Architecture News

Architecture Billings Continue to Sink Entering Summer

Following a two-month bright spot of near non-decline, business conditions at architecture firms continue to weaken with the latest AIA/Deltek Architecture Billings Index (ABI) reporting a score of 44.5 for the month of May. (Any score below 50.0 indicates softening business activity at firms.) This represents a nearly 4-point drop from last month’s score of 48.3 and a more than 5-point drop from the growth-scrapping score of 49.8 reported in the April ABI, which was the highest since early 2023. The score of 44.5 is the lowest the ABI has sunk since February with its score of 43.8 for the previous month.

Per the AIA, the inquiries index also fell below 50 for the first time in four months with a score of 49.4 while the value of newly signed design contracts weakened to its lowest level since January with a score of 45.0

“The uncertainty created by the Iran conflict, and substantially higher energy costs, weighed on architect billings in May,” explained AIA Chief Economist Richard Branch in a statement. “Higher interest rates, rapidly rising material costs, and continued labor shortages all contributed to softer demand.”

Image courtesy AIA

Economic uncertainty—a hot topic at this year’s AIA Conference on Architecture & Design in San Diego—is playing a key role in dwindling conditions at firms across the country. Regional averages all remained below 50, although there was some upward movement when compared to the averages reported last month: South (49.6); Northeast (46.2); West (45.4); Midwest (45.3).

Image courtesy AIA

The sector breakdown is also stalled this month in sub-50 territory: multifamily residential (49.2); institutional (46.9); commercial/industrial (45.5); mixed practice (firms that do not have at least half of their billings in any one other category) (44.1). Last month’s ABI saw two sectors, multifamily and institutional, experience growth with scores of 51.5 and 51.1, respectively.