Architecture firm billings remained weak in August, although the pace of decline eased slightly, according to the latest AIA/Deltek Architecture Billings Index (ABI).
The ABI registered 47.2, indicating that a majority of firms continued to report declining billings. Inquiries into new projects posted only modest growth, while the value of newly signed design contracts continued to fall.
Expectations for the months ahead have also weakened. Just 25% of firm leaders expect billings to increase in the fourth quarter, down from 30% heading into the third quarter. Meanwhile, 29% expect billings to decline, up from 21% at the end of the first quarter.
Conditions varied considerably by region. Firms in the Midwest reported modest billings growth for the first time in nearly a year, while billings were essentially flat in the West. The Northeast experienced a significant slowdown, with billings falling to their lowest level since 2020.
By sector, commercial/industrial firms reported a slight increase in billings during August. Conditions remained soft for firms specializing in institutional and multifamily residential work, despite periods of modest growth earlier this year.
Overall, the August results point to continued weakness in architectural demand, with declining design contracts and softer expectations suggesting that challenging conditions may persist into the fourth quarter.
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The AIA/Deltek Architecture Billings Index® (ABI) is a diffusion index derived from the monthly Work-on-the-Boards survey, conducted by the AIA Economics & Market Research Group. The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months. The survey panel asks participants whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month. An index score of 50 represents no change in firm billings from the previous month, a score above 50 indicates an increase in firm billings from the previous month, and a score below 50 indicates a decline in firm billings from the previous month.
