Architecture Billings Declined to 42.4 in May

June 26, 2024, from Floor Focus FloorDaily News

Washington, DC, June 26, 2024 – The American Institute of Architects (AIA) Architecture Billings Index (ABI) score declined to 42.4 in May, as more firms reported a decrease in billings than the month prior.

April’s score was 48.3.

“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