New ABI Shows Continued Softening of Business Conditions at Architecture Firms
As evidenced by the latest AIA/Deltek Architecture Billings Index, business conditions at architecture firms are experiencing unfortunate, chronic déjà vu. In July, the unrelenting nationwide hold on declining billing activity continued as it has for months on end with a score of 46.2, down from 46.8 the previous month. (Any score below 50.0 indicates diminishing business conditions at firms.) Billings have been in negative territory for 31 of the last 34 months.
Image courtesy the American Institute of Architects
The AIA notes that inquiries into new work did in fact grow “slowly but steadily” in July with a positive score of 53.4. This follows a three-month pause earlier in the year. But design contract values slumped yet again with a score of 47.9 as firms grapple with converting inquiries into actual projects—a difficulty that has persisted for over two and a half years alongside plummeting billing activity.
Image courtesy the American Institute of Architects
“Business conditions remain challenging for architecture firms nationwide, with billings declining across all regions in July,” said AIA chief economist Kermit Baker in a statement. “Client inquiries into new projects continue to build. Still, while commercial and institutional sectors show some signs of stability, the multifamily residential sector still is facing significant headwinds.”
Image courtesy the American Institute of Architects
Regionally, the South which reported a slightly non-soft score of 50.6 in June’s ABI, fell back down to a score 47.5. The Northeast, West, and Midwest all failed to jump into positive territory with scores of 47.8, 46.4, and 45.1, respectively. Among sectors, firms specializing in commercial/industrial projects almost entered in the positive realm with a score 49.9, up from 47.4 in June. Institutional projects fell from a previous score of 49.2 to 47.9. As mentioned by Baker, multifamily residential fared the weakest with a score of 43.7, which represents a slight dip from the previous score of 43.8.
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