After over a year and half of steady growth, the end of 2022 saw the start to a slow decline in billings for architects. The trend continues. The monthly Architecture Billings Index (ABI) put out each month by The American Institute of Architects (AIA) reported a score of 48.0 for the month of February. (Any score below 50 indicates a decrease in billings from the previous month.) In January the ABI score was 49.3.
In its report the AIA said this latest decline reflects “an extension of a recent downturn in design activity.” While the national average for billings has dropped since last month, the AIA’s surveying found that inquiries into new projects have increased, as have the value of new design contracts, circumstances that indicate conditions “expected to improve in the coming months.”
As prior months have shown, higher interest rates and inflation continue to affect the architecture and construction industry, causing delays in project development.
“The combination of an unsettled economy and high interest rates is causing investors and property owners to take a closer look at their plans for construction projects,” said Kermit Baker, chief economist at the AIA, explained in a press release. “While this is producing delays for some projects under design, architecture firms are reporting that prospects for future project work remain generally positive.”
In addition to reporting a nationwide score, each month the AIA’s report is broken down regionally. In February, the South was the only region that reported the largest decline in billings of all four regions, with a score of 47.3 compared to 46.9 last month. The three other regions, West, Midwest, and North, all reported drops in billings from the previous month of lesser amounts.
As for individual sectors, as in previous months, firms specializing in a mix of projects continued to report growth, with a robust score of 57.0 in February compared to 56.0 in January. The industry sectors reporting the greatest declines in billings are institutional and commercial/industrial projects. In comparison to last month, multifamily residential projects have seen a slight uptick in billings, reporting 46.2 in February compared to 45.9 in January.
March saw the seemingly abrupt collapse of several banks, causing an economic scramble that could continue to have effects on the built environment. Whether or not this recent financial event will affect the architecture billings remains to be seen in next month’s report.
