For the first time since the summer of 2012, the Architecture Billings Index (ABI) posted consecutive months of a decline in demand for design services, according to the American Institute of Architects (AIA).
The September ABI score was 48.4, down from 49.7 in the previous month. This score reflects a decrease in design services; any score above 50 indicates an increase in billings. The new projects inquiry index was 59.4, down from 61.8 the previous month.
As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lead time between architecture billings and construction spending.
“This recent backslide should act as a warning signal,” says Kermit Baker, AIA chief economist. “But this drop-off in demand could be continued hesitancy in the marketplace to move forward on projects until the presidential election is decided. The fact that new work coming into architecture continues to slowly increase suggests that billings will resume their growth in the coming months.”
Key September ABI highlights
Regional averages: South, 53.4; Midwest, 50.1; West, 49.5; Northeast, 44.0
Sector index breakdown: commercial / industrial, 50.4; mixed practice, 49.8; institutional, 49.0; multi-family residential, 48.8
Project inquiries index: 59.4
Design contracts index: 51.4
The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts, and inquiries are monthly numbers.