during the height of the pandemic, according to the American Institute of Architects. Any score below 50.0 indicates decreasing business conditions, and this score indicates a significant increase in firms reporting declining billings.
August’s score was 48.1.
“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.
Regional averages were as follows: Northeast (46.4); South (46.2); Midwest (49.3); West (44.3).
The sector index breakdown was 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).
The project inquiries index was 53.7, and the design contracts index was 46.2.
Related Topics:The American Institute of Architects