Following a modest two-month recovery in the level of demand for design services, the Architecture Billings Index (ABI) again turned negative last month.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending.
The American Institute of Architects (AIA) reported the March ABI score was 48.8, down sharply from a mark of 50.7 in February. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.9, up from the reading of 56.8 the previous month.
With this release, the AIA has added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contacts in March was 48.2.
“This protracted softening in demand for design services is a bit of a surprise given the overall strength of the market the last year and a half,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Hopefully, some of this can be attributed to severe weather conditions over this past winter. We will have a better sense if there is a reason for more serious concern over the next couple of months.”
Key March ABI highlights:
- Regional averages: South (52.8),West (50.7), Northeast (46.8), Midwest (46.6)
- Sector index breakdown: multi-family residential (52.1), commercial / industrial (49.6), institutional (49.0), mixed practice (47.6)
- Project inquiries index: 57.9
- Design contracts index: 48.2
The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.
About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms.
Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI. These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline.
The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the recently released White Paper, Designing the Construction Future: Reviewing the Performance and Extending the Applications of the AIA’s Architecture Billings Index on the AIA web site.
About The American Institute of Architects
Founded in 1857, members of the American Institute of Architects consistently work to create more valuable, healthy, secure, and sustainable buildings, neighborhoods, and communities. Through nearly 300 state and local chapters, the AIA advocates for public policies that promote economic vitality and public well being.
Members adhere to a code of ethics and conduct to ensure the highest professional standards. The AIA provides members with tools and resources to assist them in their careers and business as well as engaging civic and government leaders, and the public to find solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org
Related Stories
Codes and Standards | Feb 8, 2023
GSA releases draft of federal low embodied carbon material standards
The General Services Administration recently released a document that outlines standards for low embodied carbon materials and products to be used on federal construction projects.
University Buildings | Feb 7, 2023
Kansas City University's Center for Medical Education Innovation can adapt to changes in medical curriculum
The Center for Medical Education Innovation (CMEI) at Kansas City University was designed to adapt to changes in medical curriculum and pedagogy. The project program supported the mission of training leaders in osteopathic medicine with a state-of-the-art facility that leverages active-learning and simulation-based training.
Multifamily Housing | Feb 7, 2023
Multifamily housing rents flat in January, developers remain optimistic
Multifamily rents were flat in January 2023 as a strong jobs report indicated that fears of a significant economic recession may be overblown. U.S. asking rents averaged $1,701, unchanged from the prior month, according to the latest Yardi Matrix National Multifamily Report.
Giants 400 | Feb 6, 2023
2022 Reconstruction Sector Giants: Top architecture, engineering, and construction firms in the U.S. building reconstruction and renovation sector
Gensler, Stantec, IPS, Alfa Tech, STO Building Group, and Turner Construction top BD+C's rankings of the nation's largest reconstruction sector architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report.
Giants 400 | Feb 6, 2023
2022 Transit Facility Giants: Top architecture, engineering, and construction firms in the U.S. transit facility sector
Walsh Group, Skanska USA, HDR, Perkins and Will, and AECOM top BD+C's rankings of the nation's largest transit facility sector architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report.
Giants 400 | Feb 6, 2023
2022 Telecommunications Facility Sector Giants: Top architecture, engineering, and construction firms in the U.S. telecommunications facility sector
AECOM, Alfa Tech, Kraus-Anderson, and Stantec head BD+C's rankings of the nation's largest telecommunications facility sector architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report.
Giants 400 | Feb 6, 2023
2022 Religious Sector Giants: Top architecture, engineering, and construction firms in the U.S. religious facility construction sector
HOK, Parkhill, KPFF, Shawmut Design and Construction, and Wiss, Janney, Elstner head BD+C's rankings of the nation's largest religious facility sector architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report.
Giants 400 | Feb 6, 2023
2022 Justice Facility Sector Giants: Top architecture, engineering, and construction firms in the U.S. justice facility/public safety sector
Stantec, DLR Group, Turner Construction, STO Building Group, AECOM, and Dewberry top BD+C's rankings of the nation's largest architecture, engineering, and construction firms for justice facility/public safety buildings work, including correctional facilities, fire stations, jails, police stations, and prisons, as reported in the 2022 Giants 400 Report.
Giants 400 | Feb 6, 2023
2022 Parking Structure Giants: Top architecture, engineering, and construction firms in the U.S. parking structure sector
Choate Parking Consultants, Walker Consultants, Kimley-Horn, PCL, and Balfour Beatty top BD+C's rankings of the nation's largest parking structure sector architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report.
Market Data | Feb 6, 2023
Nonresidential construction spending dips 0.5% in December 2022
National nonresidential construction spending decreased by 0.5% in December, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $943.5 billion for the month.